Existing guideline hourly rates to stay "for foreseeable future": Lord Dyson

The existing guideline hourly rates (GHRs) are to remain in force for the foreseeable future, the Master of the Rolls said.

Lord Dyson added that GHRs would “remain a component in the assessment of costs, along with the application by the judiciary of proportionality and costs management”.

The Master of the Rolls’ announcement came after discussions with the Law Society and the Government. He had also received a detailed written response from Chancery Lane.

Lord Dyson instigated those discussions after concluding in July 2014 that he had no evidential base to make any change to the GHRs, which have been in their current form since 2010.

A Civil Justice Council committee, chaired by Mr Justice Foskett, had proposed an overall net reduction in fee income of 2.23% for all qualified fee-earners and 5.14% for all fee-earners. The committee had, though, expressed concerns at the quality of evidence at its disposal.

In his announcement on 17 April, Lord Dyson said: "These discussions and this correspondence have not made any material change to the position I was placed in last July – there is no funding available from any source for undertaking the sort of in-depth survey which the Civil Justice Council’s costs committee and its expert advisers consider is required to produce an adequate evidence base,” the Master of the Rolls said.

“There is also considerable doubt that even if such funds were forthcoming there would be sufficient numbers of firms willing to participate and provide the level of detailed data required to enable the committee (and in turn myself) to produce accurate and reasonable GHRs.”

Lord Dyson said the exercise was not happening in a vacuum, and he was conscious of a number of trends in the legal services market and other factors that were rendering GHRs less and less relevant.

The MR said these included, but were not restricted to:

• advances in technology and business practices and models;
• the ever-increasing sub-specialisation of the law which was seeing the market increasingly dictate rates in some fields (particularly commercial law);
• the judiciary’s use of proportionality as a driving principle in assessing costs;
• the greater adoption of (and familiarity with) costs budgeting amongst the judiciary and practitioners alike.

“Not least, I hope, of such factors, is a trend towards the greater use of fixed costs in litigation,” said Lord Dyson, adding that he had long advocated their wider application, and would continue to press this point to ministers and others “in the hope that this important element of the Jackson reforms is implemented”.

However, the Master of the Rolls added “less relevance is not the same as no relevance”, and he was “conscious that there are still many uses to which GHRs are put”.

Lord Dyson said the rates remained an integral part of the process of judges making summary assessments of costs in proceedings. They also:

• formed a part, “even if only a starting reference point, in the preparation of detailed assessments;
• provided a yardstick for comparison purposes in costs budgeting;
• for some smaller practices, offered a rate to base practice charges on, and to demonstrate to clients a national benchmark.

The Master of the Rolls therefore ruled out suggesting that the existing GHRs no longer apply.