Guideline Hourly Rates on Costs
Published: 12/01/2024 11:25
In H v GH  EWFC 235 Simon Colton KC, sitting as a deputy High Court judge, struck out a husband’s application to extend payment of a lump sum for two years. When he then proceeded to summarily assess the costs he raised with the parties the relevance, or not, in the Family Court, of the guideline hourly rates (GHR) published as part of the Guide to the Summary Assessment of Costs.
At  Simon Colton KC cited Samsung Electronics Co Ltd v LG Display Ltd (Costs)  EWCA Civ 466 where Males LJ (with whom Snowden and Lewison LJJ agreed) held at  that ‘if a rate in excess of the guideline rate is to be charged to the paying party, a clear and compelling justification must be provided’ and at  Athena Capital Fund SICAV-FIS SCA v Secretariat of State for the Holy See  EWCA Civ 1061, where Males LJ (with whom Birss and Peter Jackson LJJ agreed) held at  that:
‘Counsel's fees are not subject to guideline rates in the same way that solicitors' fees are, but it is nevertheless important to stress that, whatever clients may be prepared to pay their own counsel, only a reasonable and proportionate fee may be recovered from the other side ’
At  he referred to the Civil Justice Council report on costs, published in May 2023, which considered (among other matters) the question of GHR and which recorded that the majority of the respondents took the view that they had a useful role as a starting point for both summary and detailed assessment, and in indicating to the market generally the rates that would be considered reasonable by the courts.
Thereafter at  he recorded that:
‘Counsel were unable to assist me with the question whether these guideline hourly rates apply in family proceedings, although I think their consensus view was that they did not, and they had never heard of the rates being applied in family proceedings.’
Simon Kolton KC agreed stating that:
‘It seems to me that, strictly speaking, the guideline rates do not apply in the Family Court: the “Guide to the Summary Assessment of Costs” is promulgated by the Master of the Rolls, and does not form part of those Civil Procedure Rules which, by FPR 28.2, apply to family proceedings, nor part of the Practice Directions supplementing those rules.’
However he went onto say that:
‘Nonetheless, it would be a very odd result if hourly rates which, in civil proceedings, could not be recovered absent a "clear and compelling justification", can readily be recovered in family proceedings. It is also undesirable that the benefits of guideline hourly rates (consistency, proportionality, and predictability) should be lost in the assessment of costs in family proceedings.’
In consequence, he conducted the summary assessment of costs on the basis that, whilst not bound by the GHR, the level of those rates provided a good indicator of what costs were proportionate for the receiving party to recover, in the absence of some clear or compelling justification why those rates should be exceeded.
The most recent Guide to the Summary Assessment of Costs was published in 2021. The Master of the Rolls delivered a speech at the Civil Justice Council’s 12th National Forum on 17 November 2023 in which he confirmed he had accepted the recommendation of the Civil Justice Council in its final costs report of 10 May 2023 and that the GHR will be uplifted for inflation from 1 January 2024 in accordance with the Services Producer Price Index (SPPI). The GHR will, in future, be uplifted annually for inflation. These new rates are as follows:
|Solicitors and legal executives with over eight years’ qualified experience
|Solicitors or legal executives with over four years’ qualified experience
|Other qualified solicitors or legal executives and fee earners of equivalent experience
|Trainee solicitors, paralegals and other fee earners
The judge’s analysis would appear to be correct: although the Guide to the Summary Assessment of Costs is used to assist in summarily assessing costs under the Civil Procedure Rules it does not form part of those Civil Procedure Rules which, by FPR 28.2, apply to family proceedings, nor part of the Practice Directions supplementing those rules. As such, the guideline rates as set out in Appendix 2 apply to civil and commercial matters but do not apply in the Family Court.
However, the same form – N260 – is filed by parties with the Family Court when it is asked to carry out summary assessment of costs and the grade of fee earner – and their hourly rate – is therefore identified on the form. So given that the procedure is the same, the bases of assessment (standard and indemnity) are the same, and the considerations as to what costs will be allowed are the same (and CPR Part 44 and PD 44 are specifically engaged in this regard), is there any good reason why hourly rates can be recovered in family proceedings where the same rates cannot be recovered in civil proceedings absent a ‘clear and compelling justification’? And why should the benefits of guideline hourly rates (consistency, proportionality, and predictability) be lost in the assessment of costs in family proceedings?