Guideline Hourly Rates on Costs: Addendum

Published: 15/02/2024 07:43

In KS v VS (Judgment – Summary Assessment of Costs – Civil Guide) [2024] EWHC 278 (Fam) (12 February 2024), Arbuthnot J referred to H v GH [2023] EWFC 235, [2024] Costs LR 27 and the question raised by DHCJ Simon Colton KC as to the relevance or otherwise of the guideline hourly rates. She stated as follows:

'[33] When it comes to the recovery of the husband’s costs, the husband argues that the civil ‘Guide to the Summary Assessment of Costs’ should not form part of a family court’s consideration and particularly not before this has been considered by the President of the Family Division and professional bodies.
[34] The application of the Guide was considered by DHCJ Colton KC in H v GH (supra). The hourly rate and band for the work is set out in Appendix 2: ‘Guideline figures for the summary assessment of costs explanatory notes’. The hourly rates were re-considered on 1st January 2024 and a percentage uplift has occurred. To take just one example, for a grade A solicitor the hourly rate was increased on 1st January 2024 from £512 to £546.
[35] Significantly the guide says that the general rule is that a summary assessment of the costs should be made in certain circumstances (when the case is a fast track case) and when the hearing has lasted “not more than a day”. The case I am concerned with lasted just over two days although perhaps it should have been shorter.
[36] In paragraph 51 DHCJ Colton KC said that, “strictly speaking, the guideline rates do not apply in the Family Court” but said that, “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”.
[37] I accept of course that different considerations may apply in the Family Court compared to those in the Civil Courts, but these different considerations are perhaps not as obvious in financial remedy proceedings as opposed to ones about children and their welfare.
[38] In my judgment, each part of the justice system should have a costs framework which is consistent, proportionate and predictable. This will be of great assistance to parties as they enter the system. If costs are treated in that way and parties become aware that they may not be able to recover every penny they have spent, that might have the effect of first encouraging parties not to change representatives frequently and second, in parties looking for solicitors who charge less for similar work. This may drive down the costs of litigation in financial remedy proceedings, in particular.
[39] It seems to me the guidance is helpful as it sets out what a reasonable and proportionate hourly rate is in the various types of cases that come before the court. As a really rough, rule of thumb a top hourly rate of £546 which can be recovered from a losing party, seems a proportionate amount.
[40] In this case I am not going to give guidance, but I draw support from the Guide …'

Therefore although expressly not said to be 'guidance' the direction of travel in the Family Court may be coming clearer – namely a greater reference to the guideline hourly rates in the Guide to the Summary Assessment of Costs when determining questions of proportionality (and recoverability) even if these rates do not formally apply. Even if solely a 'really rough, rule of thumb' limiting recovery to £546 per hour will mean an immediate substantial irrecoverable sum on partner and senior associate rates at many of the Central London firms (for example the husband’s two Grade A solicitors in KS v VS were claiming £750 and £605 per hour respectively). It will be interesting to see if (as Arbuthnot J posits) this approach has the effect of causing parties to look for solicitors who charge less for similar work and/or drives down the costs of litigation in financial remedy proceedings.

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