The validity of 10-year-old guideline hourly rates is coming under fresh scrutiny, with costs lawyers regularly arguing against them and even a costs master admitting they are ‘barely even a starting point’ for City firms.
The Gazette understands lawyers across the board are now citing the case of PLK & Ors to argue for higher fees than stipulated by the 2010 guideline hourly rates. This was an application on behalf of four firms claiming for Court of Protection costs where Master Whalan said rates should be subject to ‘some form of periodic, upwards review’.
Despite being a ruling concerning the Court of Protection, there have been several reports of PLK being cited for other types of work. One costs lawyer told the Gazette it had turned up in a personal injury case, adding: ‘It is par for the course that there are those who will selectively cite what might support their argument, including taking it out of context’.
Claire Green, chair of the Association of Costs Lawyers, said it was no surprise to see litigators trying to recover rates in excess of the GHR, but that costs judges will be reluctant to accept the PLK argument for non-CoP work.
‘A great deal of preparatory work went into the PLK case, with contributions made by multiple law firms to build the evidence base to support the argument,’ said Green.
A Civil Justice Council working group led by Mr Justice Stewart is looking into whether the GHR need updating, with recommendations likely this year.
The case of Shulman v Kolomoisky, published last week, reflects the current difficulties. The claimant had challenged the costs based on the second defendant’s firm, Skadden, Arps, Slate, Meagher & Flom, having an E14 postcode (it is based in the Canary Wharf business district) and so being subject to the outer London band.
Master Rowley said the claimant was ‘entirely opportunistic’ and noted that the rates take no account of the size of the firm or the nature of work undertaken. The Master described GHR as a ‘broad approximation’ and ‘really the roughest of rough guides as to what might be allowed’.