When it comes to recoverable costs, solicitors are very used to the concept of ‘guideline hourly rates’ (GHRs). These are not binding on the court, but are a tariff of rates intended to guide judges in deciding what level of fees a winning party can reasonably recover from their opponents. The rates vary according to the level of work and the law firm’s geographical location.
Solicitors’ GHRs had fallen well behind market rates until they were finally reviewed and increased in October 2021 – although many argue that it is already time to review them again; in part because the rise in remote working now calls into question the way the geographical element of the rates is calculated. The Civil Justice Council (CJC) does not plan to review this for another five years, however.
But when it comes to GHRs, there is an obvious and somewhat glaring omission: they only apply to solicitors, not to counsel. And what’s more, it’s sometimes suggested that barristers – who will fiercely attack their opponents on any other aspect of a case, including solicitors’ fees – seem strangely shy about calling out the fees of opposing counsel.
This question of whether guideline hourly rates should apply to barristers as well as solicitors was recently posed by Mrs Justice Joanna Smith, who was involved in the CJC’s recent costs review and chaired a sub-group on GHRs, as she gave her personal reflections on the issue in a speech at the Costs Law Reports Conference last month.
She said: ‘I’ve little doubt that the bar would have a great deal to say about any attempt to cap its recoverable fees, and I’ve already seen some comments in the press to that effect. As someone who has relatively recently changed sides, I’ve got considerable sympathy with that position.
‘But looked at objectively and standing back, it’s difficult to see the justification for treating counsel’s fees differently from solicitors’ fees, given that an important underlaying rationale for guideline hourly rates is the provision of certainty for parties over their liability to pay the opposing party’s costs.’
The judge went on to highlight some pertinent recent case law. She said: ‘A squint at recent cases in the Business and Property Courts dealing with costs management clearly illustrates that the level of counsel’s fees [is] very often a significant impediment to agreement between the parties on costs.
‘While of course it’s not the role of the court in a costs management hearing to fix or approve the hourly rates claimed in the budget, it is worth looking in this context at a very recent decision of Michael Green J in Ras Al Kaihmah Investment Authority v Farhad Azima [2023] EWHC 1923 (Ch); a very substantial case in which the judge nevertheless described counsel’s brief fees as “excessive”.
‘Argument over counsel’s fees also played a significant role in a decision of mine, Various SAM Borrowers v Bank of Scotland [2022] EWHC 2594; a case in which, despite very significant figures being claimed by the bank’s counsel – which were described as “stratospheric” by opposing counsel – no information had actually been provided to the court at all as to how those fees had been arrived at by counsel’s
clerks.’
Mrs Justice Joanna Smith added: ‘Whilst guideline hourly rates for counsel may be difficult to set and liable to frequent changes in market rates, they are likely in my view to assist in focusing the minds of the parties over what is reasonable and proportionate in the context of a case, and what is not.’
It’s hard to think of any real reason why GHRs could not be set for counsel’s fees in the same way as they as for solicitors. But given the amount of evidence gathering and argument that went into setting the latest rates for solicitors, it is difficult to imagine the same regime being set up for counsel any time soon – no matter how much sense it might make to do so.
October 20, 2023
Insights
