New year brings extra fees as hourly rates uplifted

Solicitors have begun the new year with an increase in guideline hourly rates. Master of the rolls Sir Geoffrey Vos announced the 3.65% increase last month and it came into effect from 1 January.

Rates for commercial and corporate Grade A fee earners in London are now £566. For other work in central London they are £413, for outer London £312 and nationally £288.

In 2022, the master of the rolls had requested that the Civil Justice Council take a new look at costs, particularly given the ongoing transformation of civil justice into a digital system. Up to that point, the rates had remained unchanged for more than 10 years. The recommendation was to update rates in line with inflation, leading to a 6.66% increase in January 2024. The latest rise is in line with the most recent service producer price inflation values using data up to the first quarter of 2024.

The Civil Justice Council has an ongoing working group to look at the issue of guidelines relating to counsel fees and a new top rate for complex commercial work, which would apply to the work itself rather than the location.

Sean Linley, senior costs draftsperson with Newcastle firm Carter Burnett, said this is a good opportunity for practitioners to review their current charges and retainer with a view to potential revisions to the hourly rate. But he added: ‘Practitioners should take care to make sure that their retainers allow an increase to be made and that the correct notification is given.’

The guideline hourly rates are intended to be a starting point: in practice firms will claim more where there are clear and compelling reasons to exceed the guidelines. As a result, more complex cases are likely to result in higher hourly charges.

Linley said that paying parties are now more likely to argue that the revised rates mean the guideline rates are more reliable when it comes to assessment and, as a consequence, there should be fewer departures from them.

‘It should be stressed that the increase in GHRs is not automatic and you will remain limited to the hourly rates agreed with the client, as per the indemnity principle,’ he added. ‘This is why it is important to review the rates currently agreed and to notify the client if it is considered reasonable to update the same.’