GHCR – latest recommendations released
The writer has previously reported the most recent case law addressing the considerably outdated GHCR and the steps being taken by the judiciary, whilst recognising that there was no authority for their rulings to represent binding updates to the rates, to redress the balance between the imposition of archaic rates and the ever-increasing cost of litigation. It is therefore with some delight that it can now be reported that, on time, the Civil Justice Council’s working group, chaired by Mr Justice Stewart, has published its Consultation Paper, with the consultation period closing on 31 March 2021.
The Paper runs to some 100 pages, however, and for the assistance of our readers, here are the highlights.
In looking at the methodology
v The working group has, in its recommendations for consultation, sought to follow “the traditional basis of the GHRs”;
v the Paper has been based upon data which the group considered was “sufficient (though a few were borderline sufficient)”;
v there had been difficulties in obtaining data from large commercial firms;
v much of the data in larger and more complex matters had to be gleaned from judicial summary assessments; and
v that it was likely that a further, more thorough and “deeper” review “should be considered once the need is considered by the CJC to have arisen” which “may well be within, say three years, though it is difficult to predict…That would be the appropriate occasion to examine the methodology, how effective this working group’s work has been, and any appropriate, evidence-based amendments to geographical areas.”
In considering the actual rates, the group noted that inflation since 2010
1. was 13% (SPPI) for all services;
2. was 17% (SPPI) for professional services;
3. was 34% (SPPI) for legal services; and
4. was, by comparison, 24% overall (CPI); but also
5. that the last GHCR figures were “more historic than evidence-based” and therefore “seriously open to challenge” in any event.
As to the recommendations, these are
1. that London 1 & 2 rates are changed to reflect the nature of the work being done rather than geographic location, given the “vast range of work of varying complexity and size”;
2. as such, therefore, London 1 would be for complex commercial and corporate work and London 2 for all other types;
3. that the present boundaries for London 3 & 3 required to be redefined due to “anomalies”;
4. that geographic location should now be considered as relevant to the assessment of appropriate rate, to include amendments to N260 and Bills of Costs to include details of the location of the fee earner(s) undertaking the work
5. that the current National Bands 2 & 3 be merged as there was currently no difference in the GHCR rates and nor did the group consider that there would be any difference in their ultimate recommendations;
6. that a single National rate (excluding London) could be considered in a future review;
7. that areas not currently covered to a band should be allocated to one; and
8. that, whilst currently impractical, rates should be reviewed in the future and updated on a regular basis.
Overall, the recommendation was that rates ought to increase within a range of between 7% to 35%, dependent upon the nature of the work being carried out, with the following figures being suggested:
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