Changes to guideline hourly rates (GHR)

Guideline hourly rates (GHR) are the widely-accepted reference point for calculating lawyers’ fees, and they vary for different grades of lawyer in different regions of England and Wales. In her latest blog, Associate Solicitor Rebecca Brisley outlines the recent proposed changes to the GHR system.

Solicitors’ fees can be a somewhat contentious source of dinner table conversation.  As many people know, lawyers tend to charge for their time in six-minute units; and the hourly rate is broken down into 10 units of six-minute intervals.

The perception is that lawyers deliberately charge vast amounts of money. However, according to geographical location, the Senior Courts Costs Office (SCCO) sets national guideline hourly rates (GHR).

Judges use the national GHR – in contentious legal cases – to assess the costs incurred throughout a personal injury claim.

Most people will be surprised to learn that personal injury lawyers will always have their costs reduced. These reductions tend to happen during negotiations with the paying party or a costs judge at the end of a successful claim.

Any reduction in costs can be for various reasons. Suffice to say; there are mechanisms and rules in place to ensure lawyers recover reasonable and cost proportionate fees in respect of any work completed.

It is important to remember that personal injury lawyers don’t get paid for work on any unsuccessful cases – a risk faced by all law firms that offer  ‘No Win No Fee’ arrangements.

Changes to guideline hourly rates

So why is this is topic up for discussion now? The guideline hourly rates for law firms have not increased since 2010, which is now almost 11 years ago.  In that time, interest rates have fluctuated, and Brexit has brought uncertainty. Of course, everything has gone up in price, from the cost of living through to business rates, salaries, indemnity insurance and all the other costs associated with running a business.

Law firms have been able to weather the refusal to increase hourly rates over the last 11 years by embracing technology, allowing lawyers to work more efficiently.

However, in a move that the legal world will undoubtedly welcome, the Civil Justice Council has finally recommended increases to the GHR. The changes will depend on particular lawyers’ grades (all lawyers are graded A-D, depending on their level of experience) and where they are based.

What this means is that both lawyers and their clients will have greater clarity about costs. It means that law firms can continue to provide a high standard of service to their clients and charge a fair hourly rate. The GHR will reflect the hard work, knowledge and depth of experience lawyers apply to their clients’ claims to achieve successful outcomes. The change has to be a positive step forwards in the right direction at last.