SENIOR MASTER COOK’S GUIDANCE ON COST MANAGEMENT HEARINGS: A PIECE BY PIECE GUIDE (1): THE GENERAL APPROACH AND HOURLY RATES
Senior Master Cook published the Kings Bench Masters Cost Management Hearings Guidance Note on the 26th September. I am going through this on a topic by topic guide. Here we look at the general approach to budgeting and hourly rates. It is always useful to have a reminder of the basic elements of budgeting
1. A costs budget is not reached through the same process as detailed assessment.
However, in considering whether a budget is proportionate the court required to have
regard to the provisions of CPR 44.3 (5). This provides:
Costs incurred are proportionate if they bear a reasonable relationship to –
(a) the sums in issue in the proceedings;
(b) the value of any non-monetary relief in issue in the proceedings;
(c) the complexity of the litigation;
(d) any additional work generated by the conduct of the paying party,
(e) any wider factors involved in the proceedings, such as reputation or public
importance; and
(f) any additional work undertaken or expense incurred due to the vulnerability
of a party or any witness.
2. In considering whether costs are reasonable the following factors which are set
out at CPR 44.4 (2) are relevant to the amount of a costs budget:
(a) the amount or value of any money or property involved;
(b) the particular complexity of the matter or the difficulty or novelty of the
questions raised;
(c) the skill, effort, specialised knowledge and responsibility involved;
(d) the place where and the circumstances in which work or any part of it is to
be done.
3. General issues that commonly arise
3.1 Hourly rates of solicitors. When undertaking costs management, it is not the
role of court to fix or approve rates (see CPR 3.15(8)). There is, accordingly, no
requirement for the court to make any determination of the reasonableness of hourly
rates. Nevertheless, in considering whether a proposed budget is reasonable, regard
may be had to the reasonableness of the hourly rates claimed (and the availability of
other solicitors to do the work competently at lesser rates). Further, in a detailed
assessment it is often recognised that the GHR are a starting point in determining the
reasonableness of the rates claimed; thus an allowance of a budget which is based on
hourly rates that involve some uplift on the GHR may be appropriate, in particular for
more senior fee earners dealing with complex high value claims.
4.2 Reservation of hourly rates to detailed assessment. It is clear and well
established that it is not appropriate to costs budget on the basis that hourly rates will be
reserved to detailed assessment, see Yirenkyi v Ministry of Defence [2018] EWHC 3102
(QB)