"Changes to the guideline solicitor hourly rates will affect the recoverability of legal costs incurred when dealing with litigation matters. This cost is likely to be passed on to the businesses litigating, who will be looking for alternatives."
The guidelines on solicitor hourly rates are undergoing a review and an announcement should have already been made by now. The decision continues to be delayed. The rates are often applied by Judges when deciding what sum can be recoverable when assessing costs. The rates change depending upon where the firm of solicitors is based.
The Master of the Rolls, Lord Dyson, stated the rate changes "may have far reaching effects on the legal services market".
Initial reaction is that the use of paralegals will become less cost effective. Work carried out by paralegals when assisting other more senior fee earners, could be devalued significantly. This means that the courts will be likely to award a reduced amount for work carried out by paralegals on files where more senior fee earners are involved.
The legal market has seen an increase in the use of paralegals, as generally they are paid less than solicitors and therefore the firms can carry out the work more cheaply. Paralegals tend to be most common in fixed fee services such as low value RTA claims, conveyancing and will writing.