After a great deal of consultation, the guideline hourly rates that Judges use when assessing costs, have been reviewed and will be updated.

The guideline hourly rates set out what is usually reasonable for a party to recover from its opponent for work carried out by a solicitor or lawyer. The rates vary depending upon the experience of the solicitor and the location of the solicitor’s offices. Experienced solicitors in Central London had the highest guideline hourly rates (£409) whereas paralegals and trainees in rural areas had the lowest rates (£111).

The last time the guideline hourly rates were reviewed and increased was back in 2010. It was expected they would go up at some point and new rates will come into effect from 1 October 2021. For example, the top hourly rate in Central London has gone from £409 up to £512. The lowest rate for paralegals in rural areas has gone from £111 up to £126.

The vast majority of work outside London, for example in cities like Manchester, Leeds and Birmingham see increases to their hourly rates too. For example, a senior solicitor in those cities sees the guideline hourly rate jump from £217 to £261.

The courts have discretion when it comes to costs and Judges have been prepared to allow rates above the guideline hourly rates already. It is anticipated however, that Judges will allow the new rates with pretty much immediate effect

What Does The Increase In Guideline Solicitor Hourly Rates Mean For Businesses And Clients Of Solicitors?

In short, it is likely to become more expensive. Solicitors not yet already charging in line with the new guideline hourly rates may look to increase their charges to clients to match the rates. Some solicitors were cautious against charging greatly above the guideline rates on the basis that the additional amount was unlikely to be recoverable from the other side, even if the client’s case was successful.

The guideline hourly rates were not only used by solicitors in litigation matters but were also used by many firms to decide at what rate and amount to charge for other legal services such as wills & probate, property and commercial work. For example, if a piece work transactional work takes 3 hours, the price for that work might be set by multiplying the hourly rate by the number of hours, ie prepare simple terms and conditions is charged at £650 plus VAT (because 3 x the hourly rate of £217 arrives at £651).

It is all the more reason to look at ways to reduce your legal spend where possible, as the increase in rates is likely to see an increase in charges. Learning how to carry out your own debt recovery is one of the ways to reduce your legal spend and keep control.