James Rees of A & M Bacon looks at the factors that may influence when you can apply for an enhanced hourly rate for your work
Application of an enhanced hourly rate is increasingly being accepted in many Court of Protection cases. They are being accepted on many grounds but, more than likely, the issue is that changes in the Guideline Hourly Rates have not been made for many years.
Firstly, let’s take it back to 2010 which was when the Guideline Hourly Rates (GHR) were last updated. Prior to then, the rates were updated on either a yearly or two-yearly basis before the final report was published by the Master of the Rolls. This report was published on 17 April 2015, confirming that GHRs would remain at their existing level, as originally set in 2010. This report confirmed that any further decisions leading to the updates on the GHR’s could not be made unless “robust evidence” suggested otherwise.
This stagnation is now becoming more of a concern given the rising overheads associated with practice. The costs of living, inflation and the administration of running a law firm have increased significantly over the past 10 years and would, you think, be evidence that the hourly rates should be increased. It could be argued that that many law firms have unfortunately entered into administration or suffered financial loss for precisely those reasons. This is obviously a grave concern for all practitioners and therefore practical and reasonable steps must be considered to avoid these issues.
Whilst many law firms continue to apply the Guideline Hourly Rates for their geographical areas, as this is widely accepted by the SCCO, there are other approaches that should be considered to make a profitable margin on the work being undertaken. That’s where the use of enhanced rates should be seriously considered, but doing so needs careful handling to overcome any concerns raised by the Court of Protection or Office of the Public Guardian. To help, we have listed below, some factors that should be reviewed before applying an enhanced rate to ensure maximum recovery is achieved on assessment.
1. Complexity of the work
Different work involves different levels of complexity. For example, dealing with contentious cases involving international assets, stocks and shares, investments and business interests and family difficulty indicates a good reason why an enhanced rate could be applied.
2. Size of P’s assets
One of the main issues to consider when applying an enhanced rate is the size of P’s assets. The rules of proportionality apply and must be considered. For example, if P’s assets are modest and are decreasing significantly year by year, it may be unreasonable to apply an enhanced rate as this would only accelerate the decline of P’s estate.
3. The fee earner’s grade
Imagine a pyramid sectioned into four equal levels, the bottom level being Grade D with each level going up by Grade C, B and A with A being the most senior fee earners. The bottom level, Grade D, is the largest and so for those fee earners there is greater leeway for the application of an enhanced rate. The layers get smaller going up the pyramid and that reduction represents that charging an enhanced rate for the senior fee earners might be more difficult. This is not to say that you should not apply an enhanced rate for the more senior fee earners, just a warning that recovery may be difficult (we have often successfully recovered an enhancement on grade D rates where we can justify it).
4. The type of work
You should also consider the nature of the work undertaken. As briefly touched upon above, certain tasks will not attract an enhanced rate both out of reasonableness and to reflect the case law. For example, a recent case [Connor Kirby] suggested that individual payments should be claimed at the lowest rate (Grade D) and at a maximum of half a unit (3 minutes). Accordingly, the SCCO will not depart from this rule and applying the enhanced rate would be unreasonable for making routine payments.
Furthermore, The Good practice guidance from the Office of the Public Guardian and the Senior Courts Costs Office (SD9) offers some useful insights. One of the key takeaways is the indication that Costs Officers will make allowances should cases involve “exceptional circumstances”. We have dealt with many contentious, complex and high value cases where such circumstances have arisen and applied an enhanced rate which was both reasonable and proportionate to the case. Additional justification is required to support these rates (usually within the bill narrative) but with the correct approach, they can be accepted by the Court.
It is important to emphasise that the guidance on GHR’s is intended to help and assist judges, they are not set in stone, Therefore there is always potential to apply an enhanced hourly rate on your bills.
Court of Protection Costs Expert, A&M Bacon
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