An end to the 2010 level of costs recovery set by the Guideline Hourly Rates for Costs Review is under way, some comfort in the meantime comes from Master Whalan in the SCCO in Re PLK  9 WLUK 364.
For the past decade hourly rates have been based on the Solicitors’ Guideline Hourly Rates, guideline figures for carrying out a summary assessment of court costs, listed by pay band and grade for different parts of the country, found at https://www.gov.uk/guidance/solicitors-guideline-hourly-rates. Practitioners have been frustrated for years by the lack of updating, not least when a review of the rates due in 2014 under the Foskett committee made no recommendations for any increase due to lack of evidence.
In the meantime, receiving parties have been spending their time advancing well worn (and meritorious) arguments that (1) the guideline rates are 10 years old and at the very least should be adjusted for inflation; (2) they are guidelines, not tramlines; (3) they are at best a starting point; (4) they are suitable only for the assessment of costs in cases lasting 1 day or less (being for summary assessment, with cases lasting over 1 day having their costs sent to detailed assessment rather than summarily assessed.) Judges have in turn become adept at making their own assessments of an appropriate hourly rate for any particular case, having regard to all the circumstances, including the conduct of the parties, the value of the claim, the importance of the matter to the parties, the complexity of the issues, and the skill, time and effort spent: CPR 44.4.
Matters however progress. In the autumn of this year Mr Justice Stewart was commissioned by the Master of the Rolls to chair a working group tasked with gathering evidence of rates allowed in practice by costs judges and costs officers on detailed assessments (including provisional assessments), in order to make recommendations to the Deputy Head of Civil Justice and to the Civil Justice Council. Members of the group include Senior Costs Judge Andrew Gordon-Saker, Judge Bird (DCJ Greater Manchester) and District Judge Simon Middleton, as well as solicitors, a barrister, representatives of CILEx, consumers and the MoJ. A member of the Civil Justice Council has also joined the group. Evidence is being gathered between 1 September and 27 November, with a view to reporting by the end of this year, with updated rates hopefully being published in the first half of 2021.
There has also been recently more vocal judicial pronouncement on the lack of contemporaneous utility of the 2010 rates. Firstly in Ophen Operations Ltd v Invesco Fund Managers Ltd  EWHC 2504 (TCC) O’ Farrell J had the following to say,  “As to the first point, the hourly rates of the defendant’s solicitors are much higher than the SCCO guideline rates. It is unsatisfactory that the guidelines are based on rates fixed in 2010 and reviewed in 2014, as they are not helpful in determining reasonable rates in 2019. The guideline rates are significantly lower than the current hourly rates in many London City solicitors, as used by both parties in this case. Further, updated guidelines would be very welcome.”
The court recognized the reasonableness of a market rate for skilled legal services as follows,  … “Although the value of the case is not particularly high for this court, the technical nature of the dispute justifies the engagement of solicitors with the appropriate skill and expertise to ensure proper and efficient conduct of the litigation. Solicitors providing such skill and expertise are entitled to charge the market hourly rate for their area of practice. The hourly rates charged cannot be considered in isolation when assessing the reasonableness of the costs incurred; it is but one factor that forms part of the skill, time and effort allocated to the application. It may be reasonable for a party to pay higher hourly rates to secure the necessary level of legal expertise, if that ensures appropriate direction in a case, including settlement strategy, with the effect of avoiding wasted costs and providing overall value.”
Most recently, and significantly, is the decision of Master Whalan in the SCCO in Re PLK EWHC  B28 (Costs). This 30 September 2020 decision putsthe commercial reality of 2020 costs, of Deputies, fully in the spotlight. A chosen selection of 4 Deputies, responsible for the management of property and affairs of protected parties, had their costs assessments consolidated specifically to allow the SCCO to address the perceived unfairness of basing costs on the guideline rates. The ‘test’ cases were chosen specifically to represent regional variations. Of the 4, 2 represented parties who suffered brain injuries at birth, and 2 had sustained head injuries as a result of RTAs. The assessments raised a common point of principle applicable to the decisions of Costs Officers and Costs Judges when assessing costs incurred in the Court of Protection (‘COP’) by a court appointed Deputy (and his/her associates) in the general management of the affairs of a protected party. The issue for determination concerned the method of assessment of the hourly rates claimed by Deputies. The applicants challenged the application of the Guideline Hourly Rates as being unjust, and sought a more flexible exercise of the discretion conferred by CPR 44.3(3), whereby the GHR are utilised as merely a ‘starting point’ and not a ‘starting and end point’.
Master Whalan did not accept that Deputies’ own costs and overheads had increased such as to render an increased hourly rate automatically appropriate, but broadly accepted he was  “satisfied that in 2020 the GHR cannot be applied reasonably or equitably without some form of monetary uplift that recognises the erosive effect of inflation and, no doubt, other commercial pressures since the last formal review in 2010. I am conscious equally of the fact that I have no power to review or amend the GHR. Accordingly my finding and, in turn, my direction to Costs Officers conducting COP assessments is that they should exercise some broad, pragmatic flexibility when applying the 2010 GHR to the hourly rates claimed. If the hourly rates claimed fall within approximately 120% of the 2010 GHR, then they should be regarded as being prima facie reasonable. Rates claimed above this level will be correspondingly unreasonable. To assist with the practical conduct of COP assessments, I produce a table below which demonstrates the effect of a 20% uplift of the 2010 GHR. I stress again that I do not purport to revise the GHR, as this court has no power to do so; instead this is a practical attempt to assist Costs Officers and avoid unnecessary delay (caused by individual re-calculation) in a busy department conducting over 8000 COP assessments per annum.”
Whilst a blanket % uplift simply for inflation was expressly rejected, in reality this is the effect of the decision.
Following PLK the Senior Costs Judge has published a new practice note setting out the meaning and limitations of the decision, at https://www.judiciary.uk/wp-content/uploads/2020/10/Practice-Note-COP-1.pdf. The judgment recognised that costs officers should exercise some broad, pragmatic flexibility when applying the 2010 GHR to the rates claimed and that if the rates claimed fall within approximately 120% of the GHR they should be regarded as prima facie reasonable . The judgment does not disapply or abrogate the indemnity principle. Consequently, costs officers will have no discretion to allow higher hourly rates than have been claimed. The judgment will be of relevance only where rates in excess of the 2010 GHR have actually been claimed in the bill.
The increase applies only to recent work: the judgment is limited to the years 2018 and following . While it is recognised that every bill is fact specific, it was noted  that the approach taken in the cases of Louise Smith and Yazid Yahiaoui remains applicable. It follows that bills up to 31 December 2017 will continue to be assessed by costs officers on that basis and that save in exceptional circumstances the 2010 guideline hourly rates (GHR) will continue to apply.
Whilst PLKapplies specifically only to Deputy / Court of Protection costs, it is inevitable that it assists with all other areas of costs. For personal injury and clinical negligence practitioners there is scope within the decision itself to argue for potentially even higher increase than the 20%, the Master having referred expressly to the higher expenses incurred in such areas as follows,  “However reliable the figures produced may be, they do not, in my view, demonstrate that the burden is one that is exclusive to COP work or that it is atypically high in comparison with that experienced by practitioners in comparable areas of practice. Fee earners in personal injury, medical and professional negligence, for example, incur invariably time and expense that is irrecoverable, in marketing, accessing cases that are not proceeded with or, indeed, pursued and lost. These are burdens which do not apply to Deputy’s sources of work (on a case by case basis) which is often consistent and predictable over many years.”
Further decisions are highly likely, but for now, for 2018 work onwards, there is much to be hopeful for personal injury and clinical negligence fee earners.