Re PLK, Thakur, Chapman & Tate - An indication of guideline hourly rate revision?

The recent decision of Master Whalen in the case of Re PLK, Thakur, Chapman & Tate (SCCO Refs: 13080340, 12177963, 11775290 and 11620036) is a landmark decision to be welcomed not only by Court of Protection practitioners, but all those litigating on behalf of protected parties.

The case involved a detailed look at the application of the Guideline Hourly Rates (GHR), approved by the Costs Committee of the Civil Justice Council in 2010. All practitioners involved in court work will be aware that it is now ten years since the GHR came into force and that there have been no revisions to the rate. Whilst there has been a willingness by some judges to depart from the GHR, it remains an unfortunate benchmark in the assessment of bills in circumstances where many solicitors' rates no longer match the GHR's banding. The GHR has however proved particularly problematic for those who practise in the field of Court of Protection work. As all bills are assessed by the court, it has meant that Court of Protection practitioners have now been working at 2010 rates for 10 years. The issue brought before the court in Re PLK was whether the court should apply an uplift to the GHR when assessing bills, to reflect inflation and increases in overheads in recent years. Rule 19.6 of the Court of Protection Rules 2017 allows Rule 44.3 (3) of the CPR to be applied to the assessment of Court of Protection bills.  Rule 44.3 (3) lists the factors the court must consider when assessing bills, and, in respect of Court of Protection bills, these were listed by the court to be:(b) the amount or value of any money or property involved; (c) the importance of the matter to all the parties; (d) the particular complexity of the matter or the difficulty or novelty of the questions raised; (e) the skill, effort, specialised knowledge and responsibility involved; (f) the time spent on the case; (g) the place where and the circumstances in which work or any part of it was done.The application in Re PLK was brought by 4 Court of Protection deputies (Chris Proxamatis of Gilhams Solicitors, Lynne Bradey of Wrigleys Trustees Ltd, Natasha Molloy of Freeths LLP and Alexander Wright of Boyers Turner LLP), who put two broad submissions to Master Whalan:

  1. The court should assess the hourly rates claimed in COP bills by reference to the relevant factors in CPR 44.4(3). In doing so, the court should not 'slavishly' follow and apply the GHR, but should instead use them as a starting point for an unfettered assessment conducted 'by reference to the Court's judicial experience'.
  2. If the court feels it desirable to use the GHR as a starting point, then it must apply an empirical uplift to reflect the incidence of inflation between 2010 and 2019. At best, the GHR should be no more than a starting point for an assessment which, by reference to the 44.4(3) factors, should usually lead to the endorsement of higher hourly rates.

The GHR has long been criticised as not reflecting the reality of modern solicitors' practice. The GHR remains under review and practitioners eagerly await the outcome of Civil Justice Council's review. The GHR has attracted judicial criticism in the past, for example in the case of Ohpen Operations UK Limited v. Invesco Fund Managers Limited [2019] EWHC 2504, in which O'Farrell J commented about the unsatisfactory nature of the GHR in determining reasonable rates in 2019.However, specifically in relation to Court of Protection work, the case of Smith and others [2007] EWHC 90088 was judicial approval given by Master Haworth that GHRs would continue to apply to Court of Protection bills. In Re PLK, the judge expressly found that the approach by Master Howarth in Smith was the correct approach. However, in a departure from previous decisions, the judge did allow for an inflationary increase to the GHR. The judge emphasised that his court had no power to review or amend the GHR, either formally or informally. He also made clear that an application of an inflationary uplift to the GHR was an approach which had been rejected since 2014. However, he did acknowledge that the GHR cannot be applied fairly as an index of reasonable remuneration unless these rates are subject to some form of periodic, upwards review. The judge heard submissions as to how the rates should be increased, but pointed out that the official rate of UK inflation was CPI and that the rate of inflation between 2010 and 2019 was approximately 21%.Taking this into account, the judge 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  other commercial pressures, since the last formal review in 2010.He therefore directed Costs Officers conducting Court of Protection assessments to exercise some broad, pragmatic flexibility when applying the GHR to the hourly rates claimed. If the hourly rates claimed fell within approximately 120% of the GHR, Master Whalan's view was that they should be regarded as being prima facie reasonable. His judgment contained a table showing the net increase of a 20% increase on the GHR:

Bands A B C D
London 1 £490 £355 £271 £165
London 2 £380 £290 £235 £151
London 3 £275 -320 £206-275 £198 £145
National 1 £260 £230 £193 £142
National 2 £241 £212 £175 £133The revised rates are therefore a welcome revision to the application in the GHR in Court of Protection bills and contentious cases within the Court of Protection. The case is also a clear indication of judicial acceptance that the GHR no longer reflects commercial reality, though it remains to be seen whether the Civil Justice Council will reflect Master Whalan's reasoning if and when the rates are revised. For more information, please contact Robert Hill in Freeths' Contentious Trusts and Estates team or Natasha Molloy, (who was involved as deputy and joint applicant in the case) in Freeths' Court of Protection team.


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