Increase in Solicitors’ Guideline Hourly Rates
Solicitors in England and Wales have entered the new year with updated Guideline Hourly Rates (GHR), reflecting the latest economic changes. Effective from 1 January 2025, the Master of the Rolls, Sir Geoffrey Vos, announced a 3.65% increase to the GHR, following the Civil Justice Council’s (CJC) recommendation to align rates with the Services Producer Price Index (SPPI). These rates serve as a framework for assessing legal costs in litigation and are periodically updated to maintain relevance to inflation and evolving market conditions. Please also see previous article where solicitors hourly rates r were increased on 1st January 2024.
Updated Hourly Rates for 2025
The new rates for Grade A solicitors (those with over eight years of post-qualification experience) reflect regional and sector differences:
- Commercial and Corporate Work in Central London: £566 per hour.
- Other Work in Central London: £413 per hour.
- Outer London Work: £312 per hour.
- Nationally (non-London): £288 per hour.
- In regional hubs like Manchester and Liverpool, the rate for Grade A solicitors has increased to £272 per hour, up from £255.
A Decade of Stagnation Ends
The 2025 increase builds on a 6.66% uplift in January 2024, which ended more than a decade of stagnant rates. The adjustments are part of an ongoing effort by the Civil Justice Council to ensure GHR remain relevant in an increasingly digitalised civil justice system. A working group has also been established to review the methodology underpinning these rates and consider further refinements, including a potential top rate for complex commercial work, which would depend on the nature of the case rather than its location.
Guideline, Not Rule
GHR provide a starting point for assessing reasonable legal costs, but they are not mandatory. Courts may allow higher hourly rates for cases involving greater complexity or higher stakes. For example, the rates are often exceeded in complex commercial disputes, where justifying the higher charges is possible. Judges frequently stress that these rates are “broad approximations only”, offering flexibility based on individual case circumstances.
Implications for Legal Practitioners
Legal practitioners are encouraged to review their retainers and hourly rates in light of these updates. As Sean Linley, a senior costs draftsperson with Carter Burnett, advises, it’s crucial to ensure that retainers permit adjustments to rates and that clients are properly notified of any changes. Failure to adhere to agreed terms could lead to disputes over costs under the indemnity principle, which limits recovery to rates agreed with the client.
Moreover, paying parties may increasingly argue that the updated GHR make deviations less justifiable, potentially influencing the assessment process. Practitioners must be prepared to defend higher rates where appropriate.
Future Developments
The Civil Justice Council continues to assess broader reforms to legal cost assessments, including the introduction of guideline counsel fees and adjustments for specific types of complex work. These efforts aim to modernise the system further and ensure it reflects contemporary practices and economic realities.
