Guideline Hourly Rates 2026: What Claimant Firms Need to Know

The 2026 Guideline Hourly Rates are now in force. For claimant solicitor firms, the new rates matter — they affect how bills are drafted, how N260s are prepared, how Precedent S is presented, how Points of Dispute are answered and how costs negotiations are approached.

But there is a common mistake.

Some firms treat the Guideline Hourly Rates as though they are automatic recoverable rates. Others treat them as a hard ceiling and underclaim work that was properly carried out by experienced fee earners. Both approaches are risky.

The 2026 GHR are an important starting point, but they are not a substitute for proper costs presentation. The real question on assessment is not simply whether the claimed rate appears in the table. The real question is whether the rate, grade and work done can be justified on the facts of the file. That is where claimant firms need to be careful.

What Are the 2026 Guideline Hourly Rates?

The Guideline Hourly Rates are hourly rate figures used as a reference point in the assessment of solicitors’ costs in England and Wales. They are divided by:

• fee earner grade;
• location band;
• level of experience; and
• type of fee earner.

The 2026 rates apply from 1 January 2026. They are particularly relevant to summary assessment, but in practice they are also heavily relied upon in detailed assessment, costs negotiations and Points of Dispute.

For claimant firms, the GHR are not just a table. They are a negotiation anchor. If the bill claims rates at or around the applicable GHR, the paying party may still challenge grade, proportionality, duplication and the level of work. If the bill claims rates above GHR, the receiving party should expect a more focused challenge and should be ready to justify the departure.

2026 Guideline Hourly Rates Table

The 2026 rates are as follows:

These figures should be used carefully.

A bill that claims Grade B rates does not automatically recover Grade B rates. The fee earner must genuinely fall within that grade and the work must be suitable for that level of fee earner. Equally, a paying party cannot simply reduce a bill because it does not like the total figure. If the rates are GHR-aligned, the grades are correct and the work was necessary, the receiving party should be ready to defend the bill.

What Changed in 2026?

The 2026 GHR increased from the 2025 figures.

The uplift was modest, but it still matters across a large bill. A small hourly increase can make a real difference where the file includes substantial review time, client contact, disclosure work, medical evidence, expert reports, settlement negotiations or detailed assessment preparation.

For claimant firms handling Housing Disrepair, MoD NIHL, clinical negligence and industrial disease files, the 2026 rates should be reflected in:

• bills of costs;
• electronic bills;
• Precedent S;
• N260s;
• schedule of costs;
• budgets where applicable;
• Points of Dispute replies;
• internal rate reviews; and
• settlement negotiations.

If your firm is still using older rates, you may be underclaiming. If your bill uses updated rates without explaining fee earner grade and work allocation, you may be creating easy arguments for the paying party.

Are the Guideline Hourly Rates Binding?

No. The Guideline Hourly Rates are not a fixed costs regime. They are guidance.

That distinction matters.

A paying party may argue that GHR should operate as a cap. A receiving party may argue that the facts of the matter justify rates at or above the guideline level. The court will look at the work done, the complexity of the matter, the value of the claim, the conduct of the parties, the location of the solicitor, the importance of the matter and the proportionality of the overall costs.

In practical terms, the GHR are often treated as the starting point. If a bill claims GHR, the argument often moves to whether the grade and time are reasonable. If a bill claims above GHR, the argument often becomes whether there is evidence to justify an enhanced rate.

The mistake is thinking that the table does all the work. It does not. The bill still needs to be properly drafted.

Standard Basis Costs: Why Rates Are Only One Part of the Argument

Most claimant costs are assessed on the standard basis unless there is an order or agreement for indemnity costs. On the standard basis, the court considers whether costs were reasonably and proportionately incurred and whether they are reasonable and proportionate in amount.

That means hourly rates are only one part of the assessment. The paying party can still attack:

• excessive time;
• duplication;
• senior fee earners doing routine work;
• vague attendances;
• excessive client contact;
• unnecessary letters;
• excessive review time;
• counsel’s fees;
• expert fees;
• disbursements;
• lack of proportionality;
• poor phase coding;
• weak file chronology; and
• insufficient evidence of fee earner status.

A bill can use the correct 2026 GHR and still be reduced heavily if the rest of the bill is weak. That is why claimant firms should see GHR as part of the costs strategy, not the strategy itself.

The Biggest Paying Party Arguments on Hourly Rates

1. “The claimed grade is too high”

This is one of the most common challenges.

A paying party may argue that the fee earner has been incorrectly graded, especially where Grade A or Grade B rates are claimed. The answer is evidence. The bill should clearly identify:

• the fee earner’s name;
• job title;
• qualification;
• years of post-qualification experience or equivalent experience;
• grade claimed;
• hourly rate claimed;
• role on the file; and
• whether the work was suitable for that grade.

If the fee earner is a solicitor or legal executive with the required experience, say so. If the fee earner is an equivalent fee earner, the equivalence should be clear. Do not make the paying party guess.

2. “Grade A work was not required”

Even where the Grade A rate is correct, the paying party may argue that the work did not require Grade A input. That can be a fair point if a senior solicitor has carried out routine chasers, basic letters or administrative steps. But there are many files where senior input is appropriate, including:

• difficult limitation issues;
• disputed causation;
• complex settlement advice;
• vulnerable clients;
• serious disrepair;
• expert evidence disputes;
• high-value clinical negligence;
• MoD NIHL matrix issues;
• tactical Part 36 decisions;
• detailed assessment strategy; and
• supervision of junior fee earners.

The key is allocation. Senior fee earner time should be targeted and justifiable. Routine work should be delegated where possible. If the bill shows sensible allocation, it is easier to defend.

3. “The firm is claiming the wrong location band”

Location band arguments are common. The paying party may argue that the wrong geographical band has been applied, especially where the firm has multiple offices, remote fee earners, centralised costs teams or a London correspondence address.

The bill should identify the proper location basis and avoid confusion. For firms outside London, National 1 and National 2 must be checked carefully. Manchester Central, for example, falls into National 1, while many other areas fall into National 2. If the wrong band is used, the paying party will exploit it.

4. “The rate is above GHR and not justified”

Above-GHR rates are not impossible, but they need a reason. Possible justification may include:

• unusual complexity;
• specialist expertise;
• urgency;
• high-value litigation;
• difficult liability or causation issues;
• importance to the client;
• vulnerable claimant issues;
• complex expert evidence;
• conduct by the paying party increasing costs; or
• specialist costs or litigation knowledge.

But the bill must make the justification clear. Simply claiming a higher rate and hoping it survives is not a strategy.

5. “The rates are proportionate, but the total bill is not”

This is where many claimant firms get caught.

A paying party may accept that the hourly rates are broadly correct but still argue that the overall bill is disproportionate. This is especially common in:

• Housing Disrepair;
• MoD NIHL;
• low-value industrial disease;
• credit hire;
• modest personal injury;
• lower-value clinical negligence; and
• settled pre-issue claims.

The response is to make sure the bill explains the work in context. The total bill should be supported by a clear narrative showing why the work was necessary, what issues arose, whether the defendant delayed, whether expert evidence was needed and how settlement was achieved.

Why GHR Matters in Housing Disrepair Costs

Housing Disrepair costs are often attacked on proportionality and hourly rates.

The damages may be modest, but the work required can be significant. There may be damp, mould, leaks, expert inspections, disclosure delays, access problems, vulnerable tenants, children in the property, repair disputes and Part 36 offers. Paying parties often argue that senior rates are excessive for what they describe as a routine disrepair claim. A strong HDR bill should show:

• why the claim was not purely routine;
• what defects were involved;
• when notice was given;
• whether the landlord delayed;
• whether expert evidence was needed;
• whether the client required additional support;
• which work was done by junior fee earners;
• which work required solicitor review; and
• why the claimed rates are reasonable.

The GHR helps anchor the rate. The bill narrative helps justify recovery. For more on this, see our guide to housing disrepair costs in 2026.

Why GHR Matters in MoD NIHL Costs

MoD NIHL files are another area where rates matter.

The paying party may say that military hearing loss claims are processed in volume and should attract reduced rates. Claimant firms should be ready to show the work that was actually required. A properly run MoD NIHL file may involve:

• service history;
• noise exposure evidence;
• audiology;
• tinnitus;
• hearing aid evidence;
• medical evidence;
• limitation;
• matrix settlement advice;
• offer review;
• settlement wording; and
• costs-only issues.

If a senior solicitor has reviewed limitation, causation, settlement or matrix-related advice, that work may be justifiable. If a senior solicitor has carried out routine chasing, it may be vulnerable. The bill should make that distinction clear — see our guide to MoD NIHL costs after matrix settlement.

Why GHR Matters in Clinical Negligence Costs

Clinical negligence claims are often more complex and expert-heavy than other claimant work. Rates may be attacked, but the complexity of the file can support appropriate solicitor involvement where properly evidenced. A clinical negligence bill should show:

• the medical issues;
• expert disciplines;
• chronology;
• breach and causation work;
• medical record review;
• conferences;
• liability response;
• Part 36 strategy;
• settlement advice; and
• supervision.

If the work required specialist clinical negligence experience, the bill should say so. However, even in clinical negligence, routine work must be allocated sensibly. A strong rate claim can be weakened by poor delegation.

How Claimant Firms Should Present Fee Earner Grades

The safest approach is to give the paying party fewer easy arguments. Each bill should clearly identify:

• Grade A fee earners;
• Grade B fee earners;
• Grade C fee earners;
• Grade D fee earners;
• hourly rate claimed;
• qualification and experience;
• role on the file;
• supervision structure; and
• any changes in rate over time.

Avoid vague descriptions such as “solicitor”, “fee earner” or “case handler” where the grade may be challenged. The more transparent the bill, the harder it is for the paying party to make broad-brush reductions.

How to Deal With Rate Challenges in Points of Dispute

When a paying party challenges hourly rates, the reply should not simply say: “The rates claimed are reasonable.” That is too weak.

A better reply should address:

• the applicable 2026 GHR;
• the correct location band;
• the fee earner’s grade;
• the fee earner’s experience;
• the nature of the work;
• the complexity of the claim;
• the proportionality of the rate;
• the conduct of the paying party, if relevant;
• why any above-GHR rate is justified; and
• why the proposed paying party reduction is too low.

A proper reply should be file-specific. Generic replies invite generic reductions.

Should Claimant Firms Claim Above GHR?

Sometimes, yes. But not automatically.

Claiming above GHR may be justified where the file genuinely required specialist expertise, unusual urgency, complexity or senior strategic input. However, above-GHR rates should be approached carefully. If the file is low-value, routine or poorly evidenced, an above-GHR claim may distract from stronger parts of the bill and create unnecessary friction.

The question is not simply: “Can we claim above GHR?” The better question is:

“Can we justify this rate on this file, with this evidence, before this paying party or court?”

If the answer is no, it may be better to claim GHR and remove one argument from the dispute.

Should Claimant Firms Use GHR Even If Their Retainer Has Higher Rates?

The indemnity principle still matters.

A receiving party cannot usually recover more from the paying party than the client is liable to pay under the retainer. If the client’s retainer permits higher rates, that does not automatically mean those higher rates will be recovered. The claimed rates must still be reasonable and proportionate.

If the retainer rates are lower than GHR, the recoverable rate may be limited by what the client is actually liable to pay. That is why the retainer, CFA, client care documents and rate information should be checked before the bill is finalised.

N260s and Interim Applications

The 2026 GHR also matter for N260s. On summary assessment, the court may look closely at whether the rates are appropriate for the hearing, application and level of fee earner involved. For interim applications, claimant firms should check:

• whether the correct 2026 rates are used;
• whether the right fee earner grade is shown;
• whether the work was proportionate to the application;
• whether attendance time is reasonable;
• whether preparation time is properly described;
• whether counsel’s fees are supported; and
• whether VAT is correctly included.

A weak N260 can cause avoidable reductions at the hearing.

Precedent S and Electronic Bills

For electronic bills, rate accuracy is essential. A Precedent S bill should be clean, consistent and defensible. Common issues include:

• incorrect fee earner grades;
• inconsistent rates;
• wrong location band;
• changes in rate not explained;
• duplicated fee earner names;
• vague descriptions;
• excessive senior input;
• incorrect phase coding;
• administrative work charged at solicitor rates; and
• failure to separate costs by phase.

The 2026 GHR should be built into the bill properly. If the data is messy, the paying party will find the weakness quickly.

Practical Checklist Before Serving a Bill

Before serving a bill using the 2026 GHR, claimant firms should check:

• Have the 2026 rates been applied from the correct date?
• Is the correct location band used?
• Is each fee earner correctly graded?
• Is fee earner experience recorded?
• Are any above-GHR rates justified?
• Has senior time been limited to appropriate work?
• Has routine work been delegated properly?
• Are telephone calls properly described?
• Are review entries specific?
• Are disbursements supported?
• Is the bill proportionate to the issues?
• Does the narrative explain complexity or delay?
• Are any defendant conduct points included?
• Is the retainer consistent with the rates claimed?
• Is Precedent S accurate where required?
• Are N260 rates updated for summary assessment?
• Are Points of Dispute likely to attack grade or rate?
• Is there a clear answer ready?

This checklist should be completed before service, not after the paying party has already raised objections.

Common Mistakes to Avoid

Mistake 1: Treating GHR as automatic recovery

GHR helps, but it does not guarantee recovery. The work still has to be reasonable and proportionate.

Mistake 2: Using the right rate but the wrong grade

A Grade B rate will not survive if the fee earner is not properly Grade B.

Mistake 3: Letting senior fee earners do routine work

This creates easy reductions, even where the senior rate itself is correct.

Mistake 4: Failing to explain above-GHR rates

Above-GHR claims need evidence and context.

Mistake 5: Ignoring proportionality

A bill can use correct rates and still be reduced if the overall costs are disproportionate.

Mistake 6: Using outdated rates

If the file includes work after 1 January 2026, make sure the correct rates are considered.

Mistake 7: Poor fee earner descriptions

Do not leave the paying party to guess who did the work and why their rate is justified.

So, What Should Claimant Firms Do With the 2026 GHR?

Claimant firms should use the 2026 GHR as a strong starting point, but not as a complete answer. The best approach is:

• claim the correct rate;
• use the correct grade;
• allocate work sensibly;
• explain the file properly;
• evidence fee earner experience;
• justify any above-GHR rate;
• address proportionality;
• prepare for Points of Dispute; and
• keep the bill clean, accurate and assessment-ready.

The firms that recover well are not simply the firms that know the table. They are the firms that know how to present the work.

How DMD Costs Can Help

DMD Costs works with claimant solicitor firms on standard-basis costs recovery. We can assist with:

• bills of costs;
• Precedent S electronic bills;
• N260 schedules;
• Points of Dispute;
• Replies;
• hourly rate disputes;
• fee earner grade challenges;
• proportionality arguments;
• Housing Disrepair costs;
• MoD NIHL costs;
• clinical negligence costs;
• costs-only proceedings; and
• settlement-led negotiation.

If your bill is likely to face a rate challenge, send us the file before service. We can review the rates, grades and presentation so the bill is built properly from the start.