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Costs lawyers “see opportunities” in helping clients challenge bills

Green: Costs lawyers are the answer to the problem

A majority of costs lawyers think there is a business opportunity in helping unhappy clients challenge their solicitors’ bills, a survey has found.

The poll also showed continuing signs of improvement in solicitors sticking to their budgets, although many continue to rack up costs in excess of what the court has said they should spend.

A total of 126 Costs Lawyers responded to the poll, carried out by the Association of Costs Lawyers (ACL) at its annual conference earlier in the summer.

There have been a number of high-profile cases in the past two years that have seen successful challenges to solicitors’ bills, particularly in personal injury cases – culminating in April’s Court of Appeal ruling in Herbert v HH Law.

Some 59% of respondents to the survey said they saw opportunities in acting directly for clients in challenging bills. Fewer than half that number (28%) said they did not, while the rest were not sure.

The ACL pointed out that, as regulated lawyers with rights to conduct litigation and of audience, costs lawyers were able to act directly for clients on these cases.

One in six costs lawyers (17%) said the solicitors they dealt with now stick to their budgets, up from 10% last year and just 5% in 2017. However, 22% said solicitors always went over what was budgeted, and a further 54% said they sometimes went over.

Some 22% also reported more applications to revise budgets – but the same proportion said they had still never seen one.

The survey showed that costs lawyers were becoming more comfortable with the electronic bill of costs – 57% said they were getting used to it, compared to 41% in 2018 – but 36% still thought it was making things worse, and 24% described it as a “hard sell” to solicitors.

A mere 5% said solicitors were getting the hang of the electronic bill.

Some 72% of costs lawyers said the electronic bill had increased the costs of assessment. The ACL said this was “unsurprising as users get to grips with it”.

The survey was carried out before the recent Court of Appeal ruling [1] providing guidance on the proportionality test, with 57% saying that up until now “everyone has their own approach” to the test and 59% noting that it depended on which judge you were before.

Nearly half (47%) also called for a comprehensive review of the costs provisions in the Solicitors Act 1974.

The survey showed too that the costs lawyer profession is in a largely positive state: 41% reported that their practice/department had grown over the previous year, 37% said it had stayed the same, and 16% (down from 27% last year) said it had shrunk. This meant that 27% of firms took on more staff.

However, the prospect of the fixed recoverable costs regime being expanded to cases worth up to £100,000 was a major shadow on the horizon for many, and 55% said it would be bad news from an access to justice perspective as well.

In a case last year, a costs judge chided a firm of solicitors for not treating the costs lawyer on the other side with “the same professional courtesy as a solicitor would expect”. Three-quarters (76%) of the costs lawyers surveyed said solicitors did treat them with appropriate professional respect and courtesy, but 21% said they did not.

Claire Green, who recently took over as ACL chair for a three-year term, said: “It is now six years since the introduction of LASPO and we are still seeing personal injury solicitors struggling with having to deduct their success fee from clients’ damages, and other solicitors displaying sloppiness in some of their billing practices.

“But while there are opportunities for costs lawyers in helping clients who feel they have been overcharged, we are also the answer to the problem – if law firms used a costs lawyer to ensure that their billing was on a solid footing in the first place, challenges would not get off the ground.

“The message about the need to stick to or revise budgets is getting through too slowly, and solicitors are putting themselves at risk if they have to take the route of convincing the judge on assessment that they had a ‘good reason’ to exceed the budget. This task is not proving easy in many cases, leaving solicitors out of pocket.

“Finally, it is pleasing that the majority of our members’ businesses are in robust shape. This survey shows the continuing and important role that costs lawyers play in the legal market, and I am confident of our members’ ability to adapt.”