The government should curb Lord Justice Jackson’s recommendation to expand the use of fixed recoverable costs, limiting them only to the fast-track, according to a survey of costs lawyers.
Some 155 members responded to the poll, carried out by the Association of Costs Lawyers (ACL), which also found that solicitors are at risk of significant financial losses by not updating their budgets.
Just over half (52%) of respondents said it was ‘fair enough’ to extend fixed costs across the fast-track, but that they should go no further.
This was in part because, as the judge himself acknowledged, the costs budgeting process has improved significantly over the past 18 months. Some 57% said his optimism matched their own experience.
However, the survey also showed that solicitors need to up their game. Just 5% of costs lawyers said their clients always stuck to their budgets; 65% said they sometimes went over, while 29% had clients who always exceeded their budgets.
The ACL said this was a major problem because, earlier this year, the Court of Appeal said that a costs judge on detailed assessment should only depart from the approved or agreed budget if there is “good reason” to do so.
It also meant solicitors should be updating their budgets if required as the case progresses, the ACL said, and the survey indicated that they still have a long way to go. Just 19% of costs lawyers said the number of applications to update a budget was increasing, while 38% said they had never seen one.
The survey said there was growing awareness among solicitors that the new electronic format of the bill of costs becomes compulsory next April, but 40% costs lawyers thought that, however good it may be, solicitors were not interested in the shift.
Most costs lawyers viewed government reform as the main threat to the future of the profession. The large majority thought they would weather the Jackson reforms, even if some would take a hit initially.
ACL chairman Iain Stark said: “Costs lawyers know better than anyone that budgeting is becoming embedded in civil litigation and it will only keep on improving.
“It is true that many solicitors still need guidance but, with judges now far more confident in exercising their costs management powers, we are positive that it will make a real difference in controlling costs.
“That being the case, do we really need the upheaval and satellite litigation that fixed costs would cause as lawyers push for the highest fee available?
“They work on the fast-track because solicitors can cope with the ‘swings and roundabouts’ of having some cases that require more work and others that require less than the fixed cost allows. However, that calculation does not work with more complex cases.
“Costs lawyers have an interest in maintaining budgeting, of course, but as a profession we have worked hard to make the process work and, while there is still some way to go, we are proud of what we have achieved.”
Meanwhile, Simon Murray, head of costs services at DWF, has become the first costs lawyer to become a registered foreign lawyer with the Law Society of Scotland after the latter authorised the England and Wales regulator, the Costs Lawyer Standards Board, as an approved regulator.
The terms of the approved means that a costs lawyer who wanted to become a registered foreign lawyer would have to satisfy the Law Society of Scotland that they have at least five years in aggregate of qualifying employment experience, and a certificate of good standing from the board.