Specialist costs lawyers are more certain than ever that the post-Jackson era will see an increase in costs disputes between solicitors and their clients, along with lawyers focusing much more on straightforward cases, new research has shown.
The second annual survey of members of the Association of Costs Lawyers (ACL) has also found them in a noticeably more optimistic mood about their own future than they were this time last year.
The fact that clients represented under a conditional fee agreement now have to pay their lawyer’s success fee from their damages led 80% of the 128 ACL members polled to see more solicitor/own client disputes as a major impact of the Jackson reforms, up from 69% last year.
The benefit of a year to understand the shape of the new market led 71% to predict that the reforms will discourage solicitors from taking on less straightforward cases (54% in 2012) and 48% to say that clients will be discouraged from bringing cases (31% in 2012). Nearly half (47%) thought the changes tilt the playing field in favour of defendants (42% in 2012).
While last year 42% of costs lawyers said the Jackson reforms would lead to them reducing their practices, this number has fallen to 20% in 2013, with a greater number (28%) bullishly predicting that their practices will grow as a result.
Almost a quarter (24%) said they would take on more staff, while the percentage of those planning to reduce staff numbers fell from 18% to 11%.
More than half (55%) said they intend to change their practices as a result of either the Jackson or legal aid reforms, with diversification into other areas, increased sales and marketing and, for a fifth, more advocacy key elements of their plans.
Nearly half of costs lawyers (47%) have seen demand for costs budgeting increase over the last 12 months, and 91% expected it to increase in the next year, most by a significant amount.
The failure to keep thorough records was cited as the most common mistake made by solicitors when dealing with costs, followed by “thinking they can do it themselves”, using costs lawyers only when things have gone wrong and using unqualified costs draftsmen. More than half (55%) said they had experience of an unqualified costs draftsman inflating their bills. Poor understanding of the law was the main difficulty encountered with unqualified people.
ACL chairman Murray Heining said: “It is inevitable that solicitor/own client disputes will re-emerge and solicitors need to get used once more to ensuring that they have their records in order to counter any challenge they may receive.
“Costs lawyers are a resilient group of people who have proven the value they give their clients. Now that the ‘shock’ of the Jackson reforms has passed, many can see a positive future where they continue to make an important contribution of the working of the justice system.
“The need for expert advice is greater than ever as solicitors get to grips with the Jackson reforms, and so it continues to mystify me that they would put recovery of their costs in the hands of unqualified and unregulated people who do not know the law and only end up damaging their case and costing everyone more.”