Proposals are underway to revamp the much maligned Bill of Costs. Whilst not an accusation leveled at our often praised bills, it is often the case that there is a distinct absence of detail within bills and Lord Jackson has claimed that the production of bills of costs should be reduced to the push of a button, thus generating pristine bills full of detail that are readily viewable, adaptable and alterable so all parties can change them to see varying outcomes. This will ultimately lead to reduced time preparing the bills and reduced time adding up the bills following a detailed assessment.
At CLC, we are already able to do both the readily amendable and instant calculations as proven at a recent detailed assessment where half a million pounds worth of costs across a number of bills were ready by the time the Judge had made his order. But this misses a trick. The fact that the Costs Lawyer has taken the time to read the file and prepare the bill knowing what he can and cannot reasonably expect to recover is removed by Jackson’s proposals, and in addition, time spent preparing and considering is increased to reflect the fact the Costs Lawyer is less familiar with the case.
As such, it is highly debatable whether what Jackson aims to achieve will be achieved.
Not a week goes by when referral fees are not in the spot light. Jack Straw continues to bang his drum about the same and demands fixed fees be reduced in light of the savings law firms will make when they no longer have to pay for them. Yet he should be looking closer to home: It has emerged that the Labour Party are reliant on referral fees also. See http://www.dailymail.co.uk/news/article-2049903/Labour-cash-ambulance-chasers-win-fee-lawyer-links.html
What no one acknowledges is the fact that a certain amount of work/fees have to be incurred and attributed to each case/client in order to get the client. Whilst the savvy high street practice may be able to keep this low, and be self sufficient from local trade, large business park firms with a large number of litigation executives need to be fed a large number of cases to remain profitable and hence need a large market spend. This may be by way of buying work in, or advertising. Either way, it has to be done.
Likewise, what will be the cost of patrolling and enforcing the referral fee ban? The solution is allow moderate/capped referral fees, as opposed to the £1000 some people have quoted my firm.
Following the mammoth judgement that was Motto v Trafigura by Senior Costs Master Hurst, permission to appeal certain issues was given. These were:
ii) Vetting costs;
iii) Pre-Action Protocol;
iv) Medical reports;
v) Abandoned claims;
vi) Settlement and distribution;
vii) Cost of funding;
viii) Success fee;
ix) ATE premium.
The interesting and useful findings that have general application are as follows:
ii) Vetting Costs – subject to a valid retainer being in place to cover the work, and any arguments over proportionality, reasonableness and necessity, the work done in vetting the clients is recoverable.
With regards vii) costs of funding, the Court of Appeal have ruled:
“The time, expertise and effort devoted by solicitors to identifying a potential claimant, and negotiating the terms on which they are to be engaged by the claimant, in connection with litigation, cannot, in my view, be properly described as an item incurred by the client for the purposes of the litigation. Until the CFA is signed, the potential claimant is not merely not a claimant: he is not a client. When advising a potential claimant on the terms and effect of the CFA, the solicitors are acting for themselves, not for the potential claimant: the solicitors are negotiating with him as a prospective client, not for him as an actual client.”
“It seems to me that the expenses of getting business, whether advertising to the public as potential clients, making a presentation to a potential client, or discussing a possible instruction with a potential client, should not normally be treated as attributable to, and payable by, the ultimate client or clients. Rather, such expenses should generally be treated as part of a solicitor’s general overheads or expenses, which can be taken into account when assessing appropriate levels of charging, such as hourly rates.”
“the cost incurred in having such discussions and taking such instructions was not so much a cost of the litigation as a cost which was collateral to the litigation, being a cost incurred to ensure that the claimants were not at risk on costs.”
The remainder of the judgement is largely case sensitive and we await the Court of Appeal’s findings on interest
Catching up on a backlog of journals, one alarming thing springs to mind: The next wave of satellite litigation is coming!
After the revocation of the CFA Regulations 2000 and introduction of predictable costs under CPR 45 II etc one could see the calming of the storm that has raged for several years. The thought of arguing over 6 minutes here and there was in sight. And then came Jackson and everything was churned up again.
What is disturbing is that the names of people involved in the one way costs shifting debate are by and large people who will benefit from the whole raft of disputes that will be created. Furthermore no costs lawyers were allowed on the board despite representations to the effect that they should.