Solicitors continue to rack up costs in excess of court-approved budgets, but there are signs of improvement, according to the survey of my fellow costs lawyers.
It also showed that judges have generally been keen to get on with using the electronic bill of costs, while the profession is starting to get used to it too.
A total of 146 costs lawyers responded to the poll, carried out by the Association of Costs Lawyers (ACL) at November’s annual conference.
One in ten said solicitors have got better at sticking to their budgets, but 23% said solicitors always went over what was budgeted, and a further 53% said they sometimes went over. There is nothing to celebrate here, but the figures are all improvements on the same survey in 2017 (where the figures were 5%, 29% and 65% respectively).
It is obviously good that the message about budgeting is getting through, but nearly six years on from its introduction, it is disappointing that it has taken so long. You would hope that solicitors would take more care with budgets and seek to revise them when needed, but only 22% reported more applications to revise budgets, although 19% said they had still never seen one (figures that were at least better than the 2017 survey).
The alternative is to rely on the increasingly difficult task of convincing the judge on assessment that they had a “good reason” not to stick to the budget. Either those firms not revising know what they are doing, which is not good business, or don’t, which is even more inexcusable. Or they are lucky enough to have a client that will pay anyway. There are unlikely to be many of those.
This is against the background of Master Davison’s decision in Al-Najar and others v The Cumberland Hotel (London) Ltd, which considered what should amount to a “significant development” justifying a revision.
He said:
“As a matter of policy, it seems to me that the bar for what constitutes a significant development should not be set too high because, otherwise, parties preparing a budget would always err on the side of caution by making over-generous (to them) assessments of what was to be anticipated.”
Let us hope this message gets through.
Three lessons can be learned from the principle:
- Do not make overly generous assessments of the work to be undertaken when preparing the initial budget.
- Always include clear assumptions that can be distinguished against as necessary.
- No longer be overly cautious about making an application to revise as necessary.
It goes without saying that any application must be foreshadowed in correspondence with the hope that pragmatic parties can agree the position without the need to trouble the court. Perhaps that is a good reason why the survey results seem low.
In other results, four in ten costs lawyers (41%) said they were now getting used to the electronic bill of costs (with several saying they prefer the ACL’s own version), although a similar number still think it is making things worse, and 23% described it as a “hard sell” to solicitors.
While most costs lawyers were ready when the electronic bill came into force last April, 48% said the solicitors they dealt with were not. More positively, 43% of costs lawyers said all or some of their clients were ready.
Nevertheless, only 6% of costs lawyers reported that solicitors had transitioned easily to the new regime. Some 42% said solicitors had asked their costs lawyers to sort it all out, while 23% said their solicitors were just putting off dealing with it.
Although respondents said the judiciary was largely not ready for the introduction of the electronic bill either, 54% said judges were now “keen to get going” with it, compared to 24% who thought judges were going to waive the use of the new bill for as long as they could.
Some 58% of costs lawyers said the electronic bill had increased the costs of assessment, which is unsurprising as users get to grips with it.
We can expect that take-up of the electronic bill of costs may be smoother as parties and judges start to see the benefits of what should be a quicker and more transparent process.
The survey showed too that the costs lawyer profession is in a largely positive state: 42% reported that their practice/department had grown over the previous year, 26% said it had stayed the same, and 27% said it had shrunk. Half said more work came in over the 12 months, and 21% said they took on more staff. A sixth (17%) took on more advocacy work.
The last six years have seen costs practice undergoing very substantial change but I am encouraged that the majority of our members’ businesses are holding up well. It is clear that, with so many other things on their plates, solicitors are turning to our experts to handle their costs issues, and the bond between these two professions remains as strong as ever.
Francis Kendall is a costs lawyer at Kain Knight and vice-chair of the Association of Costs Lawyers.
