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Fixed costs and the Bar

It is accepted by solicitors and the Bar alike that, as fixed fees are introduced, solicitors become more reluctant to instruct counsel, on the basis that they feel that they are spending their own money, rather than incurring a disbursement, which is then recoverable from the other side in the event of success.

Give solicitors a fixed fee of say £3,000 with counsel’s fee as a recoverable disbursement of, say, £750 and counsel will be instructed, but pay an inclusive fee of £4,000 and the solicitors will do the work themselves, even though they would be £250 better off than under the first scheme.

This has for long been the case where costs are not recoverable, for example in employment tribunals, and also in the existing fixed costs regime, covering most personal injury claims up to £25,000.

This current fixed costs scheme provides for a legal spend, with no separate fee for counsel, with one minor exception worth only £150. Solicitors are free to instruct counsel, but that is regarded as an office overhead in the same way as employing a solicitor, rather than a disbursement.

The advocacy fee is a free standing fixed extra fee in all fast track cases, not just personal injury work, and that is payable whether the advocacy is conducted by a solicitor or barrister or legal executive.

It makes sense. If counsel’s fees were an add-on for anything and everything, then some solicitors would pocket the fixed fee but instruct counsel to deal with the whole case.

Jackson LJ’s initial view a year ago was that the same principle should apply in all fixed cost civil litigation with a potential value of up to £250,000 damages.

While seeing the logic of that, it would seriously threaten the existence of the junior civil Bar. I believe that the maintenance of an independent Bar is of crucial importance, not only to the Bar itself, but to small and medium sized solicitors’ firms that often need recourse to the Bar.

Having an independent and sustainable Bar also sustains a nationwide network of solicitors able to carry out litigation work.

It looks increasingly likely that there will be a new intermediate track to sit between the fast track and the multi-track and that fixed recoverable costs will not spread to the multi-track at the moment, but will cover all intermediate track work.

It is likely that that intermediate track will cover work valued at between £25,000 and £100,000.

Consideration should be given to specific fixed fees for specific activities, generally carried out by counsel, but possibly a specialist solicitor, for work in that intermediate track. Those specific tasks could include:

I am anticipating that advocacy fees will remain separate and fixed, whoever carries out the advocacy.

Advocacy itself throws up a further issue for counsel in that, at present, no advocacy fee or preparation for advocacy fee is payable unless the matter goes to trial, or is settled on the day of trial (see Mendes v Hochtief (UK) Construction Limited).

Work done by a solicitor is effectively covered in the post-listing pre-trial stage fixed costs, but counsel gets nothing.

I suggest that we revert to a scheme similar to that which existed when we had fixed recoverable success fees. I propose:

  • 25% of the fixed advocacy fee if the matter settles between 21 days and 42 days before trial.
  • 50% of the fee if it settles between seven days and 21 days before trial.
  • 75% of the fee if it settles within seven days of trial.

That is fair to counsel and encourages relatively early instruction of counsel by solicitors, and if there is to be settlement then it encourages it earlier rather than later.

I am sure that in particular areas of civil litigation there are other items to be considered, but the key is to ensure that the fee is fixed and certain in fixed costs cases, so as to eliminate the cost and delay of budgets, bills and assessments, which insofar as possible should be consigned to history as unnecessary parasitic costs which make the litigation process more expensive than it needs to be.

Underwoods Solicitors Kerry Underwood

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