Last November, The Association of Costs Lawyers (ACL) held its first in-person conference since the onset of the pandemic. Whilst it was of course nice to actually converse with colleagues without them being on a screen, it also gave costs lawyers the opportunity to exchange views on the directions of costs law and also do a bit of crystal ball gazing into the future. Both were demonstrated by the ACL’s survey of conference delegates.
The survey’s findings would not be a surprise to your average costs lawyer (if such a thing exists!) but should prove interesting and perhaps indicative of future developments for those who use our services.
Firstly, to the chagrin of personal injury lawyers the land over, costs lawyers are seeing an increase in the number solicitor/own client disputes; 52% of the respondents reported a rise in instructions in these disputes. This is undoubtedly a growth industry for many costs lawyers acting for litigants who dispute their ex-solicitor deducting their charges from compensation awarded. No doubt these disputes will continue unabated, at least until the Court of Appeal rules in Belsner v Cam Legal Services Ltd at some point this year. Any lawyer wishing to make deductions for success fees or unrecovered costs from their client’s damages should be fully versed in the mechanics of ‘informed consent’ in the not too distant future.
To prove that costs lawyers are far from a self-preserving bunch, respondents also backed a call from Senior Costs Judge Andrew Gordon-Saker to review the workings of Part 3 of the Solicitors Act 1974 (1974 Act). This is all too often the starting point for many solicitor/client disputes, with lengthy (and expensive) arguments about whether a ‘bill’ is a final bill, an interim bill or merely a request for a payment on account. Whilst a cynic may think this would benefit costs lawyers, 62% of the respondents favoured an urgent review of the 1974 Act.
One question which is always asked of our members is how they see costs management developing in their practices. This is particularly relevant following comments last summer by Master Davison that costs management did not control costs any better than the traditional detailed assessment process.
Next year will see a full decade of costs management. One school of thought argues that the regime has had time to bed in and that solicitors know their budgets once approved and broadly stick to them. If you were of that school of thought, the survey will prove interesting reading. Only 11% of costs lawyers said solicitors always stick to their budgets. Over half stated that they sometimes went over budget and over a fifth said that solicitors always go over budget. The knock-on effects, either to the solicitor’s cash flow or to their lay client’s own costs’ liability, are likely to be painful.
These findings are all the more interesting given the comments of Master Davison last summer and the Master of the Rolls at the ACL’s conference. Sir Geoffrey Vos voiced his opinion that “we should undoubtedly take another look” at costs management given the time and costs involved in the process. It may well be that changes to the budgeting regime are on the horizon.
Speaking of that horizon, the one cloud on it for costs lawyers seems to be the expansion of the fixed costs regime to most money cases worth up to £100,000. Over half of ACL’s members fear that they would lose some work as a result, nearly a third predicted that it would take out a large part of their practice. The negative effects of fixed costs are well known to costs lawyers and no doubt the ACL will continue to lobby the government on this expansion.
The current picture, however, is more optimistic. Nearly half of the respondents reported being busier than ever in terms of their current practices. Costs law is indeed getting more complicated, be it budgeting between the parties or solicitor/client disputes. In turn, solicitors are facing ever increasing financial pressures and must maximise their costs recovery to remain profitable. It is thus no surprise that costs lawyers are reporting record workloads. It will not surprise the reader to hear me recommend that they rely upon a costs lawyer’s expertise.
