We’re Not Done, Yet
During my career as a Costs Draftsman one skill has stood out above all others as a necessity – the ability to adapt to change. Recently the rule makers introduced fixed recoverable costs for nearly all money claims worth up to £100,000.00.
Here at Partners In Costs we hope that Practice Managers at all our client firms have made an estimate of what their firm’s inter partes costs recovery will now be going forwards, compared with their inter partes recovery under the old time based regime, and have concrete business plans in place as to where the money will come from.
From a costs drafting perspective, a huge chunk of familiar work will disappear over the next few years. It is now, once again, time for Costs Draftsmen to adapt to change and familiarise themselves with other avenues of work. Solicitor and own client costs disputes are the obvious candidate. Personal injury and other litigation Solicitors whose income from inter partes costs has reduced under the newly extended fixed recoverable costs regime will find it necessary to charge their own clients increasingly large amounts in order to stay in business – and that change in costs shifting will generate an increasing number of Solicitor and own client costs disputes. We’re not done, yet.
Solicitors must not presume that all costs which cannot be recovered inter partes, are chargeable to their own client. Once inter partes costs have been recovered, there are (at least) two prerequisite hurdles to overcome before the Solicitor can charge their own client for (some of) what remains. Firstly, the retainer between Solicitor and own client must provide for the client to pay costs over and above those costs that are recoverable inter partes and, secondly, the client must have been informed about those irrecoverable costs (see CPR 46.9 and the judgment following in Herbert v HH Law Ltd 2019 EWCA Civ 527).
The advice of Partners In Costs at this time to personal injury and litigation Solicitors is to (1) check your retainers do indeed allow you to charge your own clients costs which cannot be recovered inter partes (paying particular attention to the extension of fixed recoverable costs) and (2) provide an explanation why some costs will not be recoverable inter partes (seeking your client’s informed consent to any items or categories of costs which are unusual). In particular, if your hourly rates are much higher than the Guideline hourly rates, explain to your client why they are so much higher and then ask your client to consent to paying those rates (perhaps you have particular expertise which justifies those higher rates). Similarly, if your Conditional Fee Agreement success fee does not reflect the prospects of winning the case, explain to your client why the success fee is so high and seek their consent to payment of the same regardless (perhaps you have approached success fees on the basis of a case loading model). Fixed recoverable costs create certainty and it should be possible to provide your clients with realistic estimates of what costs it should be possible to recover inter partes and how much they are likely to be asked to pay at the conclusion of the matter (it is a necessity to provide your own clients with accurate and up to date costs information). The importance of your retainer terms, hourly rates, success fees and informed consents should not be glossed over and those will be at the heart of most Solicitor and own client costs disputes.
So, what can Partners In Costs do for our professional clients in terms of Solicitor and own client costs recovery. Principally, we are a firm of Costs Draftsmen who help Claimant personal injury Solicitors (Receiving parties). If any of your former clients seek to dispute your Solicitor and own client charges, we can help with:-
- The first job for us is to review the Receiving Solicitors’ file and calculate how much they can properly charge their own client. There will likely be a range of figures, similar to the range of possible outcomes on an inter partes costs assessment. Hopefully, thereafter, with our help, negotiations should settle the dispute with your former client
- We can advise our Solicitor clients as to what papers ought to be disclosed and what should not
- We can help our Solicitor clients prepare Bills of Costs in readiness for Solicitor and own client assessments, including preparation of the cash account. Smaller disputes, say less than £10,000.00 should, probably, go the Ombudsman. Larger disputes will follow the procedure under the Solicitors Act 1974, which is, unfortunately, a labyrinth.
- We can help with negotiations, preparing Replies to Points of Dispute and we attend hearings
- Our aim, as always, is to help our Claimant Solicitors get paid for a job well done
If you need help, please get in touch
Ian Moxon, Costs Lawyer
30.11.2023