Cost disputes set to soar post-Jackson, survey predicts
Costs disputes between solicitors and their clients will become more common once the Jackson reforms are implemented, according to a survey of specialist costs lawyers published today.
In a poll of 137 costs lawyers, 69% (95) expected to see an increase in disputes, once the recoverability of success fees is scrapped next April.
The change in the Legal Aid, Sentencing and Punishment of Offenders Act 2012, following the recommendations from Lord Justice Jackson’s report will mean that clients will have to pay lawyers’ success fees out of the monies awarded in damages. It will for the first time in over a decade give clients litigating under conditional fee agreements a direct interest in the amount their lawyers charge.
Some 54% of respondents predicted the rule changes would discourage solicitors from taking on more complex cases, while 42% said they would tilt the playing field in favour of defendants.
Four in 10 predicted that competition between firms would drive down the level of success fees.
The survey, of members of the Costs Lawyers Association conducted at its annual conference last month, also showed that nearly half (47%) are planning to restructure their practices as a result of the Jackson reforms and legal aid cuts.
Of those, the majority (82%) indicated that they would diversify into other practice areas, while 46% intend to increase their marketing and 29% want to do more advocacy.
ACL chair Ian Stark said: ‘The Jackson reforms will challenge the business models of solicitors and costs lawyers alike.’
He said: ‘It is inevitable that solicitor/own client disputes will re-emerge post-LASPO, while the judiciary is emphasising how central costs management will be in the future, with a recent case proving that the courts will reject an overspend on an agreed budget.’