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.’
Comments
Costs and Jackson
I doubt that there will be an increase in Solicitor/ own client costs disputes in personal injury matters. Competition will mean that not long after April 2013 firms of Solicitors and marketing agents will be offering 100% compensation guarantees. Also, when additional liabilities were not recoverable (before April 2000) there were no more Solicitor/ client costs disputes than there are now.
What will finish off the majority of Costs Draftsmen (under their various names) will be fixed costs in the fast track, which I understand will not be implemented in April 2013 due to a lack of data and figures (which was the problem the judiciary had last time they tried to introduce fixed costs in the fast track).
Competition will abolish success fees
"Four in 10 predicted that competition between firms would drive down the level of success fees."
And the other six in 10 can contemplate commercial suicide...
competition will abolish success fees
Not if for once as a profession we stick together and don't set out to cut each others throats - but I'm not holding my breath
They hope!
I agree, with the first poster. I doubt there will be more disputes between Solicitor/client over costs because of the LASPO reforms. Also why would someone go to a Cost Lawyer over this when they could go to a Lawyer as often the dispute will involve more than just costs and include professional negligence.
Overall Cost Lawyers are staring down the barrel in 2012.
Every solicitor in litigation
Every solicitor in litigation should do their own bills, and should deal with the costs matters that arise on their own cases. Indeed, without getting the experience of going through the process and knowing what you can charge for and what you can't get away with, how can you maximise cost recovery from your files?
Costs rules and detailed assessment procedures are arcane, on the whole pointless, and about as easy to comprehend as Cantonese. But the underlying issues are quite straightforward and given that they touch on everything that one does, I think that they should be given much more prominence in a fee earner's repertoire.
Costs
I agree with DomcCoop entirely - fee earners in Solicitor's offices have become too specialised over recent years and often fail to see the bigger picture when it comes to costs (and, significantly, their own profitability).
However, another interesting point is that the out of work Costs Lawyers will make the most fantastic fee earners given their usually high understanding of procedure and, of course, costs. The future is still very bright for Costs Lawyers.