Master of the rolls Lord Neuberger has warned that alternative business structures may sound the ‘death knell’ for hourly billing.
Speaking at the Association of Costs Lawyers conference today, Neuberger said clients were increasingly put off by hourly billing and attracted by fixed fees. As well as ABSs, he said the economic climate and the advance of legal comparison websites make fixed - and mostly lower - fees inevitable.
But Neuberger told lawyers they should not fear for their business or expect worse pay as a result of changes to the market.
‘If litigation is cheaper, elementary economics suggests that there will be more of it,’ he said.
‘Rather than charging high in a few cases, and driving away those with valid claims from the courts, lawyers should be able to charge realistic fees, and encourage many more clients to instruct them to fight their case. So, significantly lower legal costs should not lead to less money for lawyers, but it should lead to better value for money, and should give to our citizens what so many are currently denied, namely access to justice.’
Neuberger claimed that excess legal costs had ‘disfigured’ the civil justice system for too long and praised Lord Justice Jackson for the ‘boldest attempt to cure our costs problem yet attempted’. If the Jackson proposals fail to reduce costs, he said, the UK would have to adopt either a US-style costs rule or German-style fixed-costs regime.
Neuberger also revealed that all judges will be sent for a day’s training to accustom themselves to the new era of costs post-Jackson. ‘I appreciate you will not get judges to have a brilliant understanding of costs management from one day’s training,’ he said.
‘Judges will make mistakes and not get the point but the only way they will learn is by doing that.’
- Read Rachel Rothwell's blog on fixed fees