In depth: Law Society Commercial Litigation Conference

Where do solicitors go wrong over bills? At the Law Society’s commercial litigation conference last week, veteran costs barrister Andrew Hogan of Hailsham Chambers pointed to disputes between lawyers and their own clients – as opposed to costs disputes with litigation opponents – as the biggest problem area. Solicitors will often fail to see a costs dispute with their client coming ‘until it hits you like a truck’, he said. Yet all the solicitor/own client costs disputes he has advised on over the years have shared certain similarities. 

‘Without exception, they have involved a breakdown in client care,’ he remarked. ‘Often the costs [dispute] is a proxy for something else; disappointment in the litigation, or maybe a breakdown in the relationship. And there are so many moving parts where things can go wrong.’

One problem is that firms use retainers copied from previous matters and which contain inappropriate or contradictory terms. ‘Often the retainer resembles a coral reef – it’s something that has been adjusted, added to, but nothing ever taken away,’ said Hogan. Meanwhile, costs estimates are treated ‘as a sort of file-and-forget exercise’ done in very broad-brush terms at the start of the litigation, with clients understandably irked when the final bill comes in at twice the original figure.

Costs budgeting, which should in theory add more finesse to the exercise of estimating costs, tends to be treated as something that does not concern the client; while proportionality is seen as ‘an airy-fairy principle’ not relevant to the framework governing solicitor and client costs. ‘But proportionality matters tremendously in relation to your professional duties, and making sure that the client knows whether the game is worth the candle,’ explained Hogan.

Many solicitor/own client costs disputes have been driven by disrupter firms whose business model is based on challenging solicitors’ bills, he noted. ‘A lot of the noise has been in the personal injury space, [but] my own perception is that a whole raft of challenges are now developing in the space of family costs’. 

At a session on product liability, law commissioner Solène Rowan explained the Law Commission’s initial proposals for reform of product liability law, published in a new consultation that runs until 14 January. The commission will analyse responses and lay a final report before parliament, which may contain a draft bill. 

'Often the retainer resembles a coral reef – it’s something that has been adjusted, added to, but nothing ever taken away'

Andrew Hogan, Hailsham Chambers

Over the 60 years since the commission was established, around two-thirds of its recommendations have been adopted by government. 

Key elements of the initial proposals include extending liability to online marketplaces, and expanding the definition of ‘product’ to encompass software and other technologies. The proposals also address the liability position where a product requires ongoing software updates. 

Rowan added that the commission has also provisionally proposed clarifying compensation for psychiatric harm. ‘We focused especially on psychiatric harm because we expect this type of harm to arise more frequently in connection with digital technologies; we expect that perhaps novel forms of psychiatric harm will develop,’ she explained.

While the commission’s proposals bear many similarities to the EU’s 2024 Product Liability Directive, which addresses the same issues, Rowan said the EU legislation had not been used as a blueprint for the commission’s proposals, which were developed independently. 

A table outlining the key points of convergence and divergence between the two has been set out at the end of the commission’s consultation document. 

At a session on commercial litigation trends, Nichola Evans, partner and head of dispute resolution at Manchester commercial firm Kuits, urged solicitors to respond to a forthcoming consultation on the disclosure rules contained in Practice Direction 57AD. Evans explained that the judiciary-led Disclosure Review Working Group (DRWG) is reviewing the rules, with a focus on simplifying the disclosure review document, reframing extended disclosure, and providing a clearer framework to enable the law to catch up with advances in technology-assisted review and AI.

Evans said: ‘We’re looking at [a] consultation at the end of the year which I would encourage all practitioners to take part in, particularly since the majority of the [DRWG] members are not solicitors – so I think it’s really important that the committee hears from those at the coal face.’