Third time lucky?

R & Co was the third firm the complainant, Ms A, had instructed in connection with a serious personal injury claim following a road accident.

Proceedings had been started by one of R & Co's predecessors.The case progressed towards trial satisfactorily.

A trial date was set and about three weeks beforehand a conference was arranged with counsel.

By then there had been a substantial payment into court.The payment-in was discussed at the conference, with R & Co indicating that costs would be in the region of 3,000 - 4,000.

On that basis, Ms A instructed R & Co that she would accept a settlement that gave her an additional 6,500 plus costs.Ms A was legally aided.

After the Conference, R & Co wrote to the Legal Aid Board saying that Ms A's costs would not exceed 5,000 - 6,000.Ultimately, when the costs of all three firms who had acted for Ms A were added together, they amounted to some 35,000.

Only 22,000 was recoverable from the defendant, leaving Ms A to meet the shortfall of 13,000.

Not surprisingly, it was at that point that Ms A raised her complaint.In its defence, R & Co argued that the estimate given at conference was meant to represent only its own costs and the statement was made subject to the amount to be determined on any future taxation.The OSS was not impressed.

R & Co's own costs were 29,000 including VAT and disbursements.

It was considered that the firm had seriously underestimated its own costs, with no excuse for so doing, and had signally failed to properly advise Ms A as to her potential costs liability when she was considering the offer of settlement that was made.The net result was that, although the solicitors had been successful in negotiating the additional 6,500 that Ms A had said she required, she was still 7,500 worse off than when the offer was being considered and found inadequate.The OSS ordered the solicitors to reduce their profit costs by 2,500 and to pay 500 compensation to Ms A.Both parties appealed, but the original decision was upheld.

The case is a reminder to solicitors to arm themselves with accurate costs information when terms of settlement are being discussed, or when attending trial in order to cater for the contingency to settle the matter at the door of the court.X Every case before the compliance and supervision committee is decided on its individual facts.

These case studies are for illustration only and should not be treated as precedents.