Conduct and service

Costs/risk benefitIt is a frequent occurrence that, when parties to litigation attend court for the scheduled hearing of the claim, negotiations take place while the parties are waiting for the case to be called.

These frequently result in the matter being compromised.It is also unfortunate that, all too often, the settlement terms give rise to complaint when the client realises, when the terms of the settlement are given effect, what they actually amount to.Usually, but not always, the problem revolves around the costs that the client has to meet from the agreed award.

That, in turn, results from solicitors going to court without being armed with any real idea of their own accumulated costs.

This then seems to frequently result in an unrealistically low estimate being given when liability for costs is discussed.

This has the knock-on effect that too low a figure is accepted as a costs contribution from the other side, leaving the client to make up the unexpected difference.

Sometimes, to make matters yet worse, other factors are also involved.

This was the case with Mrs A, whose claim for damages in a personal injury case came before the court in late 1998.

Negotiations took place at the court door, with both counsel and solicitors forboth parties involved.

During the negotiations various factors were considered, including the potential payment to the Compensation Recovery Unit and interest on a sum paid into court.

Eventually a settlement was reached, and a Consent Order drawn up and approved by the court.Only when the Order was put into effect did Mrs A's solicitors remember that she had a potential liability to repay a loan to her employers.

Also, when the solicitors had their bill of costs drawn, it turned out to be almost double the figure that had been quoted by them during the negotiations.Mrs A found herself going to receive 6,500 less than she thought she would get when she gave her approval to the settlement which had been proposed at court.

Not surprisingly, she was not happy and complained about the lack of accurate advice.Her complaint was upheld by the OSS, which ordered the solicitors to pay her compensation for the shock and distress caused.

l 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.