Conduct and service

Costly misconceptions

Complaints to the Office for the Supervision of Solicitors about costs are less frequent than was the case a few years ago, but those that do arise are more often found to be justified.

Nowadays, complaints about costs tend to be centered on lack of information about accumulating costs as the matter, often one involving litigation, progresses.

The costs requirements of practice rule 15 were first put in place because few clients were being given any costs information, particularly in litigation matters where it is often difficult to predict the final costs.

Gradually, most solicitors began to tell clients their hourly charge-out rate.

From that has grown the belief that that is all that has to be done - tell your client your charge-out rate and you've discharged your responsibilities with regard to costs information.

Not so.

That view overlooks another requirement embodied in the Solicitors' Costs Information & Client Care Code 1999.

This is that clients have to be kept abreast of how costs are accumulating.

Practice rule 3(c) states that costs information should be given to a client at the outset of the matter and 'at appropriate stages throughout'.

Additionally, practice rule 6 requires the client to be kept informed about costs as the matter progresses and told the amount of accrued costs at least every six months.

The requirement to confirm to the client the basis upon which he is going to be charged, that is to say, if it is the case that it will be based on an hourly rate, is a different requirement under practice rule 4(f).

However, it is often the requirement to confirm the basis of charge that leads a solicitor to the wrong conclusion.

Witness the case where a client acknowledged she had been told at the outset what the solicitor's charge-out rate was, but had received no additional information and was astonished by the level of the eventual bill.

The solicitors wrongly held that they had fulfilled their obligations.

Their failure cost them 300 in compensation.

This leads to a further point.

In fact there is no need to quote the actual charge-out rate to the client.

To do so without also giving an idea of the number of hours work involved is meaningless.

It can also frighten the client to death, as well as giving the impression that all that money is going into the solicitor's pocket - fostering the 'fat-cat' image.

Far better to try to give an estimate, even if only a rough one, of the costs the client should anticipate and ensure he is kept properly informed about how they are accruing.

Every case before the adjudication panel is decided on its individual facts.

Advice here is for illustration only and should not be treated as a precedent

LawyerlineFacing a service complaint? Need advice on how to handle it? Contact Mike Frith at LAWYERLINE, the support service offered by the Office for the Supervision of Solicitors, tel: 0870 606 2588.