The fees of external costs draftsmen are profit costs and not disbursements, and so solicitors can charge a success fee on them, the Court of Appeal ruled last month.


In Crane v Canons Leisure Centre [2007] EWCA Civ 1352, the court held by majority that the work done by Costings Ltd for trade union law firm Rowley Ashworth was chargeable as part of the firm's base costs.



Lady Justice Hallett said: 'The work done by Costings was undoubtedly solicitors' work. It was the type of work Rowley Ashworth were retained to do. Rowley Ashworth may have chosen to delegate their work, but they never relinquished control of it and responsibility for it.'



Lord Justice Maurice Kay dissented, saying it was unjust to make the paying party 'pay a success fee to and for the benefit of the solicitor when the solicitor has chosen not to do the work in question but to instruct someone else to do it'.



The court also ruled that there was 'no reason of principle' to have a lower success fee for costs proceedings than that applicable to the main action.



Lord Justice Kay added a postscript in which he said 'the time may now be approaching when the working of the [conditional fee] system is ripe for an in-depth review so that there can be ascertained the extent to which the system is enhancing or impeding access to justice and at what financial cost'.



Wendy Popplewell, chairwoman of the Association of Law Costs Draftsmen, welcomed the clarity provided by the ruling. 'We also see it as a further step to validating our claim that costs draftsmen are bona fide fee-earners performing solicitors' work,' she said.



Meanwhile, the Senior Costs Judge, Peter Hurst, has announced an in?terim 4% rise in the guideline hourly rates while the advisory committee on civil costs conducts research into the rates, with a view to issuing a completely new set by mid-2008.



See also law reports



Neil Rose