Law Society notices

Policy statement of the Law Society's compliance board - recovering the costs of investigations

1.

This is a statement of policy and should not be read as if it constitutes closely defined rules.

A basic principle is that solicitors who give rise to complaints or investigations which result in an adverse adjudication against them are liable to be directed to pay costs to the Law Society.

2.

A solicitor or firm will normally be directed to pay to the Society the costs of dealing with the matter where:

l The solicitor has been found to have committed professional misconduct or failed to comply with any requirement of the Solicitors Act 1974 (as amended) or any professional rules; or,

l The solicitor or his firm has been found to have provided professional services which were not of the quality which it is reasonable to expect of them as a solicitor, and the solicitor or firm has been ordered to take one or more of the steps set out in paragraph 2, schedule 1A to the Solicitors Act 1974 (as amended).

3.

In the case of complaints about the provision of an inadequate professional service (IPS), costs orders will generally be against the firm rather than the individual solicitor.

4.

The costs directed will normally be set amounts ('fixed costs' or 'fixed review costs') calculated by the Society as representing 75% of the average cost of dealing with cases which proceed to adjudication or review respectively.

A direction to pay costs on adjudication will always be discretionary and is subject to the paragraph below.

5.

There is a discretion on adjudication (or on review of adjudication) to direct that the solicitor or firm shall pay less than the fixed costs or fixed review costs if it is unfair in all the circumstances to require them to pay the fixed cost.

Examples of circumstances where the discretion might be exercised are indicated below.

6.

If a decision is subject to review:

l The costs direction will cease to have effect if, following review, the solicitor is no longer subject to findings as set out in paragraph 2 above.

l However, if the decision on review is that the solicitor is subject to findings as set out in paragraph 2, the solicitor may, in the discretion of the adjudicators, be directed to pay the additional costs incurred, known as fixed review costs; if the solicitor has sought review of a costs direction which is less than the fixed costs, adjudicators may, in disagreeing with the original decision as to costs, increase or decrease the amount directed to be paid.

7.

The level of fixed costs and fixed review costs will be set by the compliance board and will remain effective until varied by the compliance board.

8.

Solicitors who seek to argue that they should not be directed to pay part or all of the costs should direct their representations to substantive issues (as exemplified below).

Adjudicators will not review the calculation of the fixed costs or fixed review costs, and any alleged unfairness will be dealt with on the facts.

9.

Solicitors and/or their firms will become liable for costs relating to the investigation of professional conduct complaints received after 1 February 2002 and for costs relating to the investigation of IPS complaints received after 1 May 2002.

Circumstances where the discretion might be exercised:

l Whether a solicitor or firm should be directed to pay the full amount of fixed costs or fixed review costs is in the discretion of adjudicators;

l Examples where adjudicators might decide that the payment of costs should either not be directed at all, or reduced, include: where an investigation was particularly straightforward and the amount directed to be paid would be disproportionate to the costs of the particular case; where only one allegation of several is upheld against the solicitor and that allegation in itself is relatively minor in comparison to the others; where the solicitor had previously offered redress which was close to the eventual award.

Recent information from the Law Society's library

Civil procedure

Jolly v Jay and Another, The Times, 3 April 2002 (CA).

The Court of Appeal explained inconsistencies and uncertainties under part 52 of the Civil Procedure Rules in relation to respondents at the preliminary stages of the appeal process.

A report is available under 'Law' on The Times Web site at: www.thetimes.co.uk

Costs

Dunnet v Railtrack plc, The Times, 3 April 2002 (CA).

If a party to litigation turned down alternative dispute resolution when it was suggested by the court, the refusal could have uncomfortable consequences in costs.

A report is available under 'Law' on The Times Web site at: www.thetimes.co.uk

Litigation

Litigation liabilities by Brian Watson (Palladian Law, 2002, ISBN 1902558529).

A guide to the appropriate standard of conduct and effective case management required by clients.

This list has been compiled by the Law Society's library.

For further information, or other legal research enquiries, contact the library, tel: 0870 606 2511 or e-mail: Lib-Enq@ lawsociety.org.uk Copies of most items are available via the library's charged document delivery service: telephone us for a photocopy application form, or download it at: www.library.lawsociety.org.uk