In my last article, I started looking at some of the areas where your costs may be challenged, with guidance on how to avoid those challenges being sustained.
Applying changes to basic charging rates is in too many cases approached carelessly. In the absence of the client’s agreement to increased charging rates, the solicitor is restricted to those agreed at the outset. The client is entitled to certainty as to what he will be liable to pay.
Little regard is had to the obligation to the fact that costs between a solicitor and client are deemed to have been unreasonably incurred if (i) they are of an unusual nature or amount; and (ii) the solicitor did not tell his client that as a result he might not recover all of them from the other party.
Commonly we see solicitors taking expensive steps and incurring unusual expense without seeking advance express approval from the client and/or failing to give proper advice on the costs implications of those steps. Proceedings are often started without the express approval of the client; there is recourse to counsel, again without the express approval of the client; and expert evidence commissioned without advice given to the client as to costs recovery from an opponent. Greater care here and clear written advice restricts the opportunity of challenge. Do consider obtaining the client’s approval in writing to every step taken and confirmation in writing of every document and important letter written – a client who has verified the accuracy of a document can hardly have cause for complaint if it later transpires that facts were erroneous and costs wasted thereby.
Evaluating case merits and continuously monitoring the merits in conjunction with a costs/benefits analysis for the client could in many cases be much better and eliminate client dissatisfaction where a disappointing outcome results. Interim billing, where the retainer so permits, should reduce complaints. Such bills when in statute form are difficult to dispute once paid and are less painful for a client than one large bill at the end of the retainer.
Once the work on the client’s case has been completed, there is the greatest opportunity to avoid a dispute concerning charges. The inclination for every busy fee-earner is to close the case and deliver the final bill as quickly as possible, with no great thought as to the response of the client to the amount of that bill and client satisfaction. It is not enough to take the end figure from the computer time record and bill the client for that amount.
Come what may, the approach followed when seeking to recover between-the-parties costs must not happen. The consequences for a solicitor overcharging his client are much more serious than the overstatement of between-the-parties costs. The question ‘is that a fair and reasonable sum?’ should be considered. The fee-earner delivering the bill must know what, as a matter of law, can and cannot be charged; even in 2013 we see bills adding a charge for the costs of postages, telephones, copying, faxes, when it has been established for decades that they form part of as solicitor’s overheads and are subsumed in his hourly rate, unless the amounts are exceptional and the guidance given earlier followed.
A client who is advised of the actual cost figure and who is then billed for a lower amount, because of his value as a client, is much less likely to question the reasonableness of the bill.
When a client questions a bill, it is a mistake to feel indignation. His reasons for so doing must be fully explored and complaints procedures gone through. A meeting with the client with a view to reaching a compromise may be essential. Often, a modest concession is all that is required to avoid further contention. In the more complicated matters, expert guidance from a costs lawyer should be sought.
With a modicum more thought to client care, many disputes could be avoided. Solicitors do strive to do the best for their clients in the work they do, but fall down in client care. A solicitor whose client care is of the highest standard has nothing to fear from the costs negotiator. On the other hand those whose client care is inadequate should have every reason to be concerned at what I fear may become the next major area of costs wars.
Murray Heining is Chairman of the Association of Costs Lawyers