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Solicitors struggle to adjust to costs regime

21 January 2019

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Solicitors are still struggling to keep within the confines of the new costs regime, according to a survey of costs lawyers.

The poll by the Association of Costs Lawyers (ACL) in November found that 23% of ACL members believe that solicitors always go over what is budgeted, and a further 53% said they sometimes go over.

These figures are an improvement on the same survey in 2017, when the figures 29% and 65% respectively. Also positive was the news that one in ten ACL members believe solicitors have got better at sticking to their budgets, compared with just 5% the previous year.

Reflecting on the new electronic bill of costs, which came into force last April, 41% of ACL members said they were getting used to it, while 23% described it a “hard sell” to solicitors.

In the case of 48% of respondents, they said solicitors they dealt with were not ready when the new system came into force in April. Moreover, only 6% of costs lawyers reported that solicitors had transitioned easily to the new regime.

Respondents also reported that the judiciary had largely not ready been for the introduction of the electronic bill either, but 54% said judges were now “keen to get going” with it.

The courts are increasingly willing to wade in on costs as demonstrated by the High Court last week, when it took the step of capping the costs of a litigant ahead of their appeal in the Supreme Court.

The judge in Airways Pension Scheme Trustee Ltd v Fielder & Anor, Sir Richard Arnold, limited the claimant to the same costs as the defendant.

Arnold J said the court should “seize the nettle now so that everyone knows where they stand”. He said the claimant’s costs estimate of £1.24m “on an appeal raising a single point of law with a hearing lasting only 1½ days” was “deeply alarming”.

As a trustee of the Airways Pension Scheme, Arnold J said the claimant was entitled to indemnity costs from the assets of the scheme but that this did not mean the allowable costs for the appeal were limitless. The case is further evidence that the courts will to step in when costs appear to be disproportionate or unreasonable.

Commenting on the results of the ACL survey, the organisation’s chairman Iain Stark (pictured) said: “It is obviously good that the message about budgeting is getting through but, nearly six years on from its introduction, it is disappointing that it has taken so long.

“You would hope that solicitors would take more care with budgets and seek to revise them when needed, rather than relying on the increasingly difficult task of convincing the judge on assessment that they had a ‘good reason’ not to stick to the budget.”

He added that the results of the survey “indicate that the take-up of the electronic bill of costs may be smoother as parties and judges start to see the benefits of what should be a quicker and more transparent process”.

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Funding & Costs