Legal costs relating to a Solicitor

WHAT IS A COSTS LAWYER AND HOW CAN THEY HELP ME?

A costs lawyer is a qualified and regulated legal professional who specialises in the law and practice of legal costs. Costs are involved in nearly every type of law and legal case, which is where costs lawyers can help. The costs referred to here are the solicitors’ fees and disbursements* incurred in a case.

To become a costs lawyer, you need to undertake a three-year training course (equivalent to a degree level qualification.) Costs lawyers are regulated by the Costs Lawyer Standards Board (CLSB), which is overseen by the Legal Services Board (LSB). All costs lawyers are also required to carry professional indemnity insurance.

Costs lawyers handle all types of costs issues. If the case cannot be resolved between parties then it is passed to the dedicated Senior Court Costs Office (SCCO) in London.

There are two areas of practice where costs are involved. These are: inter partes costs and solicitor and client costs. Detailed answers and questions on these two areas have been included here as well on a fixed fee basis.

WHAT DOES INTER PARTES MEAN?

This is a Latin term which means ‘between the parties.’ In general terms, each party is liable for their own solicitors’ fees and disbursements in conducting the case. However, courts have the jurisdiction to order one party in the action to pay another party’s legal costs as well as their own. There are many factors to be taken into account by the court, prescribed by the Civil Procedure Rules (CPR), but the usual rule is that the unsuccessful party in the case will be ordered to pay some or all of the successful party’s solicitor’s fees and disbursements.

Solicitor and client costs – in any legal case, you will have to pay your solicitor for their time and disbursements for working on your case. Solicitors have a strict code of conduct which they must comply with to keep you updated of the fees they incur throughout your case. If you are unhappy with the fees charged to you by your solicitor and/or they have not fulfilled their duty in accordance with their retainer (contract), you have the legal right to challenge the same.

* a payment, especially one made by a solicitor to a third party (counsel, experts etc) and then claimed back from the client

I AM UNHAPPY WITH THE AMOUNT MY SOLICITOR HAS CHARGED ME FOR HANDLING MY CASE. CAN I CHALLENGE THESE COSTS?

If you believe your solicitor has charged you unfairly or you think there may be costs that fall outside of your agreement with your solicitor, it is possible to open a case to challenge these costs.

The retainer (contract between you and your solicitor) states the work required from the solicitor and details of what grade and hourly rate this is to be charged. There can be other agreements regarding providing regular advice and importantly, cost estimates throughout the lifespan of the case. It is only once this work has been completed that a solicitor is entitled to their costs, unless the contract has been terminated by agreement. It is essential to scrutinise the signed retainer to establish any unreasonable conduct that may have occurred.

We recommend seeking advice from a costs lawyer to ascertain whether your claim is likely to succeed.

HOW DO I CHALLENGE MY SOLICITORS’ FEES ?

It is highly recommended you instruct a firm of costs lawyers to take you through the steps by which you can challenge your solicitors’ fees. They will:

1. Review all documentation (it is important to keep all paperwork, as ordered as you can).

2. Correspond with the solicitors.

3. Request a Final Statute Bill.

4. Consider the Final Statute Bill.

5. Negotiate with the solicitors.

6. Submit a Part 8 claim form to the court to commence assessment proceedings – at present the court requires a fixed fee of £50 attached to the claim form.

At this stage, the solicitors will deliver a bill in the format required by the court; this will be accompanied by a detailed breakdown of the work carried out during your case.

A costs lawyer will then:

7. Prepare points of dispute – this is a court document that clearly sets out the challenges you have agreed to make against each item within the solicitors’ bill.

8. Receive and consider the solicitors’ replies to the points of dispute – at this stage, either side may make an offer for the amount they are willing to pay/accept for the amount of the bill.

9. Prepare for assessment – should negotiations fail to settle the matter, the costs lawyer will thoroughly prepare for the assessment process. The judge or costs master will take into account the bill, breakdown, points of dispute and replies to reach a final decision as to the reasonable amount you can expect to receive.

10. Advise you on the results of the assessment and any reductions made to the bill.

It is important to ensure that no costs lawyer will proceed without your instruction, and you will receive advice at each stage of the process.

ARE THERE ANY COURT DEADLINES WHICH I MUST COMPLY WITH IF I WISH TO CHALLENGE MY SOLICITORS’ FEES ?

First of all, you must know whether the solicitor has delivered a final statute bill.

If yes: the final statute bill delivered by the solicitors should detail all the costs payable by you. There is a deadline of one month from when this bill is provided to apply to commence assessment proceedings if informal negotiations before this date have not been successful.

If no: if your solicitor is not forthcoming with the final statute bill, you can apply to the court using a templated claim form. The court then has the power to order the solicitor to deliver a bill. This bill, accompanied by a breakdown, will lay out the fees charged to you in detail. There is a deadline of one month from when this bill is provided to apply to the court to commence assessment proceedings if informal negotiations before this date have not been successful. It is important to note that no payment will be required from you until this assessment is completed.

Then...

21 days to produce and provide your solicitor with points of dispute. This is a Court document that clearly sets out the challenges that you have agreed to make with the costs lawyer for each item within the solicitors’ bill. Failure to do this within 21 days may mean you lose your right to challenge the costs claimed against you.

Then...

A further 21 days for the solicitors to produce and provide you with points of reply. This is provided within the same document as the points of dispute and sets out the solicitors’ response to the challenges that you made in respect of the bill.

If both parties are still unable to reach an agreement, a request can be made to the court for a hearing in which the costs judge will determine the amount payable.

WHAT REDUCTION WILL I ACHIEVE BY CHALLENGI NG MY SOLICITORS’ FEES?

Each individual case has a different background and the solicitors’ costs and disbursements* are all different. There may be circumstances throughout an individual case which will warrant a challenge on the legal fees claimed, which will limit the amount paid.

For example, it is possible a disbursement could have been paid out by your solicitor which was not agreed by you beforehand. Or perhaps you may notice that throughout the final statute bill, another solicitor has been involved in your case without mention of him/her in the terms or conditions and therefore without your agreement. These are the sort of challenges that can will lower the costs payable by you.

It is worth noting that under the Solicitors Act 1974, if on assessment, the solicitors’ bill is reduced by 20% or more, the solicitor is required to pay the costs associated with that assessment. In contrast, if the bill is not reduced by at least 20%, you will be liable to pay the assessment costs. You should be aware that the costs in proceeding to a hearing can be considerable. Choose costs lawyers that are experienced in solicitor and client matters and who can advise you fully as to the risks of proceeding to assessment so you can have confidence in your case.

* a payment, especially one made by a solicitor to a third party (counsel, experts etc) and then claimed back from the client.

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