Costs News

06 June 2019
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Be transparent with clients about your own costs, regulator tells Costs Lawyers

The Costs Lawyer Standards Board (CLSB) has issued guidance on the transparency Costs Lawyers should display in relation to their own costs.

The guidance, which only applies where they are acting for individuals or small businesses, applies to sole practitioner Costs Lawyers and Costs Lawyers working for costs law firms and they have a website and/or issue promotional material.

The obligation will weigh in particular on owners of costs firms who are Costs Lawyers, as the CLSB said it appreciated that Costs Lawyers who were employees “may not have any control or influence over their employers, their employers’ website or promotional material”.

This makes the CLSB the latest regulator to take action following the 2016 Competition and Markets Authority report on legal services, which stressed the need for more information to help consumers shop around for and choose their lawyers.

The Solicitors Regulation Authority, Bar Standards Board, Council for Licensed Conveyancers and CILEx Regulation have all introduced transparency rules, although in each case they were consulted on and approved by the Legal Services Board (LSB). The CLSB guidance, as it is not changing regulatory arrangements, has not gone through that process.

The guidance lists two outcomes for Costs Lawyers to achieve:

- Consumers and small businesses that may need advice on issues relating to legal costs are able to make informed choices about which provider to use, based on clear and accurate pre-engagement information on providers’ websites and in their client-facing communications; and

- As their matter progresses, clients have the best possible information about changes to prices and/or services.

The information they should make available on their websites or otherwise includes the basis for charges, including detailing hourly rates by grade of staff and the likely number of hours needed for different services.

The guidance also recommends “scenario-based pricing/indicative fixed fees”, where illustrative examples are given including likely cost and timescales, and factors that may affect these and the circumstances where additional fees may be charged.

Meanwhile, the CLSB has put in a robust response to the recent LSB warning notice that said it was minded to refuse its application for a new route of entry into the profession.

In a letter to the LSB, chief executive Lynn Plumbley (pictured) argued that its proposed Costs Lawyer Competence Assessment (CLCA) was proportionate – “based on the profession’s low risk profile” – and sustainable, and met “all the published requirements of the LSB”.

She argued that the new scheme was necessary to continue providing training for would-be Costs Lawyers, and dismissed the criticism that it was unable to show there was demand for the CLCA or that it was commercially viable.

“Until such time there is an approved product to offer, specific demand for it cannot be quantified… Four well-respected legal training companies and a university have expressed an interest in providing the CLCA. If these businesses consider the CLCA ‘commercially viable’ and the CLSB assists in supporting effective marketing, demand for it should develop. As we have advised, the provider will have other means of financially supporting the CLCA e.g. providing specialist CPD to Costs Lawyers.”

Ms Plumbley also implicitly criticsed the oversight regulator for not engaging directly over its concerns. “If the LSB is of the view that the CLSB has misunderstood the nature of its concerns, or should it wish to discuss them further, the CLSB would be happy to meet to discuss those issues,” she wrote.

“We are of the view that many of the gaps between the CLSB position of comfort with the proposal and that of the LSB could be narrowed by way of a meeting (face-to-face or conference call).”

 

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