Costs News

05 July 2018
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Senior Costs Judge says time is right for review of Solicitors Act’s costs provisions

It is time to review the remuneration provisions of the Solicitors Act 1974, the Senior Costs Judge said last week.

In a wide-ranging speech, Master Gordon-Saker (pictured) also called for a broad extension of qualified one-way costs shifting (QOCS).

He was speaking at a Civil Justice Council seminar on the government’s post-implementation review of part 2 of LASPO. Council member Claire Green attended and spoke on behalf of the ACL.

Master Gordon-Saker said: “One of the unintended consequences of LASPO is that there is a growing industry in challenging solicitor and own client bills, in part because a surprising number of solicitors seem to think that the success fee payable under the CFA by the client is fixed at 25% of the damages and that there is absolutely no need to make any assessment of the risk or to apply the resulting percentage to the base costs that were actually incurred.

“I think that the Law Society could do a bit of educating on that, but I also think now may be the time to review the Solicitors Act 1974 and in particular part III, which deals with remuneration.

“We could have a simpler system for deciding whether a client is entitled to challenge a bill, sweep away the byzantine distinctions between final and interim bills, and have addressed the position of third parties who are liable to pay bills but have effectively lost their right to challenge those bills following the decision in Tim Martin v Akin Gump.”

Master Gordon-Saker said he would extend QOCS “as far as it will go”. He explained: “Recoverable ATE premiums were introduced because legal aid costs protection was lost. Now those ATE premiums are no longer recoverable, QOCS needs to fill the gap that was filled before ATE by legal aid costs protection.

“There is no reason it should not be extended to, for example, claims against the police or to claims for professional negligence where the claimant is of modest means. There is scope for means-based QOCS.”

He also questioned why costs judges were not involved in budgeting. “Costs judges have not been involved in costs budgeting, because the view was taken that case management and costs management were symbiotic, and needed to be done by the same person at the same time.

“If a costs judge can decide at the end of the case whether it was reasonable to instruct three experts or spend quite so much time on disclosure, I fail to see why he or she can’t do that prospectively at a CCMC.”

Ahead of the seminar, the Ministry of Justice (MoJ) published a preliminary assessment of part 2 that said the reforms were generally working well.

It indicated a willingness to tighten up the referral fee ban if needed, but did not commit to reforming damages-based agreements (DBAs) to improve their take-up.

The MoJ has issued a survey to seek views on the five statutory reforms to costs and funding contained in the Act.

This will all culminate in a report on part 2 prepared by MoJ officials later in 2018, after which it will be for ministers to decide what further actions, if any, to take.

On the end of recoverability, the MoJ said that “at first sight, it seems that costs have been reduced (by the structural changes) while claims continue to be brought, albeit with a slight reduction overall”.

However, it noted “anecdotal evidence that the maximum success fee is routinely charged without an assessment of the risk in individual cases”.

A full report of the speech and event will be in the next issue of Costs Lawyer.



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