14 January, 2011
Filed Undercosts draftsmen
I recently received a copy of an anonymous letter addressed to the Legal Services Board. A copy of the letter had also been sent to the Bar Council, Law Society and ILEX. The letter had apparently been written by a costs lawyer. The gist of the letter can be gathered from this sentence:
“My concern is that, in comparison to other regulated professionals, many Costs Lawyers lack the proper training required to act on behalf of clients and before the courts.”
The fact that Association of Costs Lawyers (ACL) members are writing to regulatory bodies complaining about the standards required for costs lawyers is indicative of the strength of feeling felt in some quarters.
When the ACL was considering whether to remain an approved regulator I was opposed to the idea. At the time I wrote:
“The proposed increases to membership fees may currently seem manageable, if disproportionate to the benefits. However, they are based on a current understanding of what regulation will require. As Popplewell notes: ‘at the time of applying for authorised body status, we did not know and could not have known the implications of the act’. Precisely. In the highly unlikely event that the ALCD did acquire protected body status, there would then be no way to go back. The ALCD would not be able to decide at some future date that the benefits no longer justified the costs and simply unregulate itself. Once regulated under the Act, there is no way of knowing what may be demanded in the future. Only a moment’s thought will reveal the LSB might demand almost anything at some future date. Does the ALCD really want to lock itself into a regulatory system over which it would have no control?”
In Wednesday’s post we examined JAG’s proposals for criminal advocacy quality assurance scheme. JAG’s consultation paper said: “Further consideration will be given to the question of quality assurance in relation to other areas”. There is therefore every possibility that through JAG, or a regulatory body, a decision will be made to impose advocacy assurance standards on costs lawyers. Frankly, it is amazing the ACL has been able to grant (limited) higher rights of audience based on its current training scheme. It is entirely unknown what future standards might be imposed or what the cost of this might be.
I am grateful for those who have posted comments on the Legal Costs Blog explaining the history behind costs lawyers acquiring current rights. If I have understood correctly, the Ministry of Justice appears to have accepted that all existing members of the ALCD at the time, whether Fellow or Associate, were suitable for being granted rights of audience without further training or assessment. Given a sizeable number would never have conducted advocacy or had any advocacy training (eg many legal aid costs draftsman), all I can say is that the Ministry of Justice must have been asleep on the job.
The reason why the Costs Lawyer course is so short, and has become even shorter, is no doubt one of cost. To produce a training course that was adequate to produce no more than “competent” advocates (and not even at higher court level) has no doubt been viewed as prohibitively expensive. The next Costs Lawyer course year is priced at £300 (including VAT). With the best will in the world, you can’t provide a proper advocacy training course in half a day for £300.
The number of costs lawyers has probably now grown to 600-700. What percentage of these would pass a proper quality assessment test for advocacy at High Court or Circuit Judge level? I would hazard to suggest that a large number would not turn up to a formal assessment on the basis that they have a more realistic understanding of their abilities than the ACL or the Ministry of Justice. Now that responsibility for regulation of the ACL is switching to the Costs Lawyers Standards Board, who knows what they will decide. It would hardly be a surprise if they decided to impose an immediate accreditation process on existing costs lawyers, at least for those wishing to practice advocacy, to ensure consistent quality across the membership.
The same issues arise in relation to ACL’s goal of achieving protected body status. If achieved, there is no way of knowing, and little way of controlling, what requirements or costs of compliance may then be imposed on members.
The ACL had already admitted: “the costs of compliance with the Act will probably be disproportionate to the direct benefits gained by LSB regulation in terms of the exercise of section 27 and 28 rights by Costs Lawyers”.
September’s edition of Costs Lawyer magazine reported:
“The LSB noted that the ongoing costs of regulation are likely to increase the level of revenue required by the ALCD/CLSB, which in turn will probably mean higher practising certificate fees. It said: ‘It remains to be seen what the impact is on ALCD membership of increasing their fees to meet such costs. There may be consumer impact if increased cost leads to existing members moving away from regulation.’ In its action plan, the ALCD said this highlighted the importance of making costs-related work a reserved legal activity.”
This is the ultimate irony. The ACL recognises that the actual benefits of regulation may not justify the costs. It fears that members may vote with their feet and leave the ACL. Its solution is therefore to try to make membership compulsory for those who work in the field of costs. If the ACL ever finds it is obliged to ensure its members are subject to proper advocacy training and assessment the cost of regulation will rise substantially. It is locking itself into something that it clearly believes many of its members cannot afford or would not be prepared to pay for.
All this is happening at the same time as the recommendations contained in the Jackson Costs Review start to be implemented. At the moment there has been no news on the proposal to introduce fixed costs for the fast-track, other than extension of the RTA claims process. Given how simple and, amongst many, popular this step would be, it would be a miracle if this does not happen in the next year or two. If, and when, it comes, there are going to be heavy casualties in the costs world. Costs budgeting is not going to make up for the shortfall.
The costs profession is facing the legal aid shake-up that is also likely to seriously impact on the numbers practicing.
Post-Jackson the ACL is likely to find itself smaller and in a very different costs landscape. In so far as one of the aims of the ACL has been to remove the “cowboys” from the costs profession, the Jackson fixed costs proposals would largely achieve this through natural selection. If only high-value costs claims are left in the system only genuine costs experts are likely to survive. (For the love of God, let it be so.) The ACL may find itself stuck with an expensive regulatory system but with only a small number left to pay for it. Its recent decision to automatically upgrade Associates to Fellows, and then to Costs Lawyers on the back of a one-day course, takes the ACL in the opposite direction to the one it should be taking.
At the time, the ACL said:
“the relevant test has to be one of competence, not excellence. The ALCD would be failing in its duty to entrants and the public if it were to set the bar so high that only a select few could clear it”
Is “competent” by today’s standards going to be sufficient post-Jackson/post-legal aid meltdown?
Events outside the ACL’s control mean that there are only going to be a “select few” left. The Association has to strive for excellence if its members are to be among the survivors. There are too many excellent costs professionals outside the ACL for membership alone to guarantee survival.
I will try to bring these various rambling thoughts into something approaching a coherent whole in the next day or two.