I recently commented on some of the benefits of membership of the Association of Costs Lawyers (ACL) which included discounted subscription fees for Lawtel. I'm now going to have to remove that benefit from the list.

When the existing annual Lawtel subscriptions of some ACL members were coming up for renewal those members had the temerity to ask Lawtel for their subscriptions to be renewed on the same discounted terms that the ACL had negotiated. This was done for no better reason that:

They were also ACL members.

They thought that Lawtel might be prepared to recognise their Lawtel loyalty by extending the same discounted rates as had been offered to various Johnny-come-latelies who had not been previous Lawtel users.

Well, Lawtel was obviously not going to put up with any of that kind of nonsense. They immediately:

Threw their toys out of the pram.

Withdrew the ACL discount for other ACL members.

Cancelled their stall at the forthcoming ACL Annual Conference.

I guess it takes years of training in sales and marketing before it's possible to run such a smooth operation.
 

One of Jackson LJ's proposals is for fixed costs for all stages of all fast-track matters.  He concluded that this would produce savings in its own right as:

"Claimant solicitors will no longer have to maintain documentation required for costs assessment" 

This is presumably on the basis that it will not be necessary to time record with fixed fees for fast-track matters. 

However, won't solicitors still have to time record pre-allocation as they won't know which track a matter will be allocated to?  The injuries may be more serious than first thought.  Even if the claimant is happy to run the case on the fast-track, the defendant may raise issues, such as alleging fraud, that takes the case away from the fast-track.  Even if allocated to the fast-track, the matter might be re-allocated at some future date.

Following on from my two-part article on the Leeds provisional assessment pilot, in Costs Lawyer magazine, District Judge Hill wrote a very informative article in response.

One of the areas of concern that I highlighted was the fact that the rules did not allow for the court to know what offers have been made and when. There appeared to be no mechanism for the court to award detailed assessment costs to the paying party.

DJ Hills response was, essentially, two-fold. Firstly:

“The costs judge will not know of offers but so what? Do the rules and practice directions really need to cover every possible eventuality?”

I’m not sure that having a rule that allows the court to know whether a paying party has made a successful offer is to be described as covering “every possible eventuality”. The provisional assessment rules do indeed make specific provisions in relation to dealing with the costs of assessment. The omission in question appears rather fundamental.

Secondly, DJ Hill wrote:

“If, say, there was an offer of £17,000 but the bill is assessed at £18,000, we know what the effect is and no adjustment to the provisionally assessed bill is required.”

Do we know?

If, say, a bill of costs is served seeking costs of £50,000, the paying party offers £17,000 and the bill is assessed at £18,000, is liability for the costs of assessment really obvious?

The starting point is that the receiving party is entitled to costs of assessment unless the court orders otherwise (CPR 47.18(1)(b)). DJ Hill’s article says: “The usual rules apply.” What about CPR 47.18(2) then?:

“In deciding whether to make some other order, the court must have regard to all the circumstances, including –

(a) the conduct of all the parties;
(b) the amount, if any, by which the bill of costs has been reduced; and
(c) whether it was reasonable for a party to claim the costs of a particular item or to dispute that item.”

What role for those factors (that the court must have regard to) if beating a paying party’s offer is an end to the matter?

In the example above, it is highly unpredictable, in my experience, what order a court will actually make.

The article also skated over the question of how the court will award the paying party its costs of assessment. It is suggested that “the PD does contain provision for the costs of the provisional assessment to be reviewed on written submissions”.

To repeat my previous observations, section 9 of the Practice Direction states:

“If a party wishes to be heard only as to the amount provisionally assessed in respect of the receiving party’s costs of the provisional assessment, the court will invite each side to make written submissions and the amount of the costs of the provisional assessment will be finally determined without a hearing.”

This refers only to the “receiving party’s costs” and suggests that the only arguments will be as to quantum and not as to the incidence of costs. It might be possible to use this route to reduce or even disallow the receiving party’s costs but how does the paying party get costs?

With the best will in the world, I can’t see how “the amount provisionally assessed in respect of the receiving party’s costs of the provisional assessment” can be interpreted as including receiving submissions as to the incidence of costs.

If the pilot is to be extended, as I’m sure it will be, a redraft of the rules is needed to deal properly with the incidence of assessment costs. Badly drafted rules lead to unnecessary satellite litigation.

What am I saying? The pilot is fine as it stands.

My two-part article from Costs Lawyer magazine on the county court provisional assessment pilot can now be read in the News section of our website for those who missed it the first time.

The other day I posted a somewhat tongue-in-cheek comment about how the need for success fees could be avoided if claimant lawyers stopped bringing bad claims. However, there was meant to be a serious point underlying it.

APIL’s opposition to the Jackson proposals to end recoverability of success fees can be seen from APIL’s president Muiris Lyons comment:

“How can it be fair and just for someone who is suffering because of another person’s negligence to have to pay towards putting things right?”

This question, and the issue of recoverable success fees, of course begs the following questions:

“How can it be fair and just for someone who is not suffering because of another person’s negligence to have their costs of pursing a misconceived claim paid for by another party?”

and

“How can it be fair and just for someone (Party A) who has caused suffering to Party B to be forced to pay to towards the legal costs of Party C who has suffered an injury but as a result of an accident unconnected with Party A’s actions and incurred in the process of a failed claim against Party D?”

Traditionally, legal claims were paid for privately. If a party was able to persuade the other side or the court they had a good claim then their legal costs were paid for by the negligent party. If a party failed in their claim, they paid their own costs (and those of the party they had “wrongly” pursued).

Legal aid transferred the costs of the “bad” claim from the individual who brought the “bad” claim onto the tax payer. Or, arguably, enabled some “good” and “bad” claims to be brought that might not otherwise have been brought at all.

The previous Government’s decision to introduce recoverable success fees transferred the costs of “bad” claims from the tax payer or the individual (often regardless of the ability of the individual to fund the claim privately) onto negligent defendants. Party A, who has negligently injured Party B, has to pay the costs of Party B and also (via the success fee mechanism) the costs of Party C bringing a “bad” claim against Party D.

Recovery of success fees does not pay towards “putting things right” for a person who is suffering because of another person’s negligence. That is paid for by ordinary costs shifting. Instead it pays for the costs of bringing “bad” claims.  Success fees pay for claimant lawyers bringing "bad" claims. 

Any system other than straight private retainers is about producing a system whereby the cost of “bad” claims is shifted from the person making the “bad” claim elsewhere.

There may be very good reasons for this shifting of costs but the claimant lobby does no favours for itself by trying to paint this as being a simple black and white issue.

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5 2 08
 

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Last week's Law Society Gazette had an article on the implications of the Jackson proposals for clinical negligence claims.

The proposal to end recoverability of success fees was criticised. The thrust of the objection was that “the proposal will not reduce costs but instead move a significant part of them from a guilty defendant to an innocent claimant”.

Clinical negligence claims against the NHS fall into one of two categories:

  • Those where the NHS has been negligent.
  • Those where the NHS has not been negligent.

The system of recoverable success fees means that the NHSLA pays for the cost of claims being brought against it where the NHS has not been negligent. This happens through the mechanism of having to pay success fees in cases where it has been negligent; the success fee being designed to compensate the solicitor for those cases that are lost.

The criticism levelled in the article, and raised on numerous other occasions during the Jackson debate, is that ending recoverable success fees will mean that claimants have to pay success fees out of their damages and will thus be under-compensated.

Surely there is no need for claimants to have to pay success fees at all. Claimant solicitors should simply stop bringing claims against the NHS when the NHS has not been negligent. That way there will be no unsuccessful claims. The article was happy to point out that savings could be brought to the current system if the NHSLA admitted liability more quickly when there had been negligence. Given how easy it apparently is to distinguish between a good case and a bad case, claimant solicitors should stop bringing the bad ones. With 100% success rates there will be no need for success fees to be charged and claimants can keep 100% of their damages.

Everything in life becomes simple once the problem is looked at properly.

Following on from the last couple of posts, today I'm going to explore a possible future for a regulated costs profession.

My own view is that the ACL's training programme’s current modular structure should remain, with some possible adjustments, and a further specific advocacy module be added. Training for individuals should be adaptable for the needs of those joining. This is, after all, a vocational course. If a member worked for a volume negotiating firm they might chose just to take the General and Civil Costs module. If they also wanted to exercise rights of audience, they could choose to take that additional module. Those who worked in legal aid only could take the corresponding module. I don’t see this as being a case of dumbing-down. Indeed, this might be an ideal opportunity to review the decision to lower the academic standard of Costs Lawyers to the old Association standard from the previous Fellow standard. Post-Jackson there will an increased need for true expertise amongst those left, not less. There is no self-evident reason why Costs Lawyer status should not be granted to members on the back of this suggested model. I don’t know the first thing about legal aid law and they let me in as a Costs Lawyer. I can’t be the only one. There is no reason to suppose that Costs Lawyers of the future will need a broader knowledge of costs law than at present (especially in relation to a dwindling legal aid market). They may well need a deeper knowledge.

One of the counter arguments to the above is that some other professions (eg the Bar) do indeed require those training to study areas of law where they probably will not actually practise (eg studying criminal procedure despite having already secured a pupillage in a purely Chancery chambers). To which my response is: so what? I fail to see any reason to impose unnecessary training/entry requirements on this profession. Costs Lawyers should be properly trained for the work they actually do.

A second objection is how will members of the public (or more often the wider legal profession) know that a Costs Lawyer is competent to deal with any given area if not all Costs Lawyers have trained in every area of costs law? To this there are a number of answers:

• How do they know now? I’m a Costs Lawyer and I wouldn’t be remotely competent to deal with a legal aid matter (or at least not without no small amount of research).

• Members of the Bar may be “allowed” to accept instructions in any area of law once qualified but they are also under a professional duty not to accept instructions in a case if the barrister “lacks sufficient experience or competence to handle the matter”. Exactly the same should apply to Costs Lawyers (if it doesn’t already) and nothing further should be needed.

• If something else is considered needed, a simple rule could be introduced that Costs Lawyers may not act in an area of costs law where they have not completed the corresponding module.

What about the removal of entry to the ACL by examination route? Reintroduce. I do not accept that this route represented a “smear on the association’s history” as one reader recently suggested. Perhaps I am just saying that by virtue of the fact that this is the route by which I gained entry. However, it was no cakewalk. I would see the examination route mirroring my proposed four training modules. To gain Costs Lawyer status would require passing an examination based on at least one of the first three modules. To be able to exercise rights of audience would require passing the corresponding examination/test (probably something equivalent to that required for solicitors gaining higher rights of audience). Of course, it would be a matter for the CLSB to set the standard for entry by examination and I would encourage them to set it at an appropriately robust level.

(There seems every possibility that the CLSB will decide in any event that existing members should be subject to an advocacy accreditation process if they are too continue to exercise rights of audience.)

Now is the time to recognise that the “traditional law costs draftsman” is an important part of the costs world but in a (growing?) minority. The relaunching of the Association of Costs Lawyers is the ideal time to start to recognise this and have a membership structure that also recognises this. This may encourage the legal aid draftsmen to stay in the Association. It may also encourage the large numbers outside the Association that now is the time to consider joining.

Some of you may know the story of the boy who was appearing in a parade. His proud watching mother is heard to say: “Ooh look - our Archie's the only one marching in step”.

Laughs all round.

Actually, the mother may not be as silly as she sounds. For a number of years I had to march on a daily basis to a full marching band. (By a strange coincidence I believe Lord Justice Jackson marched to the same band.) Now, I have no understanding of things musical, but I did learn that the big drums in the band beat out not only the pace of those marching but also dictate the “left, right” part. It is therefore perfectly possible to be the only one marching in step.

I always console myself with this thought when finding myself in a minority of one.

This post continues yesterday's on the subject of whether all Costs Lawyers need to fit into the same mould.

A number of years ago, during the heyday of the costs negotiating industry, the ALCD, as it was, held discussions with a number of the major costs negotiating firms to explore the idea of employees of those firms joining the Association. This appeared to be a sensible initiative. This was back at the height of the costs wars and before the introduction of the predicable costs regime when that part of "industry" was at its peak. The Association had a chance to become truly representative of a far larger proportion of the costs profession/industry than it then was and there were potential benefits to the costs negotiating firms of an Association that was, at the time, beginning to introduce a proper costs training programme. I attended a joint meeting with other costs firm and representatives from the Association as I was, at the time, a senior manager with one of the major costs negotiating firms. Although the discussions were positive, nothing further happened.

When the issue was subsequently resurrected I wrote to the Association and the letter was subsequently published in the ALCD Journal (see letter). This is all the way back in June 2003. The thrust of my letter was that the training programme required at the time for those joining the ALCD was too wide for those who practised in the cost negotiating industry. The ALCD training programme required proficiency in all types of costs work (including for example legal aid and solicitor/own client work) whereas cost negotiators tended to work in the limited area of between-the-parties costs disputes (and predominantly personal injury at that).

From memory, and others may be able to correct me on this, the Association considered whether to introduce a reformed training programme to take into account the more limited needs of non-traditional costs draftsmen. I believe that a decision was taken to make concessions for those costs draftsmen who undertook just legal aid work but the training requirements were otherwise left unaltered. Presumably, and this is where I simply speculate, the members of the Association as the time (or at least the Council) decided that the Association should remain one designed for traditional independent law costs draftsmen and that alterations of the kind I had suggested would change, for the worse, the nature of the Association.

The Association therefore took the decision to remain a body exclusively for what I will term “traditional law costs draftsmen”. It also meant, of course, that the large numbers working in costs but not as “traditional law costs draftsmen” did not join. As at 31 December 2009 there were 764 members of the ALCD. The Association estimates there are currently “5,000 people working as unqualified and unregulated costs draftsmen”. (It is not clear whether this includes the large number who work in-house for firms of solicitors and are therefore regulated but not by the ACL.)

When the ALCD was a purely representative body, it could choose who it wanted to represent and how. Now the ACL is regulated by the CLSB. If the ACL is to encourage, as it has set out to do, the other 5,000 people to join the Association, or if the ACL were to achieve protected body status and the whole costs profession was thereby required to join, or if the profession has had protected body status all along and it is only a question of time before this is appreciated and non-members come flocking to join, then I am of the view the question of what a costs draftsman/costs lawyer is needs to be re-examined.

This is particularly import given the recent decision of the ACL to scrap the Fellowship entry route to membership and require henceforth all new members to complete the full modular training course.

If the CLSB is, or is to become, the gatekeeper to entry to the costs profession, what should this mean? Who should they be letting in and who should they be keeping out?

If there ever was a time when the majority of those working in costs were all “traditional law costs draftsmen”, I would suggest that time has long gone. Although there are no doubt many who would still fall into that category, I would suggest they are a minority. A far larger number will deal exclusively in a limited area, such as between-the-parties costs or legal aid.

The ACL modular training programme, from a quick glance at its website, is broken down into the following three modules:

• General and Civil Costs.

• Solicitor and Client Costs, Special Courts and Tribunals.

• Public Funding/Legal Aid.

Each of these modules is therefore now compulsory for new members. The cost of each module is about £1,000. As a general proposition, I would suggest the ACL is going to struggle to increase membership on a voluntary basis amongst established costs draftsmen given the combination of cost, time commitment and the possible requirement to study an area where one has no intention of practising.

Frankly, given the likely legal aid shakeup, in a couple of years time there will be more people in the country who can say they were once a contestant on Big Brother than will be able to say they currently undertake legal aid costs work. It is entirely sensible to retain a module for this area for those who work or want to work in it, but I see no need or advantage in making it compulsory for the majority who do not and will not. Indeed, if the legal aid shake-up is half as bad as feared, the last thing the profession needs is more people trained in this area.

The Association should celebrate diversity amongst it members and the CLSB should accommodate it. It’s possible, for example, to become a barrister (or at least it was when I was training) having never studied family law. Is it right for it to be impossible to become a Costs Lawyer without studying legal aid costs? The CLSB, if it is to regulate the whole costs profession, should do so by recognising the reality of the composition of the wider profession and not be constrained by a rather outdated ALCD model which was designed to cater for a small sub-section of those who worked in costs.  

Tomorrow I’ll explore the alternatives.

There are a number of interesting developments occurring in the costs world at the moment, a number of which interlink. The Jackson implementation consultation and legal aid reform consultation both close today (although parts of Jackson are already being implemented by the courts) , this week sees the relaunch of the Association of Law Costs Draftsmen as the Association of Costs Lawyers (ACL), the Costs Lawyer Standards Board (CLSB) is being established to regulate Costs Lawyers, the ACL has announced plans to encourage the “5,000 people working as unqualified and unregulated costs draftsmen” to join the ACL, the recent publication of District Judge Hill’s article suggesting that the ACL had already – at least so far as advocacy is concerned – achieved protected body status (to the surprise of some), the ACL continues (presumably) to work towards achieving protected body status (in case DJ Hill proves to be incorrect), and upcoming elections to the ACL Council.

The March 2010 edition of Costs Lawyer magazine explained the ACL’s action plan:

“At present, the ALCD has four tiers of membership: Costs Lawyer, Fellow, Associate and Student. Eventually [emphasis added] the ALCD should emulate other regulators, having two membership levels: trainee and full”

At the ALCD AGM in March 2010 the Association voted overwhelmingly in favour of the proposal:

“The ALCD seeks the support of its membership to continue to meet its obligations as an authorised regulator, given the additional expense required to do so”

Although “overwhelmingly” should be put in the context that only around 20% of eligible members bothered to vote (such is democracy).

The May 2010 edition of Costs Lawyer magazine gave the ALCD’s chairman’s view that:

“Mr Stark is convinced that Associate and Fellow levels need to be abolished, so that there are either students or costs lawyers. He does, however, appreciate that this change is going to have to be sold [emphasis added] to those Associates and Fellows who have no need for the rights costs lawyer status brings.”

The July 2010 edition of Costs Lawyer magazine announced, with no obvious attempt in the interim to “sell” this change, that with immediate effect all Associates would be upgraded to Fellow status and by 1 January 2012 all existing Fellows would need to attend the Costs Lawyer course so only trainees and Costs Lawyers would remain. The chairman explained:

“If one compares the current membership structure of the ALCD with other frontline approved regulators such as the Law Society (trainee solicitor and solicitor) and the Bar (pupil and barrister), it is clear that the entire membership must be regulated and conform to recognised practice. … It is inevitable that these major changes will attract criticism from some members.”

In a response by the ALCD Council to a previous posting on the Legal Costs Blog it was explained:

“The ALCD is leaving behind its status as a trade association and is becoming (or, more accurately, is creating) a regulatory body. The rights which it will regulate include rights of audience and rights to provide legal services, and may in due course include the right to practise reserved legal activities. This means that 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.”

Now, I’m going to stick my neck out here and suggest that the decision to reduce the categories of members to two had little or nothing to do with bringing the Association in line with other regulated bodies, modernisation or ensuring that the bar was not set to high, but was all to do with cost.

But, let’s examine the justification given in passing:

• Bar – pupil, barrister, QC (OK, I know I’m stretching that one)

• Law Society – trainee solicitor, solicitor, solicitor with higher courts rights of audience, solicitors with membership of various accreditation schemes

• ILEX – Student, Affiliate, Associate, Graduate, Fellow

There was an inevitable cost to the ALCD of remaining a regulated body due to the need to set-up and fund the CLSB. There were two ways to cover these costs. The first was for existing Costs Lawyers – who can take advantage of the rights that are available by virtue of that status – to pay the additional cost. The alternative was to spread the cost as widely as possible across the full membership, including those who had no need to exercise such rights. The Council opted for the latter approach by upgrading everyone to Costs Lawyer. There was a perfectly arguable case for this decision as the cost to each member of the ACL remaining a regulated body had to remain proportionate to the benefits. However, this debate was never opened with the membership.

The October 2010 edition of Costs Lawyer magazine had the chairman state:

“The cost of regulation must be borne by the entire membership; there is therefore no alternative to the reform of the membership structure.”

It’s not clear why the second conclusion follows the first or why the first is even true. It certainly does not follow that all members must pay the cost equally if they do not all benefit equally. Why, for example, should someone who is retired but wishes to remain a member pay towards the costs of regulation at all?

The end result it that some members have seen significantly increased membership fees for no personal benefit. Some seem to have voted with their feet and have not renewed their membership. Others have renewed this year in the hope that something can be done but may well not renew next year if there is no change.

Now, the ACL should not be blackmailed by any one part of its membership. On the other hand, this is not really the time for the ACL to be shedding members unnecessarily.

My firm, thank God, doesn’t do legal aid work – and it is those who work in this area who are probably most effected. However, I tend to agree that fairness dictates that the cost of regulation should be borne by those, such as myself, who benefit from the rights, such as they are. It may, of course, be that redistributing the cost of regulation would more sharply focus the mind on whether the cost of regulation is worth the benefit. So be it.

Absolutely fascinating though this all is, what this post is actually leading up to – in a typically long-winded fashion – is what should a regulated costs lawyer look like? Is there room for those who practise just in the field of legal aid? Does one size fit all? These questions are now passing out of the hands of the ACL and moving into the hands of the CLSB. If the ACL wishes to persuade a larger proportion of those who work in costs to join the Association and become regulated, or non-members find they are forced to join (because costs already is, or becomes in the future, a reserved activity) this question needs to be properly explored. Which is what I will do tomorrow.

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30 5 06
 

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The upcoming Association of Costs Lawyers' election is turning into quite an interesting affair. (That’s a combination of words I never expected to write.)

This does remind me of my ill-advised campaign of 1978/79 for classroom milk monitor. Goodness knows, I’m not one to bear a grudge after all these years, but I’d swear that Julie Simpson tampered with the ballot papers.  And she was the teacher.

Oddly, half the debate to date seems to be focused on whether there should be a debate at all over the future direction of the ACL or whether such a debate should be in private.

I have had comments posted on the Legal Costs Blog that there should be no criticism of the current direction of the Council because this is what members voted for at the last AGM. Implicit in this is that that there should now be no debate about the future direction despite there being an upcoming election.

There was recently a general election and the government is now implementing what people voted for. That hardly precludes further political discussion until the next election and certainly would not preclude debate at the next election. (OK, maybe the last general election is not the best example of people simply getting what they voted for, but the general point hold good.)

It’s been suggested on the Blog that the ACL members’ forum is the best place for any debate, if there is to be one.  Then, on the forum, someone suggested that that is not the place for such a debate.

What I am conscious of in all this is that I am probably boring my regular readers (God bless both of you) to tears with all this talk about the ACL. This may be of some interest to that proportion of readers who are members of the ACL and they can join in the discussion further via the ACL members’ forum. The “manifestos” of other candidates are being made available there and I would be happy to answer any specific questions members may have about my views. This is an opportunity for members to clearly express their views on the future direction of the Association.

Like all those running for elected office, I promise to say whatever I think you’ll want to hear and I may therefore give entirely contradictory responses depending on what answer I think the questioner will hope for.

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