14 February, 2011
Filed Undercosts draftsmen
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.”
“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.
Click image to enlarge: