The defendant costs specialists

Posts made in March, 2012

The real rights of audience "myth"

By on Mar 21, 2012 | 4 comments

Following on from the decision in Kynaston v Carroll [2011] EWHC 2179 there have been calls in certain circles for entity regulation of costs firms. Currently the Costs Lawyer Standards Board (CLSB) regulates only individual Costs Lawyers. There appear to be a number of arguments being put forward as to why this needs to be done. Today I will focus on one limited aspect. As I understand the argument it goes something like this: Non-qualified costs draftsmen who are employed by a firm of solicitors may attend detailed hearings as they are employees of the firm. Such individuals are regulated indirectly by the SRA as the SRA regulates the firm. The CLSB does not regulate firms. If Costs Lawyers can delegate their rights of audience to non-Costs Lawyers there is no corresponding control over the non-regulated individual. We therefore need to regulate costs firms so all those wishing to exercise the rights given to Costs Lawyers are properly regulated. This is, in my view, a misreading of the Legal Services Act 2007, which governs rights of audience. Under the Act, there are two ways (so far as relevant) in which a person can exercise rights of audience. The first is if they are an authorised person and therefore have the right themselves (eg solicitors, barristers, Costs Lawyers). The second is where they are an “exempt person” for the purposes of Schedule 3. The relevant section reads: “The person is exempt if – (a) the person is an individual whose work includes assisting in the conduct of litigation, (b) the person is assisting in the conduct of litigation – (i) under instructions given (either generally or in relation to the proceedings) by an individual to whom sub-paragraph (8) applies, and (ii) under the supervision of that individual, and (c) the proceedings are being heard in chambers in the High Court or a county court and are not reserved family proceedings.” The crucial part to understand is that you are only an “exempt person” if you are instructed and supervised by an individual who is an authorised person (eg a solicitor or Costs Lawyer). There is no right to appear by virtue of being an employee of a firm of solicitors....

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"Rights of audience myth" myth

By on Mar 20, 2012 | 3 comments

Costs Lawyer magazine has unsurprisingly been devoting quite a lot of coverage and comment to the case of Kynaston v Carroll [2011] EWHC 2179 (click to read judgment). This concerned the thorny issue of rights of audience at detailed assessment hearings. The facts of the case, so far as relevant, are that an employee of a costs firms (who was not himself a Costs Lawyer or otherwise had his own rights of audience) was “working under the supervision” of a Costs Lawyer (who therefore did possess rights of audience) and attended a detailed assessment hearing heard in the Senior Courts Costs Office. The question that arose was whether the employee had the right to appear before the court. Master O’Hare said “yes”. The other side sought leave to appeal, which was refused on paper as being “wholly without merit”. On the further oral application for permission to appeal Mr Justice Burnett again refused permission on the basis that “the arguments have no merit at all”. In simple terms it was accepted that the employee of the costs firm fell within schedule 3 of the Legal Services Act 2007 and was therefore entitled to appear before the Court. In the alternative, Master O’Hare had indicated that even if no such automatic right existed, he nevertheless had the power to grant such a right on a discretionary basis and would have done so. Mr Justice Bennett recognised such a power and made no suggestion it would be inappropriate to exercise it in detailed assessment hearings. So we now know several things: 1. I was correct all along (smug mode) in my interpretation of the relevant act – see previous post on rights of audience. 2. Detailed assessment hearings are heard “in chambers”. 3. The term “in chambers” is not to be treated as meaning “in private”. 4. Costs Lawyers can, where there is proper supervision, delegate rights of audience (in detailed assessment hearings) to a non-Costs Lawyer costs draftsman. 5. There is no reason independent law costs draftsmen (ie non-Costs Lawyers who are not working in-house for a firm of solicitors) cannot appear in detailed assessment hearings where they have been properly instructed by a solicitor. This decision has produced calls...

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VAT rate on legal costs should be apportioned

By on Mar 19, 2012 | 3 comments

I continue to see, on a virtually daily basis, bills of costs and schedules that continue to wrongly claim VAT at 20% throughout despite the fact that some of the work was done prior to 2011. How long will it take for all Costs Lawyers and law costs draftsmen to understand how this works? It’s not as though I haven’t written about this often enough. Hopefully the decision of His Honour Judge Kay QC in Lloyd Fraser (Ply Chain) v Hutton (click for judgment) (13/9/11, Luton County Court) will help to reduce the scope for any argument on this subject. The District Judge as first instance had allowed 20% throughout on the basis the solicitors were entitled to elect what rate to charge. Allowing the defendant’s appeal, and making reference to Costs Practice Direction 5.8 (which states: “In any case in which an election to charge at the lower rate is not made, such a decision must be justified to the court assessing the costs”) it was held: “In my judgment the District Judge was obliged to have regard to the Costs Practice Direction. The argument was advanced that it was unreasonable for the receiving party here, the claimant’s solicitors, not to apportion. That decision, in the wording of the Practice Direction, must be justified. There was no attempt to examine what the justification was in this case for not apportioning to the lower rate. It was simply accepted as a right to do so because there was a power to elect. He was not directed to the provisions of the Costs Practice Direction, and therefore did not direct his mind to that very argument. It is a point that seems to me properly taken on the appeal, and as I have heard Mr Astor, he is not suggesting that the argument itself is incorrect. There is no justification put before the court at the hearing before the District Judge, or now before me today, as to why the receiving party would be justified in not apportioning so that VAT is charged at the lower rate. I am, therefore, satisfied that the District Judge was wrong in the conclusion the reached, and I allow the appeal.” [As an aside,...

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Costs Lawyer Standards Board?

By on Mar 16, 2012 | 3 comments

Why do we get the plural “Lawyers” in “Association of Costs Lawyers” but the singular “Lawyer” in “Costs Lawyer Standards Board? They don’t call it the “Solicitor Regulation Authority”. And surely there should be an apostrophe in there somewhere. Should it not be: “Costs Lawyers’ Standards Board”? This is the kind of stuff that keeps me awake at night...

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Expert assistance in assessing costs

By on Mar 15, 2012 | 3 comments

CPR 48.6 allows for a litigant in person to recover “the costs of obtaining expert assistance in assessing the costs claim”. CPD 52.1 states that those who qualify for the purposes of this rule will include a “Fellow of the Association of Law Costs Draftsmen”. The problem with this rule is that most Fellows have been converted to Costs Lawyers over the last few years and the category of Fellow ceased to exist entirely as of 31 December 2011. (And there is now no such thing as the Association of Law Costs Draftsmen – now renamed the Association of Costs Lawyers). Therefore, the rules as currently drafted refer to a category of lawyer that no longer exists and no longer allow for the recovery of costs that would otherwise have been recoverable. (The problem ceases to exist if a Costs Lawyer goes on record as acting for the litigant in person because they then cease to be a litigant in person. However, not all litigants in person may want this to happen and it potentially means that the costs of isolated work, such as a Costs Layer just drafting points of dispute, would not be recoverable by the litigant in person.) The Civil Procedure Rules Committee are fully aware of this rather embarrassing oversight in failing to update the CPD and I am sure we can expect the words “Costs Lawyer” to be substituted in place of “Fellow of the Association of Law Costs Draftsmen” in the October 2012 CPR amendments even if, inexplicably, this has not made it into the April 2012...

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