Legal Cost Specialists

Posts made in June, 2010

Halliwells on the brink of administration

By on Jun 30, 2010 | 0 comments

The Law Society Gazette reports that Halliwells, with its significant insurance division, is “hovering on the brink of administration”. As the recession increasingly bites, with both claimant and defendant firms going under, it can only be a question of time before some law costs drafting firms start to be hit by the knock-on effect.  We can only hope that the apparent increases in personal injury claims will help compensate.  Unfortunately, it is unlikely to benefit those legal costs firms who lose their main...

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SCCO building to close

By on Jun 29, 2010 | 1 comment

The Law Society Gazette has reported that: "The Ministry of Justice [has] outlined proposals to shut nearly a third of the courts in England and Wales and confirmed it will be looking at ways to make ‘efficiency’ savings in the legal aid budget.  A consultation document details plans for the closure of 157 of the 530 courts in England and Wales – 103 of the 330 magistrates’ courts, and 54 of 219 county courts." Although it has not been officially announced, the Legal Costs Blog understands there are plans to move the Senior Courts Costs Office to a portacabin outside...

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Make my hourly rate a double

By on Jun 28, 2010 | 6 comments

When flying back from holiday the other day I was glancing at the on-board bar prices. (Despite living a multi-millionaire playboy lifestyle, I am too mean to pay for a flight that has a free bar.) They were selling 5cl miniatures of Bombay Sapphire gin (standard 40% strength) for £4 a bottle. By my maths, that works out at £80 a litre. The same flight was selling duty free (which unfortunately you are not meant to consume on the flight) Bombay Sapphire (at 47% strength: the good stuff) for £24 for two one litre bottles: £12 a litre. That, by any standards, is a significant price differential. In the field of legal costs there is a similar level of surprising price gap between the hourly rates that claimant representatives claim and the rates charged by defendant lawyers. Claimants argue that this difference is not evidence that they are overpaid – and therefore that the Guideline Hourly Rates are too high – but rather is due to a combination of the fact that defendant lawyers have guaranteed work volumes and that claimant lawyers have different acquisition costs due to advertising and/or referral fees. I will leave others to decide whether this explains the following example. This is simply one in my current case load and is far from being anything like the most extreme example I have seen. The case concerns a high profile, high damages sporting injury claim. The main fee earner (a Grade A) for the claimant is based in a Northern city (Band One). The rate claimed for 2007 is £285. A 100% success fee is claimed in addition. With VAT at 15%, the total claimed is £655.50 per hour. The main fee earner (also Grade A) for the defendant is based in Central London. The rate charged to the defendant insurers for 2007 was £160 (£184 with VAT). Both fee earners are specialists in this type of claim. So, a rate of £655.50 as against £184. It is no doubt fair to say that comparing a CFA funded case with a non-CFA funded case is something of an artificial comparison. Nevertheless, the base hourly rate claimed by the claimant’s solicitor is 46% above the Guideline Hourly...

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Hourly rates out of control?

By on Jun 25, 2010 | 0 comments

Ropewalk Chambers has an excellent article on their website by Andrew Hogan on how the current approach to hourly rates has led to a lack of proportionality and transparency in legal costs.  This article was first presented to the Association of Law Costs Draftsmen at this year’s annual conference and has also appeared in the Personal Injury Law...

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VAT and bills of costs – yet again

By on Jun 23, 2010 | 0 comments

I had hoped never to have to mention the dread subject of VAT again. But the inevitable has happened and the budget has raised VAT to 20% from 4 January 2011. At the risk of repeating myself, this will mean that from 4 January 2011 bills of costs should usually be drafted with up to 4 sections and different rates claimed for each, regardless of when the matter settles: Before 1 December 2008 – 17.5% Between 1 December 2008 and 31 December 2009 – 15% Between 1 January 2010 and 3 January 2011 – 17.5% From 4 January 2011 – 20% Of course, if you are lucky enough to be drafting a bill where some of the work stretches back to 1991 you will have a further period with 15% applying pre-1 April 1991. A bottle of champagne to the first reader who sends me a copy of a bill next year with 5 different VAT rates applied. The amounts now at stake make it crucial to get this right. One well known firm of law costs draftsmen (who shall remain nameless) has only just removed from the “latest news” section of their website information about the change in VAT rate. And they were referring to the 1 December 2008 decrease, not the 1 January 2010 increase. Apparently, the other day at a detailed assessment, the thorny issue of the correct approach to VAT arose and the Legal Costs Blog was mentioned by one of the law costs draftsmen present (not someone from my firm) and the Regional Costs Judge duly proceeded to print off a copy of my last post on the subject for all to study. I’m not sure quite what benefit was obtained from this but it reminds me of the story of the judge who had heard lengthy submissions from one of the advocates and informed him: “I’ve listened carefully to all you have to say but I am none the wiser”. To which the barrister replied: “Quite possibly Your Honour but you are now considerably better informed”....

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