Legal Cost Specialists

Posts made in June, 2010

Getting inside the mind of a costs judge

By on Jun 21, 2010 | 5 comments

The Legal Costs Blog has been a bit quite over the last few days. This is because I’ve been on holiday in sunny Turkey. Indeed, I’m writing this post lying on a sun-lounger by the pool with the laptop precariously balanced on my stomach and with a drink on the table beside me with an extra long straw to avoid any danger of accidentally performing a sit-up. However, my time has not been entirely wasted with my holiday reading material. In a previous post I commented on the problem that costs judges face in that the only bills of costs they are likely to see are the most unreasonable ones. Reasonable bills almost invariably settle. Judges perception of what is “normal” is formed by the most unusual bills that come their way. The following comes from Kevin Dutton’s fascinating book Flipnosis. Ask a colleague the following question: How many litres of diesel does it take to fill up a jumbo jet? Is it more of less than 500? Now ask another colleague the same question with a subtle twist: How many litres of diesel does it take to fill up a jumbo jet? Is it more of less than 500,000? Then ask each of them to give a concrete estimate of how many litres of diesel it really does take to fill up a jumbo yet. Almost inevitably, the first person will give a lower estimate than the second person, and probably by a very large margin. The reason for this is something called anchoring. Both colleagues will quite literally use the numbers you put in their head (500 or 500,000) as their frame of reference – anchoring points – on which to base their judgements. Dutton’s books goes on to describe how this concept of anchoring influences even judges, as shown in a study by German psychologists Birte Englich, Fritz Strack and Thomas Mussweiler: “The team took a group of experienced judges and asked them to read an outline of a case. The case involved a man who’d been convicted of rape. Once they’d familiarised themselves with the details, the judges where then divided into two groups. One group were to imagine the following: that while the court...

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Jackson Report

By on Jun 11, 2010 | 0 comments

A further definition from The (Alternative) Legal Costs Dictionary: Jackson Report n. A review of civil litigation costs in the English legal system undertaken by Lord Justice Jackson. The final report had a similar effect to a penalty shoot-out against Germany. It reduced grown men to tears. May decimate large swathes of the legal costs industry. Certainly decimated large swathes of the Amazon rain...

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Referral fee debate

By on Jun 4, 2010 | 1 comment

Following on from the Legal Service Board’s recent report into referral fees, which concluded that there was no evidence that referral fees caused consumer detriment, is the Legal Services Consumer Panel’s report which called for greater disclosure of referral fees and better regulation, but found that the payments do have a place in the legal services market and should be allowed to continue. The full story can be read on the Legal Futures website. So, is this all good news for claimant solicitors who favour referral fees and a kick in the teeth for Lord Justice Jackson who wanted a ban? Hardly. The really interesting part of the report commissioned by the Legal Service Board is the conclusion that despite referral fees in RTA claims being typically around £800 (where the solicitors’ recoverable profit costs will often be in the region of only £1,200), there is “no evidence of any detrimental effect on the quality of service arising from the payment of referral fees”. Read that quote again. Solicitors are apparently able to run typical RTA claims for around £400, presumably make a profit and with no drop in the quality of service. It is hard to imagine a finding more likely to strengthen Jackson LJ’s attempt to reduce costs to something more proportionate. The report also explained that typical referral fees in RTA claims have increased from around £200 in 2004 to £800 now. This has been a transfer of profit from solicitors to third parties. One argument in support of the continuation of referral fees is that it generates increased claims, through increased marketing activities raising awareness amongst the public, and therefore promotes access to justice. The basis for this claim in the LSB report was the upturn in RTA claims in recent years, despite the reduction in RTA accidents. The overall drop over the same period in relation to EL claims is dismissed out-of-hand by the report on the basis that EL claims are unconnected to referral fee generated marketing. The report, conspicuously, fails to mention PL claims. I therefore did their work for them and went back to the CRU data so see what that shows. For those interested, it can be found at Appendix...

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Wrong on Guideline Hourly Rates

By on Jun 1, 2010 | 0 comments

In a previous post I wrote that I was going to admit to being wrong on three occasions.  Here is the second confession.  Back in January, I predicted there would be no increase in the Guideline Hourly Rates.  That prediction turned out to be inaccurate and the rates were indeed increased in April.  However, as the Advisory Committee on Civil Costs observed, their decision to increase in line with the private wage index meant the 1.7% increase was “well below current RPI inflation and so will lead to a significant fall in the real pay of solicitors operating in this area”.  They also made clear: “we  have  yet  to  complete  our  analyses  of  the  issues  raised  in  our  paper  The Derivation  of  New  Guideline  Hourly  Rates”.  So what is that review likely to conclude?  The Senior Costs Judge, Master Hurst, commented at the Association of Law Costs Draftsmen’s National Conference that: “The chances of the advisory committee coming up with agreed hourly rates that would be universally accepted are absolutely zero”. ...

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