Legal Costs Specialists – Gibbs Wyatt Stone

Impact of Jackson on cost firms

Patrick Allen, writing in the New Law Journal, commenting on the Jackson reforms:

“Many smaller PI firms are closing, selling their cases at a discount to their WIP or being taken over. Firms are being hoovered up by the mega firms such as Slater Gordon. … If firms do have cash this is because they have no new business and they are in that brief cartoon moment before they fall to earth.”

The impact being felt by PI firms will quickly be felt by costs firms, although many have never been busier because of the time lag between new instructions being received by solicitors and the cases settling. Has the impact started to hit some costs firms yet?

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Simon Gibbs

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24 responses to “Impact of Jackson on cost firms”

  1. avatar
    Anonymous

    my concern is where the larger costs firms sweeping up trainees or introducing “training” (one firm in the NW gives 3 days and nothing after)to mass produce bills. The quality is non-existent, but the firms don’t care as its short term, 18 month plan to fleece as much in fees from the system before it goes pop!

    so in 18 months the legal profession will say good riddance to draftsmen, and there will be dozens and dozens of “trainees” looking for jobs, thinking they can draw bills or negotiate, and representing themselves (via the Agencies no doubt – I am sick of getting cvs on spec from Agencies telling me “2 years solid billing experience” when the most they’ve done is drawn “wp” schedules you couldn’t decorate the bathroom with) as experienced draftsmen

    Reply
  2. Money Money Money avatar
    Money Money Money

    Do you still stand by your prediction that ‘2013 is year of costs draftsman but 2014 will be crap’!

    If not what will 2014 be like and when will it be crap maybe 2015??

    Reply
  3. We will achieve maximum profit costs avatar
    We will achieve maximum profit costs

    I’ve just signed a 4 year lease on a new photocopier…

    Business is booming!

    Reply
  4. Truly Elephant Costs Professional avatar
    Truly Elephant Costs Professional

    I’ve been at my current firm for three years and haven’t been this busy the whole time I’ve been here.

    I realise that it will probably calm down in 6-12 months but I can’t see there being any huge issues given the nature of the work I do.

    Reply
  5. Rick Lardon avatar
    Rick Lardon

    One of the interesting consequences of this is that a lot of firms are relying on the rather suspect decision in Jenkins v Young Bros to “assign” CFAs on the acquisition of practices. If this works, it preserves the pre-April costs regime as the CFA remains the original CFA. But in PI cases there may be a really nasty sting in the tail. Many believe that the classification of the transaction in the Jenkins case was wrong, and that what was actually being done was a novation – i.e. in law the “assignment” actually created a new CFA on the same terms as the old one, except the solicitor counter-party was different. This was not very significant pre-1 April, but post 1 April it will be very dangerous in PI cases. For, if the CFA is indeed a novated CFA, it will be subject to the CFA Order 2013 and the mandatory cap on the success fee. Since the original, pre April CFA will not have this provision, then if that CFA is simply novated post 1 April then the novated CFA will be unenforceable. I see heavy litigation about this in the years ahead.

    Reply
  6. avatar
    Anonymous

    a similar issue (to that expressed by Richard @12.34) is where a minor reaches majority during the course of claim; what do you do with the cfa? a new one now cant recover a success fee from a PP, but why should the client be prejudiced by the simple act of turning 18? especially where his claim at that point could have been running for several years. Ive heard of and seen some novel approaches, but of course they are subject to interpretation and doubtless legal challenge

    the law of unintended consequences certainly, but frankly just something else to clog up the Appeal Courts for years to come – well done Jackson et al!

    Reply
  7. abcde avatar
    abcde

    the novation point is live but I think its a simple ratification on the “minor” point

    time will tell I guess

    Reply
  8. john allen avatar
    john allen

    My answer to the question is yes, to an extent. Until about 5 months ago, I used to do some good work for a fairly large firm who were bought up by a massive firm who I will not name. I certainly did not do all the work for that firm but they tended to instruct me in the larger cases.

    Once the buy out had been completed, that firm became part of the massive firm and had to send all their costs work to costs draftsmen/lawyers already appointed by the massive firm and I lost their business through no fault of my own. However, no complaints because that is life/business and I have filled most of the gap already.

    I should have used the word company above instead of firm but the gist of my message is the same.

    Reply
  9. abcde avatar
    abcde

    John, my only surprise is that the “massive firm” didnt try and do this in-house?

    Reply
  10. xyz avatar
    xyz

    Will the ACL follow the SRA’s example and close all the costs firms who cant prove they have PII cover ?

    Reply
  11. avatar
    Anonymous

    @ xyz

    the ACL has no power to do any such thing

    aside from which, they are not remotely representative of the whole costs profession and could not even ask non CL if they have PII, let alone make it compulsary

    Reply
  12. Ticklemebills avatar
    Ticklemebills

    xyz – I cannot see how they can. If you are CLSB reg’d you have to prove PI cover, but as we know, not all firms of draftsman are regulated. Anyway, the ACL is toothless – I was very tempted not to renew my membership this year.

    Reply
  13. avatar
    Anonymous

    Ticklmebills – I also had that dilemma. I’ve renewed it this year but we’ll see next year!! I’m not sure that I see the necessity.

    Reply
  14. avatar
    Anonymous

    the general consensus I’ve heard from most CL’s I’ve spoken to, is that they see the ACL as redundant and not listening to the wishes or needs of its member, so no more renewals

    what impact will that have on PI firms instructing costs firms I wonder?

    Reply
  15. The white book avatar
    The white book

    I’ve never been asked by any of my clients if I am a Cost Lawyer!

    Remember the ALCD ties and members turning up to detailed assessments proudly wearing them!

    Reply
  16. The white book avatar
    The white book

    Oh and the old ALCD members cards which you MUST carry with you at all times when dealing with costs!

    Reply
  17. Ticklemebills avatar
    Ticklemebills

    I looked at it as two CPD points for reading the magazine so cheaper than going on some poncey course. However, as soon as the CLSB pulls that, I say bye bye to the ACL and simply pay the ransom to the CLSB.

    Reply
  18. Costy McBillington avatar
    Costy McBillington

    I must admit that I would be questioning ACL membership if I had to pay the fees myself. I certainly wouldn’t be forking out nigh on £1500 for the two day jolly to London to listen to uninterested & overpaid speakers guess at uncertainties or tell us things we already know.

    Reply
  19. avatar
    Anonymous

    interesting link in the ACL mouthpiece, Litigation Futures, to the Legal Choices website, and the attack the CLSB make on non-Cl’s and encouraging people to avoid using “draftsmen” at all costs..

    pathetic, but relevant to Simons post, as to independent draftsmen or small firms work drying up – no wonder when faced with such drivel

    Reply
  20. The office cat avatar
    The office cat

    Just looked at the Legal Choices website and found that the CLSB are the only Regulator to make a sweeping and general statement on individuals they don’t regulate. It reads;

    “Costs Draftsmen are not regulated by the CLSB, and may not even have any legal qualification”

    If the words “Ethnic Minorities” replaced “Costs Draftsmen”, how acceptable would be their comments “. . . . . . . may not even have any legal qualification”

    The CLSB are blatantly and rather clumsily
    scaremonger and in doing-so they not only lose credibility but more importantly damage the businesses of their members who are in partnership with CD.

    They really should not be engaged in mudslinging and the ACL ought to weed out their extremists and use their resources to promote themselves in a positive manner as a service to the public. That particular market, unlike the traditional one, is growing.

    Reply
  21. Charles Wheatcroft avatar
    Charles Wheatcroft

    @The office cat on January 27th, 2014

    It would be fine if all CLs were beyond reproach but they’re not.

    As with solicitors, not all who make the grade are any good and as the SDT will illustrate, not all solicitors are honest..

    The CLSB should stick to championing their members rather than rubbishing non-members otherwise it smacks of desperation..

    Reply
  22. xyz avatar
    xyz

    Its ludicrous to think ACL/CLSB don’t realise that Costs Lawyers / Draftsmen are generally considered to be the runt of the legal profession.

    It’s effectively like taking out a advert to say that solicitor’s should only use a properly regulated office junior to do the filing and make the tea…

    Reply
  23. Costs Clerk avatar
    Costs Clerk

    Yawn, the cost lawyer/cost daftsmen (couldn’t resist) will never be stopped. How do you stop a solicitor dealing with their costs externally/internally?

    The answer, you cannot, unless you are saying every solicitor must prepare and deal with their own costs…

    Reply
  24. avatar
    Anonymous

    @ costs clerk

    Exactly! This is what the ACL & CLSB DONT GET!! They’re that busy trying to put down ‘unqualified & unregulated’ draftsmen, and make drafting a restricted activity, they totally forgot the basic principle that they are doing Solicitors work, and if the solicitor wants to employ a clerk to deal with costs or do it themself, it’s THEIR choice

    They also seem to forget, that the origin of costs clerks, was through people joining law firms and being taught the task in house.

    The landscape for fools whom hold on to their belief they are draftsmen (ACL or not), is very bleak indeed, and the actions of the ACL and CLSB will simply hasten the demise of a significant number of drafting practices and draftsmen (ACL or not)

    Reply

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