Challenges to non-Costs Lawyers?

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We previously considered, in some detail, the article that appeared in the Law Society Gazette and Costs Lawyer magazine from District Judge (and Regional Costs Judge) Hill on the rights of audience of non-solicitor agents. The conclusion of the article was that a non-solicitor agent had no right to appear when the court is sitting in chambers. This would apply equally to law costs draftsmen who are not employed directly by a firm of solicitors and who are not qualified Costs Lawyers.

A recent article in Solicitors Journal (7 December 2010) from District Judge Mildred was of the view that the matter was not so clear:

“if a solicitor is exercising a degree of supervision over the work of the agent (and their instructions are often highly circumvented) then a solicitor’s agent may in those circumstances be exempt”

(District Judge Hill sits at Scarborough and Leeds County Courts. District Judge Mildred sits at Bournemouth County Court. Is this the famous “North-South Divide”?)

Having raised this matter informally with a number of Masters and Costs Officers in the Senior Courts Costs Office (one of those soft southern courts), it is clear that they are not persuaded by DJ Hill’s analysis. Perhaps more interesting, the last time I mentioned the costs judge was not even aware of challenges being made in the SCCO to independent, non-costs lawyer, draftsmen appearing. It was as far back as the Association of Law Costs Draftsmen’s National Conference in March 2010 that the ALCD chairman was encouraging ALCD members to challenge the rights of audience of non-members.

Where are the challenges? Are they meeting with success elsewhere?

Like many of the posts that appear here, some get written some time in advance and then get parked.  Having written the above post, what should there be in this month’s Costs Lawyer magazine but a further detailed argument from District Judge Hill explaining exactly why he thinks independent law costs draftsmen do indeed have no right to appear on detailed assessment?  This is likely to spur some challenges to non-Costs Lawyers.  I plan to write a detailed article as to why I, still, think this view is wrong.  However, this coincides with the Association of Costs Lawyers’ announcement that it plans a major recruitment drive.  If it has managed, contrary to what everyone previously thought, to gain a monopoly over advocacy work for draftsmen not working in-house, its job may have just become somewhat easier.

There’s never a dull moment in costs. 

On a related issue, I previously questioned the basis for the ACL’s view that Costs Lawyers cannot delegate their rights of audience to non-Costs Lawyers.  I’m still waiting for something solid in support of that proposition.   Section 13(1) of the Legal Services Act 2007 states that the question of whether a person is entitled to carry on an activity which is a reserved legal activity is to be determined solely in accordance with the provisions of the act.  Why would a non-Costs Lawyer appearing in court under the instructions and “supervision” of a Costs Lawyer not be an “Exempt Person” under paragraph 1(7) of Schedule 3?

How many law costs draftsmen are there?

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How many people work in the field of legal costs?

Let us ignore from the figures the army of support staff such as secretaries and IT experts, legal costs recruiters, those journalists and publishers who deal with costs publications, specialist costs counsel and even members of the judiciary.

(I should warn junior readers that ignoring members of the judiciary when in court is best avoided. I did try this once during a detailed assessment hearing and you can’t begin to imagine how irate the costs judge eventually became. You wouldn’t expect to hear that kind of language from a sailor.)

How many actual “fee earners” work in a full time or part time capacity in costs? How would one even begin to establish this number?

If memory serves me right, the Association of Law Costs Draftsmen, as it then was, did try to undertake a similar task. I’ve no idea what the results were but the problem is trying to know whether the results are even remotely accurate. The membership of the Association can be readily identified but there is little doubt that only a relatively small proportion of those who work in costs are members.

How many in-house costs draftsmen work for solicitors? So far as I know, the Law Society keeps no such data. One would have to write to every firm in the country to find out and get an accurate response from each. If, say, 20% responded (and it would be very surprising to get such a high return from a voluntary survey) there would be no way of knowing how representative this was. There are, probably, a growing number of costs staff working in-house for solicitors due to the growth of some specialist costs firms and some major defendant panel solicitors now dealing with “volume” costs work, in place of some of the costs negotiating firms who previously handled such work. I am also ignoring the large number of solicitors who deal with costs in their own cases, at least part of the time. Although these are obviously not costs draftsmen, the work they undertake probably equates to the work of 100’s of full time costs draftsman.

How may costs draftsmen work in-house for insurers and loss adjusters? This would be an even more daunting and probably impossible question to answer. Again, many claims staff will deal with costs on their own cases, at least in some cases.

How many costs staff work for the volume “costs negotiators”. The distinction between traditional law costs draftsmen and legal costs negotiators has always been a largely superficial one, with the nature of the work being undertaken often being virtually indistinguishable. Although the numbers post-predictable costs, are no doubt much smaller than in the past, the numbers remain significant and only a small number appear to be members of the Association of Costs Lawyer.

Then, how many independent costs draftsmen are there who are not members? How does one even begin to discover this? It is a relatively simply task to contact ACL members and try to discover how many non-members work with them or for them. But what about others? Barely a week goes by when I do not come across a new costs draftsman my firm has not previously dealt with. Many of these fall into the one man band category and have no web presence of any kind. Unless and until one finds oneself dealing with them, they are publically invisible.

When I come across a costs firm I have not previously dealt with I will often check their website, if they have one. I am regularly surprised by the number of firms I have never dealt with who appear to have a not insignificant number of fee earners. Often with few, if any, who are ACL members.

Try a Google search for “costs draftsman” or “law costs draftsman” and explore the outer reaches – page 10 and onwards. Then try the same with Bing and see the entirely new names that appear.

The reason I raise the question of how many people work in the field of legal costs is because of the issue of the extent to which the ACL is representative of the industry. This has always been one of the problems the Association has faced. When the numbers are limited, it faces the accusation of not being truly representative. When it has tried to “solve” the problem by providing alternative routes into membership (such as by interview) it then faces the criticism of dumbing down just to boost numbers. Without protected body status it faces the problem of persuading non-members to join. Without representing the wider industry it will struggle to attain protected body status precisely because of the fact that it is not fully representative. Catch 22.

I was in the middle of writing this post when the latest issue of Costs Lawyer magazine landed on my doormat. (The highlight of my social life.) This mentioned:

“The Association is also launching a major recruitment drive to bring onboard more of the 5,000 people working as unqualified and unregulated costs draftsmen”

Although I would have to suggest that the figure of 5,000 given is entirely speculative, to be fair it does not look entirely unrealistic.

This is against an ACL membership of 764 as of 31 December 2009, with rumours that the numbers are dropping.

Assuming the ACL’s guesstimate of the numbers of non-members is accurate, the Association is a long way from being truly representative.

So, beyond the section 27 and 28 rights that Costs Lawyers have, what does the ACL have to work with to start attracting further members?

1. The ACL has established a comprehensive training programme for students. The Association is incredibly fortunate to have Murray Heining as Educational Development Office. From time-to-time I am approached via the Legal Costs Blog for advice as to how to start a career in costs and I never hesitate in pointing them in the direction of the Association’s Modular Training Course.

2. The monthly Costs Lawyer magazine. I’ve no idea how Editor Neil Rose manages to find so much interesting content each month. (And I’m not just talking about the occasional article that I write.)

3. The Members’ Forum run by Jon Williams. The main part of this on-line discussion forum allows members to post and respond to technical costs queries. Barely a day goes by where a post doesn’t appear that is the intellectual equivalent of a fiendish sudoku or Times Cryptic Crossword puzzle. And one then gets to see the enlightening responses, some from the intellectual heavyweights of the Association. Access to this alone is arguably worth the price of membership.

4. The discounts that the Association has secured for members. The Lawtel discount, compared to the shocking amounts they usually try to charge, means membership virtually pays for itself. Discounts are also secured for costs training conferences including a 50% discount for most CLT conferences.

5. Oh, and you get a diary.

Not a bad platform to build from.

Morgan v The Spirit Group Ltd

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An interesting example of losing while winning was seen in the Court of Appeal’s judgment in Morgan v The Spirit Group Ltd [2011] EWCA Civ 68.

In a personal injury claim damages were claimed at around £40,000. The matter was allocated to the multi-track. At trial the judge awarded damages of £13,419.03 inclusive of interest for general and special damage. The Claimant presented a bill of costs claiming £99,206.29 inclusive of VAT and disbursements. The litigation had been conducted under a conditional fee agreement with a 100% success fee.

The trial judge, having heard costs arguments, considered that the claim had been, in reality, “a little fast track personal injury case which has been turned by the solicitor conducting the case into what is (if the expression be understood) a federal case” and that costs should be looked at as if the case had been allocated to the fast track. He was apprehensive about the expense of a detailed assessment of costs and, decided to take a robust course, which he set out at the conclusion of his judgment as follows:

“In order, therefore, to save the parties from themselves.. seems to me that the appropriate way for me to do justice in respect of the costs is to look at this case principally as what should have been a fast track case, and to look at the damages recovered – £13,419 – and to consider what it is proportionate to expect the defendant to pay. Now, absent the question of contingent fee agreements, I would have thought the very limit of what is reasonable for a defendant who has conducted the case properly to pay to a claimant by way of costs in a straightforward case such as this – the absolute limit would be £20,000 (it is probably more like £15,000). Having regard to the fact that there are some contingent fee agreements, and not with a view to satisfying the increase which they may incur, but simply having regard to the fact that they are there, it seems to me that substantial justice is done in this case if I make an order that the defendant shall contribute the sum of £25,000 to the claimant’s costs. That is the order which I make, which, as I say, is also to cover today’s hearing.”

The Claimant appealed. The Court of Appeal allowed the appeal to the extent that they decided the trial judge had failed to properly consider the costs on an item-by-item basis, as required even on a summary assessment. The costs order made by the judge, in so far as it fixed a figure for the Defendant’s contribution to the Claimant’s costs, was set aside with a detailed assessment of the costs ordered.

However, the Court ruled that there was no reason to interfere with the judge’s determination that the costs of the case should be approached as if it had been a fast track case (following Drew v Whitbread [2010] EWCA Civ 53) and the matter would go to the costs judge for detailed assessment on that basis. It will therefore be interesting to see if, on a robust detailed assessment, the Claimant recovers even as much as £25,000.

More damning, was the decision about the general conduct of the case. The claim had been handled by a solicitor who also happened to be the Claimant’s husband. The Court of Appeal summarised the trial judges’ views:

“the judge had made some very damning findings about the claim and the way in which the litigation had been conducted. As well as determining that it was a straightforward minor personal injury action that one would normally have expected to be allocated to the fast track, damages plainly being within the limit for that track, his observations included that the claim was ‘a “greedy” claim’, that the claimant’s view of the appropriate measure of damages was ‘wholly untenable’ and aspects of the damages claim ‘astonishing and wholly unsustainable’ and ‘truly breathtaking’, that ‘every stage [in the history of the case] involves enormous expenditure’, and that the ‘oppressive conduct of this case’ carried on even in relation to the costs issue.”

The Court of Appeal rejected the criticisms levelled against the trial judge by the Claimant in relation to such conclusions:

“The judge had formed his own view of the facts, with the benefit of having experienced the litigation at first hand in the form of the quantum trial and the subsequent costs hearing and there is no material upon which to say that he was not entitled to come to the views that he did, which were by no means confined to a concern that the claimant recovered less than she had hoped to recover. It was well within his discretion to take his conclusions on these matters into account in determining what order should be made as to costs. … The…observations of the judge in his costs judgment will also remain relevant for the costs judge.”

Something of a Pyrrhic victory for the Claimant and her solicitor husband then.

Hat into the ring

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One of the joys of writing the Legal Costs Blog is the freedom to widely criticise anything that takes my fancy without any sense of responsibility or need to offer constructive alternatives.

Like all the best things in life, I suppose this had to end.

Through a combination of cajoling and arm twisting, I have been persuaded to put my name forward for election to the Council of the Association of Costs Lawyers.

The usual trick to being successfully elected to any position is to ruthlessly court popularity. I fear it is far too late for me to adopt that approach as of the various comments that have been made of me since I first started to write the Legal Costs Blog, attempting to court popularity has not been one of them.

Over the next few days I will try to detail the aims that I would hope to work towards with the Council if elected.

However, I suppose the common theme will be the goal of ensuring that the ACL, or more importantly its members, will be ready for the post-Jackson/post-legal aid reform world. The costs profession is about to shrink dramatically. When it does, ACL members need ensure they are perfectly positioned to be amongst the survivors. This is a daunting task and there is very little time to act.

In the highly unlikely event that I were to be elected, I will expect merciless criticism of everything I do and absolutely no thanks in return.

Fee earner work?

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Is arranging a BT telephone conference fee earner work?

Should solicitors still expect to be able to charge hourly rates based on having full time, skilled, secretarial staff, when they no longer do?

Costs Lawyer advocacy standards

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In response to my tweet (for those of you who use Twitter you can follow us on @GWS_LAW) giving a link to my post on Costs Lawyer training standards, Neil Rose (editor of Costs Lawyer magazine, Litigation Funding and Legal Futures) responded:

@GWS_LAW But non-ACL costs draftsmen can appear before courts without any oversight/training – surely need to address that first?”

I did promise to try to pull together by thoughts on this issue, so here goes.

This post is concerned simply with the issue of rights of audience. Secondly, I am prepared to recognise there may be quite different considerations when dealing with the issue of members of the public instructing law costs draftsmen/costs lawyers directly. I am dealing with the, what I assume to be far more common, situation of costs lawyers being instructed by other lawyers.

Today I will deal with the limited issue of the “higher” rights of audience that Costs Lawyers have. To make this absolutely clear, if I have failed to do this before, these higher rights are limited to appeals before Circuit Judges and High Court judges, not higher. Nevertheless, this is a specific “right” granted by the Association of Costs Lawyers and not something that other costs draftsmen have.

I will proceed on the assumption that the reason why the ability to appear at this level is usually restricted is a desire to ensure an appropriate level of skill/experience from advocates. Although the courts may have been far more tolerant of advocacy standards before district judges sitting in chambers, this has been viewed as one level up.

Does the Costs Lawyer course ensure that those obtaining this right have such skill/experience? No and I have yet to hear anyone seriously suggest the contrary. I am not familiar with the details of the ACL’s current full training programme, so far as it relates to advocacy, and therefore cannot comment on whether this is robust enough, but the vast majority of those who have been granted Costs Lawyer status will have done so on the back of the Costs Lawyer course.

It is quite possible that I have blown this particular issue out of all proportion. The number of Costs Lawyers who actually try to use these rights is probably extremely small, although that doesn’t seem quite the point. A professional body should surely only grant rights to those who can show they are sufficiently competent. Not grant to all and then hope members have the sense to exercise this judiciously.

It has always been open to judges at this level, or above, to give “leave” to costs draftsmen to appear before them on a case-by-case basis. However, that is a matter for the judge in question rather than being a “power” transferred to a professional body.

The fact that the Ministry of Justice believed that all existing members of the ALCD, as it was, could be granted these rights without any further training (what were they told?) does not really seem to answer the criticism.

It looks increasingly likely, especially once ABSs come into force, advocacy regulation will receive a major shake-up, possibly with the Bar Standards Board taking over the role as sole regulator of all advocates.

Costs Lawyer status has got off to a bad start as a result of the current system which grants this right far too lightly.