11 thoughts on “Funding costs

  1. As I read it, funding work was disallowed on the basis the CoA considered such to be part and parcel of overheads

    As it has until now not been so classified, clearly it couldnt have been accounted for along with all the other overheads. Therefore, it couldnt have figured as any part of the hourly rate calculation

    That being the case,and given that any reasonable solicitor will have to spent 2-3 hours minimum on funding work in even routine cases, can we now expect a revision of the hourly rates applicable ? Should indeed we even await such considerations from on high (which inevitably take forever), and instead be inviting the Court to excercise its discretion in view of the clear comments of the CoA in Motto, and provide a , say, 10% increase on rates at assessment?


  2. Given the Master of the Rolls has not approved an increase in guideline rates for 2011 the suspicion must be that the powers that be feel the rates were already too high.

  3. what about cases whereby funding costs are significant – Bolito as an example

    Surely in such circumstances, supported by the appropriate witness evidence, the court has to factor that in when making a rates decision?

  4. The judgment also said: “the expenses of getting business, whether advertising to the public as potential clients … should not normally be treated as attributable to, and payable by, the ultimate client or clients. Rather, such expenses should generally be treated as part of a solicitor’s general overheads or expenses, which can be taken into account when assessing appropriate levels of charging, such as hourly rates”

    So if a solicitor has paid a particularly hefty referral fee to bring in the claim or embarked on a particularly expensive advertising campaign (and this is one of the cases produced as a result) can the solicitor seek an enhanced hourly rate? Good luck with that one.

  5. I am not sure why this is so dismissive. Referral fees and advertising are already taken into account in deciding the guideline rates.

    The point made was funding costs never have been factored in when deciding the guideline rates but have now been deemed an overhead. Therefore I think that the court should take them into account. Referral fees and advertising were not be, no pun intended, referred to

    I would not be foolhardy to run this in isolation but if you have a case whereby funding costs are significant, eg bolito which I recall was circa £5k, then I would happily throw that into the mix with the 44.5 factors

    I do not think its a case of good luck needed, rather arguing correctly and picking the right cases to use it on

    and to quote the suggest para

    “Rather, such expenses should generally be treated as part of a solicitor’s general overheads or expenses, which can be taken into account when assessing appropriate levels of charging, such as hourly rates”

    therefore the court can take it into account

  6. I think the issue Simon addressed in his post is that bills of costs recived today, tomorrow, next week will still invariably include “funding costs” as they were incurred (and maybe even the bill was drawn) pre publication of the Motto judgment. If in such cases the hourly rate say exceeds guideline rates and they are quibbled alongside the funding costs the receiving party cvan perhaps argue as to the rates “ok, our rates are higher to subsume the loss of funding costs you are arguing” but, of course those rates were set pre-Motto and would ahve NOT included the factoring in of funding issues as those (at that time) would be expected to be recoverable inter-partes therefore the receiving party cannot apply hindsight and loses out twice (loss of funding costs and no argument as to the same being subsumed in hourly rates (albeit other factors can justify hourly rates abouve guidline of course)).

    Presumably Motto may bite re increased hourly rates only for retainers entered into after the judgment itself.

  7. People will continue to include them (funding costs) and wait for paying parties to make their argument, with the intention of conceeding them when the argument is made. That just seems to be how it is. Whether you should automatically cease to include them at all will remain subject to personal interpretation by draftsman.

    Some are of the view that they should be included because if you end up applying for and getting a Defaul Costs Certificate you will recover them in that instance.

  8. we now have a definative and binding judgment. If you include you should be prepared to run the point to the supreme court

  9. Suppose you have an award of costs which stated in terms that you get the costs “of and incidental” to the proceedings. Why would that not include the costs of arranging ATE?

  10. Pingback: Recoverability of funding costs |

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