Costs budgeting


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I had a very enjoyable morning last week in Derby giving a training session to Geldards solicitors on the practicalities of costs budgeting. Costs budgeting is, of course, expected to become the norm for multi-track matters come April 2013.

(Geldards is a firm that has lucked out having Nicola Mallen has a professional support lawyer. When I saw the quality of the training materials she had already produced on the subject of costs budgeting I almost cancelled. To increase the pressure, Professor Dominic Regan was speaking later in the day. I was just happy it wasn’t the other way around. Dominic is not an easy act to follow.)

As part of the training session I raised the issue as to who should normally undertake the costs budgeting exercise. At this stage I am sure they expected the hard sell to begin. In fact, quite the opposite. I am far from convinced that the majority of Costs Lawyers or law costs draftsman are remotely suited to the job of day-to-day costs budgeting.

It was therefore rather ironic when later that day I checked for updates on the Litigation Futures website to see Iain Stark, Chairman of the Association of Costs Lawyers, being reported as saying:

“The Jackson reforms will put a far greater emphasis on dealing with costs pre-emptively rather than after the event. This means solicitors will need to bring in costs expertise from the start of a case to ensure that the budget they will have to submit to the court at an early stage is realistic and defensible.”

I fear that costs budgeting will be to the cost profession what the PPI scandal was to the banking sector, only worse.

The only thing I would suggest to those considering offering a costs budgeting service in this area, and who hope to remain practising in 5 years time, is to set aside at least 10% of your annual turnover for the next 5 years to ensure you have a sufficient reserve to pay for professional indemnity insurance once the claims starts coming in.


7 thoughts on “Costs budgeting


  1. Warning: Use of undefined constant user_level - assumed 'user_level' (this will throw an Error in a future version of PHP) in /homepages/25/d110586513/htdocs/gwslaw/wp-content/plugins/ultimate-google-analytics/ultimate_ga.php on line 524
    Gary Stevens on said:

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    I agree entirely Simon. If commercial negotiation firms think this is going to be their life line then think again.


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    Anon on said:

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    Fantastic for in house cost departments though, (where the choice is to instruct the costs team or get the fee earner to complete precedent H)


  3. Warning: Use of undefined constant user_level - assumed 'user_level' (this will throw an Error in a future version of PHP) in /homepages/25/d110586513/htdocs/gwslaw/wp-content/plugins/ultimate-google-analytics/ultimate_ga.php on line 524
    Simon Gibbs on said:

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    Surely you mean fantastic for fee earners who can blame the in-house cost department when it all goes horribly wrong.


  4. Warning: Use of undefined constant user_level - assumed 'user_level' (this will throw an Error in a future version of PHP) in /homepages/25/d110586513/htdocs/gwslaw/wp-content/plugins/ultimate-google-analytics/ultimate_ga.php on line 524
    ... on said:

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    Presumably Claimant will all want to over-egg the Budget / estimate. Whilst Defendant’s will ensure their estimate only covers the bare bones of dealing with the claim. Whilst inexperienced DDJ’s will try to pick middle ground.


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    Anon on said:

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    The cost department will most likely blame the fee earners for unreasonably incurring costs over and above the budget which was, (of course,) reasonably drafted. Or for not telling the costs team of a change of circumstance in time resulting in some unrecoverable costs.


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    Anonymous on said:

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    Time recording systems need to be updated – it’s all about monitoring the costs. Give fee earners the ability to record against specific tasks / stages and it works. The budgets should be prepared by both the fee earner and the LCD together


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    Bof49 on said:

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    It will have to stay in-house, what costs draftsman can do it for a measly 1%

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