The Legal Services Board has called on parliament to set up a single regulator for the legal services sector which would absorb all eight current frontline regulators (including the Costs Lawyer Standards Board).

Iain Stark, chairman of the Association of Costs Lawyers, sensibly opposes this change and was quoted in Solicitors Journal as saying:

“A one size fits all approach to regulation simply is not feasible. This is echoed by the Legal Services Act itself, which was designed with the big three regulators in mind and not the regulation of the wider legal community.”

These proposed changes highlight the problems I identified back in 2010 when the ACL was deciding whether to remain a regulated profession:

“Once regulated under the Act, there is no way of knowing what may be demanded in the future. Only a moment’s thought will reveal the LSB might demand almost anything at some future date. Does the ALCD really want to lock itself into a regulatory system over which it would have no control?”

When put to the vote, it did.

Stark goes on:

“The only reason for a single regulator would be with a view to extending the net wider than simply those current authorised providers and bring into the arena the current wealth of non-regulated professions that ply their trade within the legal sector and earn a living, such as claims management companies, process servers, witness statements takers and not forgetting law costs draftsmen.”

I’m not sure I entirely follow the logic of that. If one believes that all those working in legal costs should be regulated (itself a highly questionable proposition) there seems no reason why this should not be done by a dedicated regulator. It would be one size fits all for those in costs but not one size for all those doing anything remotely connected with the law.

The other day I mentioned that with the introduction of the new form N258 – Request for Provisional/Detailed Assessment it appeared the old form N258 had been renumbered D258. However, as a reader pointed out:

“I thought D258 was for family cases. Hence Applicant/ Petitioner/ Respondent appearing in the headings in the top right of the form.”

Re-reading the forms I think that must be right. It therefore appears that the old N258 has been entirely replaced by the new one.

That would not be a problem if those preparing the form had read the new rules properly.

The new form appears to require one of two options to be ticked:

“I confirm the costs claimed are £75,000 or less and I ask the court to undertake a provisional assessment.”

or

“I confirm the costs claimed are over £75,000 and I ask the court to arrange a detailed assessment hearing.”

The transitional provision dealing with the new Provisional Assessment scheme states at CPR 47.15(1):

“This rule applies to any detailed assessment proceedings commenced in the High Court or a county court on or after 1 April 2013”.

As the majority of detailed assessment hearings that will be requested over the next few months will relate to claims where the costs are under £75,000 but detailed assessment proceedings were commenced (ie an N252 was served) before 1 April 2013, and so provisional assessment does not apply, the new form is not currently fit for purpose in the majority of cases.

Ho-hum.

I continue to see, on a virtually daily basis, claims for costs that include work relating to funding, notwithstanding the clear judgment from the Court of Appeal.

The last time I mentioned this, readers replied with comments such as:

“Clients won’t let me leave it out”

and

“Why do the Defendant’s job for them? Keep it in I say.”

Now when I see bills including this type of claim, I raise a standard dispute along the following lines:

“It is noted that work is claimed relating to funding (eg items x and y) despite clear Court of Appeal authority from 2011 (see paragraphs 108, 114 and 145(vii) of Motto v Trafigura Ltd [2011] EWCA Civ 1150) that such work is not recoverable. It is clear that those responsible for drafting the Bill and checking the same are not aware of the distinction between recoverable and irrecoverable work and it is anticipated that other non-chargeable attendance time and routine communications with the Claimant have been included. The Defendant, adopting a broad-brush approach, offers x% of the attendance time and routine communications claimed. If the same is not accepted the Court will be asked to determine the recoverability of each and every item claimed and the Defendant will request that the cost of this task be paid by the Claimant in any event.”

Oh, and don’t expect to recover above Grade D rates for drafting your bill where you get the basics wrong.

It was previously understood that the 25% cap on damages, excluding damages for future care and loss, that can be taken from clients in personal injury claims would include any success fee charged by a barrister also acting under a CFA. This would, in theory, have avoided the situation where the client might lose 75% of their damages if there was a solicitor, junior and leading counsel all acting under CFAs.

The new Law Society Model CFA includes, what is presumably intended to be (as it is in square brackets) an optional clause:

“The maximum limit includes any success fee payable to a barrister who has a CFA with us.”

but does not explain how such a cap would be split with counsel and it would be interesting to see how the CFA with the barrister would be drafted to govern this.

However, now we have the Conditional Fee Agreements Order 2013 which contains no such restriction. When read in conjunction with the Courts and Legal Services Act 1990 (as amended) the 25% cap simply applies to “a conditional fee agreement”. There is therefore nothing to stop a client losing 75% of their damages in the situation given above.

Indeed, the Order does not even achieve the aim of limiting the amount any given legal representative can charge. There appears to be nothing to stop a firm of solicitors entering into one CFA that covers pre-issue work, a second CFA to cover work from the date of issue to the date of listing for trial and a third CFA to cover the period from listing to trial, with each having the 25% cap. If you then add in junior and senior counsel you could have a client liable to pay out 125% of their damages by way of success fee.

So much for consumer protection if that is what the Order was designed to achieve.

Provisional assessment is meant to take place without the judge undertaking the assessment seeing the receiving party’s file of papers.

The Senior Courts Costs Office has apparently recognised that this is costs cuckoo land and will be requiring receiving parties to file their full papers in all cases (a requirement the court is permitted to impose under the rules).

At first blush this is a step that both paying and receiving parties will welcome. However, there is a sting in the tail for receiving parties.

Costs Judges and Costs Officers are not going to have the time to wade through a box or boxes of jumbled papers looking for a copy of an advice from counsel or a relevant attendance note. It will be essential to ensure the papers lodged with the Court are in apple pie order. This probably means all relevant papers need to be fully bundled, indexed and paginated. This will be a time consuming task for bills of up to £75,000. The more challenges made the more papers need to be carefully identified in the index so the judge can quickly locate the item.

All this extra work comes out of the £1,500 maximum costs recoverable for the provisional assessment process.

District Judge Stephen Gold has been running an excellent series of articles in the New Law Journal explaining how the Jackson reforms will work.

On the subject of provisional assessment he wrote:

“Once it has been carried out, the court will send out precedent G with its decisions indorsed and its decision on the costs of the assessment”

That is clearly his reading of the rules. But, as I have written before, unless the judge has done the calculations (in which case why the provision requiring the parties to agree the total sum due based on the court’s decisions) how does he know whether a party has won on a Part 36 (or other admissable) offer and what decision on the costs of the assessment is therefore appropriate?

We will see some interesting decisions from the courts in the coming months.

Kings Chambers is running a costs conference (click link) in Birmingham on 11th April 2013. Price just £25 plus VAT.

Those responsible for preparing the Court Forms have not been slow to prepare for the Jackson changes.

A new N258 – Request for Provisional Detailed Assessment has been released. This is rather misleadingly titled as it also covers requests for detailed assessment where the amount claimed is over £75,000.

The old N258 appears to have been renumbered the D258 and should presumably still be used for detailed assessment proceedings commenced before 1st April 2013.

The new N258 repeats the wording of the new rules and states that the documents in support of the request should include: “a statement of the costs claimed in respect of the detailed assessment based on the assumption that there will not be an oral hearing; and the offers made (those marked ‘without prejudice save as to costs’ or made under Part 36 must be contained in a sealed envelope, marked ‘Part 36 or similar offers’” (this only applies where there is a request for a provisional assessment).

I am still at a loss as to the reference to the singular “statement of the costs”. This implies it is just the receiving party’s statement. But what if the judge opens the sealed envelope, notes a paying party has succeeded on an offer and decides to award them their costs? The judge is unable to assess them as no statement of the paying party’s costs will have been lodged. Given a paying party does not need to be informed that a request for a provisional assessment has been made, and there will be no notice of a hearing (as there is none), the paying party has no opportunity to lodge their statement in any event.

Not thought through properly.

The new and old forms can be found on Legal Costs Central.

Jackson Day came and went and the world carried on. (Unless, since writing this, North Korea has triggered nuclear Armageddon. In which case how are you still managing to read this and why does the latest from the Legal Costs Blog still feature on your list of priorities?)

Are solicitors ready? The Law Society has managed to publish a new model conditional fee agreement. This comes with the disclaimer: “This model agreement is not a precedent for use with all clients”. Some commentators are already raising enough concerns about the wording of the agreement that would suggest the disclaimer would have been better worded to say the agreement “is not a precedent for use with any clients”.

Is the Association of Personal Injury Lawyers ready? Well, they still seem to be fighting the last war (the anti-Jackson one that they lost) and are busy putting out press releases with the grossly misleading headline that “Public denied justice as ‘no-win no-fee’ ends”. As Kerry Underwood notes: “That heading is simply untrue”.

Is the Costs Lawyer Standards Board ready? Unless they publish something today (and one or two days notice might have been nice) amending the Statement of Rights we will have the first day of costs budgeting with Costs Lawyers having no “right” to participate in the same. I note the CLSB is pushing to extend its remit to cover Trainee Costs Lawyers. Perhaps it should prioritise on dealing first with the matters it already does have responsibility for.

Are Costs Lawyers ready? In an extraordinary open letter to the ACL Council published in Costs Lawyer magazine, Michael Bacon, President of the Association of Costs Lawyers, and Matthew Harman, immediate past President, complain that “there has been nothing at all by way of guidance or support from the Association” in relation to the Jackson reforms and urge immediate steps to “give [members] guidance on the new rules and the practicalities of implementation of the Jackson reforms”. Remember, Costs Lawyers are meant to be the “go to” professionals during this period of change. Bacon and Harman go as far as calling into question the need to continue their membership of the ACL as they “cannot see the value of remaining as members”. With friends like that…

Jackson’s final report was published in January 2010. One might have hoped a more seamless introduction and transition would have been possible.