Association of Costs Lawyers’ Election

The upcoming Association of Costs Lawyers’ election is turning into quite an interesting affair. (That’s a combination of words I never expected to write.)

This does remind me of my ill-advised campaign of 1978/79 for classroom milk monitor. Goodness knows, I’m not one to bear a grudge after all these years, but I’d swear that Julie Simpson tampered with the ballot papers.  And she was the teacher.

Oddly, half the debate to date seems to be focused on whether there should be a debate at all over the future direction of the ACL or whether such a debate should be in private.

I have had comments posted on the Legal Costs Blog that there should be no criticism of the current direction of the Council because this is what members voted for at the last AGM. Implicit in this is that that there should now be no debate about the future direction despite there being an upcoming election.

There was recently a general election and the government is now implementing what people voted for. That hardly precludes further political discussion until the next election and certainly would not preclude debate at the next election. (OK, maybe the last general election is not the best example of people simply getting what they voted for, but the general point hold good.)

It’s been suggested on the Blog that the ACL members’ forum is the best place for any debate, if there is to be one.  Then, on the forum, someone suggested that that is not the place for such a debate.

What I am conscious of in all this is that I am probably boring my regular readers (God bless both of you) to tears with all this talk about the ACL. This may be of some interest to that proportion of readers who are members of the ACL and they can join in the discussion further via the ACL members’ forum. The “manifestos” of other candidates are being made available there and I would be happy to answer any specific questions members may have about my views. This is an opportunity for members to clearly express their views on the future direction of the Association.

Like all those running for elected office, I promise to say whatever I think you’ll want to hear and I may therefore give entirely contradictory responses depending on what answer I think the questioner will hope for.

Challenges to non-Costs Lawyers?

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?

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.

Costs Lawyer advocacy standards

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. 

Costs Lawyer advocacy – continued

I recently received a copy of an anonymous letter addressed to the Legal Services Board. A copy of the letter had also been sent to the Bar Council, Law Society and ILEX. The letter had apparently been written by a costs lawyer. The gist of the letter can be gathered from this sentence:

“My concern is that, in comparison to other regulated professionals, many Costs Lawyers lack the proper training required to act on behalf of clients and before the courts.”

The fact that Association of Costs Lawyers (ACL) members are writing to regulatory bodies complaining about the standards required for costs lawyers is indicative of the strength of feeling felt in some quarters.

When the ACL was considering whether to remain an approved regulator I was opposed to the idea. At the time I wrote:

“The proposed increases to membership fees may currently seem manageable, if disproportionate to the benefits. However, they are based on a current understanding of what regulation will require. As Popplewell notes: ‘at the time of applying for authorised body status, we did not know and could not have known the implications of the act’. Precisely. In the highly unlikely event that the ALCD did acquire protected body status, there would then be no way to go back. The ALCD would not be able to decide at some future date that the benefits no longer justified the costs and simply unregulate itself. 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?”

In Wednesday’s post we examined JAG’s proposals for criminal advocacy quality assurance scheme. JAG’s consultation paper said: “Further consideration will be given to the question of quality assurance in relation to other areas”. There is therefore every possibility that through JAG, or a regulatory body, a decision will be made to impose advocacy assurance standards on costs lawyers. Frankly, it is amazing the ACL has been able to grant (limited) higher rights of audience based on its current training scheme. It is entirely unknown what future standards might be imposed or what the cost of this might be.

I am grateful for those who have posted comments on the Legal Costs Blog explaining the history behind costs lawyers acquiring current rights. If I have understood correctly, the Ministry of Justice appears to have accepted that all existing members of the ALCD at the time, whether Fellow or Associate, were suitable for being granted rights of audience without further training or assessment. Given a sizeable number would never have conducted advocacy or had any advocacy training (eg many legal aid costs draftsman), all I can say is that the Ministry of Justice must have been asleep on the job.

The reason why the Costs Lawyer course is so short, and has become even shorter, is no doubt one of cost. To produce a training course that was adequate to produce no more than “competent” advocates (and not even at higher court level) has no doubt been viewed as prohibitively expensive. The next Costs Lawyer course year is priced at £300 (including VAT). With the best will in the world, you can’t provide a proper advocacy training course in half a day for £300.

The number of costs lawyers has probably now grown to 600-700. What percentage of these would pass a proper quality assessment test for advocacy at High Court or Circuit Judge level? I would hazard to suggest that a large number would not turn up to a formal assessment on the basis that they have a more realistic understanding of their abilities than the ACL or the Ministry of Justice. Now that responsibility for regulation of the ACL is switching to the Costs Lawyers Standards Board, who knows what they will decide. It would hardly be a surprise if they decided to impose an immediate accreditation process on existing costs lawyers, at least for those wishing to practice advocacy, to ensure consistent quality across the membership.

The same issues arise in relation to ACL’s goal of achieving protected body status. If achieved, there is no way of knowing, and little way of controlling, what requirements or costs of compliance may then be imposed on members.

The ACL had already admitted: “the costs of compliance with the Act will probably be disproportionate to the direct benefits gained by LSB regulation in terms of the exercise of section 27 and 28 rights by Costs Lawyers”.

September’s edition of Costs Lawyer magazine reported:

“The LSB noted that the ongoing costs of regulation are likely to increase the level of revenue required by the ALCD/CLSB, which in turn will probably mean higher practising certificate fees. It said: ‘It remains to be seen what the impact is on ALCD membership of increasing their fees to meet such costs. There may be consumer impact if increased cost leads to existing members moving away from regulation.’ In its action plan, the ALCD said this highlighted the importance of making costs-related work a reserved legal activity.”

This is the ultimate irony. The ACL recognises that the actual benefits of regulation may not justify the costs. It fears that members may vote with their feet and leave the ACL. Its solution is therefore to try to make membership compulsory for those who work in the field of costs. If the ACL ever finds it is obliged to ensure its members are subject to proper advocacy training and assessment the cost of regulation will rise substantially. It is locking itself into something that it clearly believes many of its members cannot afford or would not be prepared to pay for.

All this is happening at the same time as the recommendations contained in the Jackson Costs Review start to be implemented. At the moment there has been no news on the proposal to introduce fixed costs for the fast-track, other than extension of the RTA claims process. Given how simple and, amongst many, popular this step would be, it would be a miracle if this does not happen in the next year or two. If, and when, it comes, there are going to be heavy casualties in the costs world. Costs budgeting is not going to make up for the shortfall.

The costs profession is facing the legal aid shake-up that is also likely to seriously impact on the numbers practicing.

Post-Jackson the ACL is likely to find itself smaller and in a very different costs landscape. In so far as one of the aims of the ACL has been to remove the “cowboys” from the costs profession, the Jackson fixed costs proposals would largely achieve this through natural selection. If only high-value costs claims are left in the system only genuine costs experts are likely to survive. (For the love of God, let it be so.) The ACL may find itself stuck with an expensive regulatory system but with only a small number left to pay for it. Its recent decision to automatically upgrade Associates to Fellows, and then to Costs Lawyers on the back of a one-day course, takes the ACL in the opposite direction to the one it should be taking.

At the time, the ACL said:

“the relevant test has to be one of competence, not excellence. The ALCD would be failing in its duty to entrants and the public if it were to set the bar so high that only a select few could clear it”

Is “competent” by today’s standards going to be sufficient post-Jackson/post-legal aid meltdown?

Events outside the ACL’s control mean that there are only going to be a “select few” left. The Association has to strive for excellence if its members are to be among the survivors. There are too many excellent costs professionals outside the ACL for membership alone to guarantee survival.

I will try to bring these various rambling thoughts into something approaching a coherent whole in the next day or two.

Costs Lawyer standards

I used to have an eccentric aunt who would write angry and irrational letters to the local paper. I must take after my aunt as I keep finding myself using the Legal Costs Blog as the equivalent of an irate letter to the local rag.

On the subject of “angry and irrational”, the costs lawyer debate continues to rumble on with a recent edition of the Association of Law Costs Draftsmen’s Costs Lawyer magazine devoting large parts to the topic.

The debate obviously has a number of different strands to it, with interesting arguments being put forward in relation to different issues.

Let us assume for current purposes that those who previously attained Fellow status do indeed have appropriate knowledge of costs law (now and not just when they attained that status) and let us also assume that those who had attained Associate level (who have now been automatically upgraded to Fellow level) were equally “competent” in costs law.

Let us focus our attention on the issue of elevation of Fellows to costs lawyer status by virtue of simply attending the costs lawyer course.

When I attended the costs lawyer course last year, it covered three different areas over two days: Accounts, the CPR and Advocacy.

The Accounts section related to handling client money. Why, other than possibly obtaining a payment of account when acting for a litigant-in-person, a costs lawyer would want to be handling client money is a mystery to me. The ALCD would have better advised to have simply banned members from handling client money. This is something likely to end in tears, but that is another debate.

The CPR part of the course was a bit baffling. A half-day course was clearly wholly inadequate to teach the areas it tried to cover. If one assumes that those who had already reached Fellow status were already familiar with the CPR (hence the briefness of this part of the course) then the only useful purpose of including this section would be to explain exactly what a costs lawyer could or couldn’t do when exercising their new rights to conduct costs litigation. The course did not do this and I am still not 100% sure as to what the limits of the rights are.

We then come onto the other element of the course: Advocacy. As I mentioned when I discussed this aspect before, the advocacy element lasted one day and there was no test or other assessment process to judge the competency of those attending. There is no requirement for any previous advocacy training or experience. At the end of the course, those who had attended were granted rights of audience in relation to detailed assessment proceedings including appeals before a High Court Judge or Circuit Judge. The ALCD, or ACL (Association of Costs Lawyers) as we must now learn to call it, has been justifying the recent changes to its structure on the basis that these changes are largely inevitable as part of the modernisation of the profession. It is therefore interesting to examine what developments are occurring elsewhere in the wider legal profession.

The Joint Advocacy Group (JAG) was established by the Bar Standards Board, the Solicitors Regulation Authority and ILEX Professional Standards to develop a scheme to quality assure criminal advocacy across the three professions. Some will immediately say that comparisons with criminal advocacy are entirely misplaced. An individual’s liberty may be at stake in criminal proceedings which is infinitely more important than grubby disputes over legal costs. However, a single legal costs dispute can, and often does, run into millions of pounds. An individual may be bankrupted as a result of the legal costs at stake. A company can become insolvent. A firm of solicitors may collapse. Let us not underestimate the importance of what can be at issue. Further, JAG has said: “Further consideration will be given to the question of quality assurance in relation to other areas”.

JAG has recently published a Consultation paper on proposals for a quality assurance scheme for criminal advocates. It is worth exploring in some detail what they had to say about advocacy and how this appears to contrast with the ACL’s approach to the subject:

“Effective advocacy is fundamental to the justice system. Members of the public rely upon it for the proper presentation of their case and the courts are dependent upon it for the proper administration of justice. There is therefore a need for systematic and consistent quality assurance of advocates. … The proposed scheme therefore builds on the existing education framework for entry into advocacy to develop a rigorous assessment process to ensure that adequate standards are attained at the start of an advocate’s career.”

Higher rights of audience are granted by the ACL without any form of assessment process. There is a total absence of “quality assurance” or “assessment process” in the granting of these rights.

“Periodic re-accreditation will ensure that those standards are maintained as the advocate’s career progresses. This is complemented by an informal reporting arrangement for judges and others to refer poorly performing advocates for remediation or re-training.”

The ACL has no similar re-accreditation process (never having put in place an “accreditation process”) and had made no public announcement that it plans to do so.

“Regulatory intervention into the advocacy market has long been argued as unnecessary as market forces should eliminate the under-performing advocate. However, whilst market forces can generally be relied upon to identify the competent advocate, it is not necessarily the case that the less competent will not be instructed. In addition, it is increasingly uncommon for an advocate to be observed by the selecting professional. It has become apparent therefore that natural selection through market forces is not the answer to assure the quality of all advocates. The public interest and consumer protection requires a more proactive approach to assuring advocacy competence.”

This is probably a particular problem in relation to detailed assessment proceedings. There is probably no other area where the (professional) client is less likely see the advocate in action.

“Oral advocacy is a performance skill. As such, it must be both taught and assessed in a manner which reflects this. It follows that any system of quality assurance must focus on the assessment of actual performance if it is to provide an effective and rigorous assessment and accreditation of oral advocacy which addresses and tests the standards of the key requisite skills.”

“JAG proposes that the QAA scheme should include four levels of criminal advocate, similar to the levels used by the CPS in allocating advocates to cases. The final defined levels will be determined in the light of consultation responses and after discussions with the CPS in order to assist with harmonisation.”

This is interesting. One of the ACL’s justifications for upgrading Associates to Fellows was that there were too many membership categories. (In fact, the ACL is probably small enough that each member could be given their own title and the system would still work fine. How about “Associate Deputy Lieutenant Costs Lawyer, with Two Stars”?). So the ACL is going off in one direction just as the rest of the legal profession is going in the other.

“Advocates will be assessed to minimum standards of competency at each level. Levels in a regulatory QAA scheme are not therefore a means of recognising excellence but are present to ensure that advocates are operating at a level at which they are competent. Advocates will be assessed against the common advocacy standards at each level.”

Readers will recall that the ACL has justified the recent change in structure on the basis that “the relevant test has to be one of competence, not excellence. The ALCD would be failing in its duty to entrants and the public if it were to set the bar so high that only a select few could clear it”. In relation to advocacy, the ACL has not set the bar too low. It never set one in the first place and shows no plans to do so in the future.

“JAG proposes that all advocates at all levels should be subject to compulsory re-accreditation every five years.”

The recent decision to automatically upgrade all Associate members to Fellow is not directly linked to the problem of inadequate advocacy training. It has, however, highlighted it. The ACL is now granting higher rights of audience to a large number of additional members who previously did not have such rights.

Given the issue of professional standards in the ACL has moved centre stage in recent months, you can imagine my surprise by what fluttered out of a recent edition of Costs Lawyer magazine. This was an application form for a course titled: “Client Care, CPR and Advocacy (Costs Lawyer course)” – ie the course that promotes the newly upgraded ACL members to costs lawyer status. Other than the apparent change in subject from “Accounts” to “Client Care” (although the former is possibly covered by the latter) this is the same course I attended last year.

There was, however, one subtle change. The date for the course was 1 November 2010 (9.00am to 5.00pm). The two-day course has been reduced to one. I suppose the advocacy part may have been allocated a whole half-day. If it was the afternoon slot, it was probably 3 hours. Previously, when the ACL was striving for excellence, a full day would have been considered necessary. Now that the test has been set at a level of “competence”, a half-day suffices.

There appear to be one of two ways of viewing this issue:

1. Advocacy, at least in relation to detailed assessment proceedings, is something requiring little or no skill or experience. This includes costs appeals before High Court Judges and Circuit Judges. A level of “competence” can be achieved by those who may have had no previous advocacy experience in a 3 hour training session. Any form of initial or ongoing assessment is entirely unnecessary given how undemanding costs advocacy is. In this context, the ACL’s chairman’s comment that some of its members should be saying in big cases: “Don’t instruct a barrister. I can do this” makes perfect sense. The ACL granting higher rights of audience as though they were handing out Smarties is nothing to be concerned about.

or

2. Advocacy, at whatever level, is indeed a specialist skill that requires proper training and should be properly assessed. The ACL Costs Lawyer course should ensure that those standards have been met before granting higher rights of audience. The course is not fit for purpose.

There has been legitimate criticism in the past of those posting anonymous comments on the Legal Costs Blog denigrating aspects of the ACL. Let’s balance that now by having some non-anonymous comments from those who believe the ACL’s approach to advocacy standards is appropriate.

Unlawful and grotesque funding arrangement?

My latest Update: Costs for Solicitors Journal is now available to view online.  The “apportionment” subject is fraught with complexity and I won’t pretend this is meant to be a definitive analysis of the issue or that the two first instance decisions mentioned, where I was acting for the defendants, would necessarily be decided the same way by different judges.  This is an issue that many law costs draftsmen don’t appear to even recognise as a potential problem when drafting bills.

Also available is a further book review for Civil Costs: Law and Practice.

For non-subscribers, I think access is for only a limited period.

Jackson LJ’s attack on “grotesque” funding arrangements (see link) raises an issue I have been meaning to comment on for some time.  I am not at all sure that the funding arrangement in that case was even lawful.  This is based on the fact the CFA had been entered into where there was “no risk” of non-payment of ordinary fees.  There was no “conditional” event. 

In Arkin v Borchard Lines Ltd [2001] NLJR 970 Coleman J held:

“26. It is further argued that, if the February 2001 Agreement effected a variation of the CFA with retrospective effect, that variation would be unenforceable as being contrary to public policy. This submission is based on the foundation that, unless permitted by statute, conditional fee agreements are unenforceable on public policy grounds. That proposition is firmly founded on the unreported decision of the Court of Appeal in Awwad v Geraghty & Co 25 November 1999 (Lord Binghal LCJ, Schiemann and May LJJ). The relevant statutory provision is section 58 of the Courts and Legal Services Act 1990 in its unamended form. On the proper construction of that section the only permissible conditional fee agreements are those entered into before it is known whether the condition of success has been satisfied. The provision in section 58(1) that:

“In this section a ‘conditional fee agreement’ means an agreement in writing between a person providing advocacy or litigation services and his client which – (b) provides for that person’s fees and expenses, or any part of them, to be payable only in specified circumstances”.

clearly referred to circumstances which have not eventuated at the time when the agreement is entered into. The legislative purpose of the legalisation of such agreements was to enable those who could not afford to employ the legal profession to present their case on the basis that their obligation for fees and legal charges by their solicitors and counsel would arise only if the proceedings which were yet to be heard had been successfully prosecuted. It was no part of the purpose of the legislation to provide for agreements to pay fees and expenses which were entered into after the successful conduct of the proceedings.”

I did run a challenge, unsuccessfully, along these lines a while ago in the unreported case of Priest v CMT Engineering Insulation Ltd (SCCO, 13 July 2009) (see transcript).  Master Gordon-Saker was almost certainly correct on the facts of the case (judgment in default and a disease claim where causation might not be made out).  However, a “proper” judgment in a catastrophic injury claim is quite different.  I intend to write more fully on this topic in due course but I wonder what Jackson LJ would have made of this line of attack if the MIB had not already agreed to pay a 35% success fee. 

Association of Law Costs Draftsmen warning

The Association of Law Costs Draftsmen’s chairman Iain Stark was reported in Post Magazine (see link) as warning law firms against using uninsured legal costs advisors to draw up complex bills. This was on the basis that: “If a mistake or a delay in delivering the bill of costs is detrimental to the client, the client can – and will – sue the law firm for compensation and the firm will pass that claim on to the costs advisor. If the advisor does not have PI insurance the law firm’s own insurer will be picking up the compensation bill.” The ALCD therefore advised that only costs lawyers are instructed to undertake this work.

The importance of ensuring that the costs advisors that law firms instruct are properly insured should obviously not be underestimated.

As the chairman highlighted: “We have reports of several mistakes and delays in bills of costs resulting in compensation claims, some for hundreds of thousands of pounds”.

At this stage, ALCD members will be having a good chuckle to themselves. Costs lawyers, who are regulated by the ALCD, are indeed required to have professional indemnity insurance. However, they are required to have insurance with an indemnity of up to only £100,000. Not much good if a mistake has led to a loss of “hundreds of thousands of pounds”. You might have thought it appropriate for the ALCD chairman to mention this small detail.

Interestingly, I’m not sure the ALCD really understands exactly what it does require from its members in terms of insurance. Professional indemnity policies can have different definitions as to what is covered by the limit of the indemnity. For example: Costs lawyer has nervous breakdown. Thinks he’s Lady Gaga. Fails to attend five detailed assessment hearings. Client loses £50,000 as a result in each case. Client sues solicitors. Solicitors sue costs lawyer. Costs lawyer recovers from nervous breakdown and makes claim on insurance. Is the claim under the insurance policy going to be treated as five different claim, each well within the £100,000 limit, or a single claim (caused by the single event of a nervous breakdown) for £250,000 leaving a £150,000 shortfall? Different polices deal with this differently. The ALCD doesn’t specify which type of policy is required.

The ALCD also requires the insurance to include £100,000 cover for “loss of documents”. What does “loss of documents” mean? Is it meant to cover the cost of trying to recover or replace the physical papers themselves or the consequential losses of losing the papers (ie being unable to draft a bill)? The last time our firm renewed our insurance the ALCD was unable to give a clear answer as to what was required.

It goes without saying that £100,000 is entirely inadequate for costs lawyers doing anything but the most low value work, and my firm has always had cover that far exceeds this level, but I would not be surprised if many ALCD members carry no more than the minimum requirement.

It is understandable for the ALCD to promote the interests of its members (of which I am one) and to highlight the benefits of using one of its members. I’m not so sure that the majority of members would agree that the best way to promote members’ interests is to try to destroy the livelihoods of non-members by embarking on publicity campaigns to try to persuade solicitors that non-members are unsuitable to undertake costs work; but perhaps I missed that vote. However, if the ALCD is to go down that road, it needs to make very sure it is presenting its case on very strong ground. The issue of ALCD members’ professional indemnity insurance is not currently one of them. Indeed, it is one area the ALCD would have been better advised keeping rather quiet about.

The question I am left pondering is the following. Insurer follows Mr Stark’s advice and instructs costs lawyer to prepare “complex” bill of costs. Costs lawyer messes up. (Hey, it might happen). Client suffers £300,000 loss. Client sues solicitors. Solicitors sue costs lawyer. Costs lawyer makes claim on his insurance policy and insurer pays out £100,000 limit. Will the ALCD be pursued for the shortfall on the basis of statement made by ALCD chairman that instructing costs lawyers eliminates the risk of a claim being made on the solicitor’s insurance, when this is clearly not the case?  I wonder what the ALCD’s own professional indemnity policy covers. 

ALCD rethink?

Association of Law Costs Draftsmen member Sue Nash has written the following letter to ALCD members:

Dear All,

I am very aware having seen and read e-mail correspondence between members (as well as the GWS blog) as well as through discussions with fellow draftsmen, that there is a considerable amount of unease and dissatisfaction with the ALCD’s decision to effectively re-invent itself as the Association of Costs Lawyers. There was little or no consultation with the membership and indeed the decision must have been taken some time ago as the deadline for publication of the ALCD’s annual diary is usually late summer. A couple of letters have been printed in “The Costs Lawyer” (I am sure I am not the only one to still think of it as “The Journal”) but I am aware that several other letters have been submitted to the Editor but have simply not been published. The most recent edition of course made no reference to this issue at all.

Although the impact of the change of membership status is probably most keenly felt by those who deal almost solely with Legal Aid costs, there are other draftsmen who are also unhappy with the changes. I am aware that there has been discussion about the formation of a separate association to represent costs draftsmen (the Association of Law Costs Draftsmen perhaps?!) and whilst this might indeed be the solution that suits most people, I would be loathe to see a split profession as I do not believe it would be in the best interests of either costs draftsmen or costs lawyers.

Any representations to the Council will carry more weight if they are supported by a significant number of members and I have canvassed with a few others the idea of holding a meeting for everybody to air their views and to consider what alternatives we might be able to put forward to the Council. There is considerable enthusiasm for such a meeting and I have therefore provisionally booked a meeting room in London on Saturday 8th January between 11.00 am and 2.00 pm and invite you to attend. The cost will only be £30.00 to include lunch and all other refreshments and the time has been arranged to suit those who may have considerable distance to travel. The rooms are at 25, Southampton Building, London WC2A 1AL (very near the SCCO!).

Could you please let me know as soon as possible if you wish to attend, preferably by next Friday, 17th December. Also please can you pass on details to anyone else you know who may be interested in attending.

Sue

Sue@groupcosts.co.uk

 

Costs draftsman v Solicitor

Robert Males, writing in New Law Journal, expressed the view that:

“I believe the solicitor is the best person to deal with negotiation and settlement of costs.  If the matter proceeds to assessment then while the costs draftsman may be perfectly capable of putting forward the technical arguments in terms of costs recovery the conducting solicitor is in the best position to explain to a costs judge not only what has been done but why.”

Now, for a routine case there should be no need for the fee earner to attend to explain “what” and “why” as it should be self-evident from the papers and attendance notes.

I remember attending one assessment hearing where the fee earner did attend to “assist” the law costs draftsman on the other side who was meant to be conducting the assessment.  Every time an issue arose in relation to the work undertaken, the fee earner embarked on a long and impassioned explanation of why the work was essential.  The poor costs draftsman barely got a word in edgeways.

Why keep a dog and bark yourself?