Monthly Archives: January 2011

Costs Lawyer standards

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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.

End of the legal costs industry?

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In an earlier post on the Young Report, I predicted that with implementation planned for April 2012, the full impact would start to be felt about six-months later. I can now be more precise. The legal costs industry will be killed off on 21 December 2012.

This is what the ancient Maya predicted (see link)

Now, the Maya’s prediction may be pure coincidence, but you should never underestimate the wisdom of the ancients…

RTA Claims Process uncertainty?

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Litigation Funding recently reported on the Motor Accident Solicitors Society annual conference which had heard of problems concerning uncertainty surrounding the RTA claims process. These included whether bus passengers or multi-vehicle accidents are in the process.

It’s a while since I looked at the rules in any detail but what is there to suggest that such claims even might be excluded from the process?
 

Legal Costs Central upgrade

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We’ve enhanced the Playtime section of Legal Costs Central with a Selected Cocktail.

My first recommendation is the Classic Cocktail. I can’t believe that I’ve only just discovered this great drink.

If you don’t have maraschino liqueur, I suppose you could substitute any cherry liqueur, or even crème de cassis at a pinch.

If you don’t have any cognac, you could use ordinary brandy, or Armagnac, or even dark rum at a stretch.

There is probably no harm using lime juice in place of lemon juice.

In place of Grand Marnier you could use Cointreau or Triple Sec.

If your drinks cabinet is looking particularly bare, you could substitute the maraschino liqueur, cognac and Grand Marnier for an equal amount of any other spirit to hand and not bother with the lemon juice.

If you don’t have a martini glass to serve this in, any glass, cup or mug is probably fine. One can be too precious about the art of cocktail mixing.

(Please remember to drink responsibly.)

Over the next few weeks/months we plan to bring you a few somewhat more serious enhancements to the Legal Costs Central. Have you set this as your Homepage yet?

Cutting legal costs

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Now that judges are being asked to satisfy themselves that any travel they undertake is necessary, and consider very carefully whether video conferencing would be an appropriate alternative in the new age of austerity, can we expect the courts to take a similarly robust approach to conferences by solicitors with counsel and experts?

Perhaps Lord Justice Brooke’s comments in Black v Pastouna & Pastouna [2005] EWCA Civ 1389 will be given appropriate weight:

“I would add that it is incumbent on those advising parties appearing before this, or any, court to take all the steps they can in accordance with CPR Rules 1.1 and 1.3 to reduce the cost of the proceedings. This includes taking advantage of such cost-saving facilities as video-conferencing whenever they are available and it is appropriate to use them.”

CFAs for beginners

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Following in the wake of Lord Justice Jackson’s comments in Pankhurst v White [2010] EWCA Civ 1445 concerning “grotesque” funding arrangements, legal expenses insurer DAS has decided this represents a good opportunity to attack Jackson’s costs proposals.

Kathryn Mortimer, head of legal services at DAS, said in a widely reported Press Release:

“Deduction of legal costs from damages is at the centre of the reforms proposed by Lord Jackson. In fact, had his reforms already been in place, the solicitors in this case could have charged their client up to a quarter of his damages, at least 10 times the amount that was due under the funding arrangement that Lord Jackson has described as ‘grotesque’”

This misses the point entirely. The terms of the CFA entered into by the solicitors in Pankhurst did not put them at risk in relation to recovery of their base costs. In truth, this was not a CFA as recognised by common sense or, hopefully, the law. It was “grotesque” for the solicitors to enter into this type of agreement in these circumstances. It would be equally “grotesque” to enter into this type of agreement if the Jackson reforms happen.

Jackson LJ’s criticism of the funding arrangement was of solicitors seeking a success fee when there was “no risk”. The criticism would be the same whether the success fee is being paid by the defendant as costs or by the client out of damages.

Ms Mortimer said: “the catastrophically injured client was able to obtain access to justice under existing CFA arrangements, which will be fundamentally undermined by Jackson’s proposed reforms”.

Quite how this made it into a DAS press release is a mystery, although perhaps revealing. Despite CFAs being lawful since 1990 and between the parties recovery of success fees being allowed since 2000, it appears that a senior figure in the anti-Jackson campaign still does not understand what a CFA is for or how they operate.

Lesson One: CFAs for beginners

Where a client instructs his lawyer on an ordinary private retainer, the client carries the full risks of the litigation. Regardless of whether the client wins or loses his case, he is still liable to pay his lawyer’s fees in full.

A Conditional Fee Agreement (CFA) is designed to pass the litigation risk, in full or in part, to the lawyer. If the client is unsuccessful the lawyer either receives nothing (a no win no fee agreement) or receives a reduced fee compared to what the lawyer would otherwise have received (a discounted fee agreement).

In exchange for accepting some, or all, of the litigation risk, the lawyer can charge a success fee. The success fee will, in theory, allow the lawyer to recover in successful cases a sufficient “uplift” to compensate them for the lost or reduced fees in the cases that fail.

However, the fundamental point of a CFA is that there is a “condition” that has yet to be satisfied. Entering into a CFA when the only condition has already been satisfied, or is guaranteed to be satisfied, is absurd. It is the equivalent on betting on a horse to win, when the race has already been run and the horse come in first. In the Pankhurst case, the claimant had judgment on liability before the CFA was entered into. Unlike the terms of some CFAs, it appears the solicitors were not at risk in relation to Part 36 offers.

If the client lost on a Part 36 offer at a quantum trial, as indeed he did, the client would still be liable to pay his solicitors’ normal fees.

If the client won on a Part 36 offer at a quantum trial, the client would be liable to pay his solicitors’ normal fees plus a success fee.

In both situations, the solicitors would recover their normal fees (out of his damages if necessary). This is the same as how an ordinary private retainer works. There was no transfer of risk from the client to the lawyer. The client had all the risk.

Any success fee chargeable by the solicitors was pure windfall. There was “no risk” to compensate them for.

(The matter would have been quite different if the solicitors had been at risk in relation to Part 36 offers.)

How then, did the funding arrangement enable the catastrophically injured client to “obtain access to justice”? How will the Jackson proposals, if implemented, “fundamentally undermine” a client’s ability to obtain access to justice in this situation?

The client already had a “won” case at the time the CFA was entered into. The nature of the CFA meant he was going to have to pay his solicitors’ normal fees regardless of whether he beat any Part 36 offer at a quantum trial. At best, the agreement was one that allowed for postponement of payment of fees until he recovered his damages. This did not require a CFA. In fact, the CFA did contain a “postponement” charge that, on the facts of the case, amounted to £35,810.

The terms of this CFA were to the effect that the client was privately funding the claim from his future damages. The solicitors would be entitled to their full normal fees for simply acting for the client, regardless of the outcome, but receive a potential 100% increase on those fees to compensate them for… Well, nothing.

If the anti-Jackson camp can explain how this CFA benefited the client in terms of access to justice, please let us know. Otherwise, the charge of “grotesque” will have to stand.

Oh, and Happy New Year.