Court of Protection Costs – How to get paid and what happens to your costs?

As many hard-working solicitors are focused on ensuring their clients get the best service, it is possible for them to lose sight of their own costs. Here is a refresher guide to the procedure for getting paid.

The Payment Process

The process begins when the anniversary of the Order/matter completes, and the files are sent to your Costs Lawyer or Law Costs Draftsman; at Clarion, we offer the expertise of both. It is good practice to do this annually, as close to the end of the annual management year as possible (Section 6 of PD19B). This means that no costs are lost if there is an overlap period from the previous months or years.

Secondly, whilst the file is with your trusted Costs Lawyer or Law Costs Draftsman, the Bill of Costs is prepared. A Detailed Bill is required for matters with profit costs exceeding £3,000 and a Short Form Bill is needed for matters with profit costs lower than £3,000. There is no difference in the procedure for the bills – the difference in their names reflects their differing length and the amount of detail that they contain.

The Bill of Costs is then completed and, along with supporting documents, filed with the Senior Courts Costs Office (SCCO) for assessment, after which its returned by the SCCO to your lawyer.

Process for reassessment

Upon reviewing the assessment, if you are unhappy with it, you can lodge a request for reassessment with the SCCO. Here at Clarion, we are more than happy to review any assessments and consider an appeal; we can also lodge the request for reassessment on your behalf. Please get in touch with a member of our Costs Team to find out more.

The process for the request for reassessment is as follows:

  • If you are unhappy with the outcome of the assessment, you can request a reassessment within 14 days of the original assessment.
  • The Bill of Costs is returned to the Costs Officer for reconsideration in respect of the points appealed.
  • The Costs Officer will generally accept where they have made an error. They base their assessment on the points raised before them, so these points need to be justified; Costs Officers have been known to be unpredictable.
  • If you are still unhappy with the assessment, you can proceed to an oral hearing before a Costs Master, but be aware that this can be an expensive and timely process.

When you are happy with the assessment outcome, copies of the assessed Bill of Costs are served on the interested parties (if applicable) who have 14 days to challenge the Bill.

Once the assessment is finalised then a Costs Summary can be completed and filed with the SCCO, allowing the Costs Certificate to be drawn, and you to get paid.

Then the procedure will repeat, as and when the time period (annually) completes, although there are various scenarios which would result in changes to the process as described above. In these circumstances, get in contact with our team and we can assist, where necessary, to ensure that you are paid.

Joshua Sidding is a Paralegal in the Court of Protection Team of the Costs and Litigation Funding Department at Clarion Solicitors. You can contact him at Joshua.sidding@clarionsolicitors.com and 0113 222 3245, or the Clarion Costs Team on 0113 246 0622.

You can also take advantage of our free telephone advice service – available outside of office hours – by calling 07764 501252.

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Getting paid properly – Costs Estimates

Costs Estimates

Why provide an estimate of costs to your client in respect to their legal claim?

It keeps your client informed and therefore there are no surprises, this in turn manages your client’s expectation. This helps to avoid any dispute regarding the level of fees.

However, there is also the techy but important part!

Failure to provide information about costs and funding options for litigation is a breach of the Solicitors Regulation Authority Code of Conduct 2011 (SRA Code 2011),  your obligations are to “clearly explain your fees and if and when they are likely to change”.

Consequently, keep your estimate up to date, monitor the estimate and advise the client if the estimate requires changing – prospective thinking is the key.

The estimate must be clear and concise, must be worded in a way that is appropriate for the client and must be given in writing and regularly updated. The client should be provided with a detailed estimate, not just a ball park figure.

A solicitor is required to undertake a cost benefit analysis. The Code’s requirement in Rule 2.03 (6) is that “a solicitor discusses with their client whether the likely outcome in a matter will justify the expense or risk involved, including, if relevant, the risk of having to bear an opponent’s costs”.

It is essential that the cost-benefit analysis must be kept under review throughout the matter and reviewed with the client at key stages.

What is the impact of not providing an estimate?

Your client may argue that they would have given different instructions/or not proceeded with the matter if they had known: how expensive the claim would be, the length of time it would take, the level of their legal costs that would be recoverable from the other side and also their liability for the other side’s costs.

What if the client asks you to undertake out of scope work?

Explain that the estimate does not cover the additional work and provide a further estimate of the additional work. Advise the client if there is any risk that this work may not be deemed recoverable from the other-side. Failure to do so may result in those additional costs being disallowed.

Is a solicitor bound by their estimate?

Sort of!

If the client requests an assessment of their costs in accordance with the Solicitors Act, the estimate may be used as a “yardstick to measure reasonableness”. Any estimates that have been exceeded because they are simply wrong will be taken into account, together with the circumstances surrounding it, i.e. the reliance the client placed on the estimate and costs reduced accordingly.

Always provide a realistic estimate

Keep your estimate realistic at the outset. Even regular updating might not subsequently save a bad original estimate. The court’s view is that the first estimate is a critical piece of information for a client’s decision whether or not to embark on the action.

The Code’s requirements are for “best” information to be provided about costs. Therefore providing low estimates are unlikely to comply with the SRA Code of Conduct.

IN SUMMARY

Always provide a detailed estimate of costs.

Prepare a realistic estimate of costs.

Monitor the estimate and revisit with client throughout – costs/benefit analysis.

Identify and advise regarding out of scope work.

Sue Fox is a Senior Associate and the Head of Costs Management in the Costs and Litigation Funding Department at Clarion Solicitors. You can contact her at sue.fox@clarionsolicitors.com and 0113 336 3389, or the Clarion Costs Team on 0113 246 0622.

 

Clarion Costs Legal Updates

We have incorporated a collection of our blogs into a Blog booklet. The blogs were current at the

date of publication, however these may have now been superseded. Please visit our blog

(https://clarionlegalcosts.com/) for continuous updates on all costs law.

• Page 1 – Introduction

• Page 2 – Good news for those that prepare an accurate costs budget by Sue Fox

• Page 4 – Fixed Costs – the effect of acceptance of a Part 36 offer by Matthew Rose

• Page 6 – Payment on Account or Final Invoices? – another solicitor/own client costs

battle… by Andrew McAulay

• Page 7 – The Disclosure Pilot Scheme – what roles do costs estimates and precedent H

costs budgets have? by Sue Fox

• Page 8 – Proportionality – a flurry of cases by Andrew McAulay

Joanne Chase

• Page 9 – Part 36 offers, the basis of assessment, and knowing your expert by

Joanne Chase

Please click here

For any assistance, please contact the Costs and Litigation Funding Team at Clarion Solicitors 0113 246 0622.

 

 

Partial strike out of the budget – Page v RGC Restaurants Ltd !

Partial strike out of the budget in the case of Page v RGC Restaurants Ltd !

Be wary when preparing budgets, do NOT prepare a budget up until a particular stage, unless the court orders otherwise. In this case, the Claimant had decided to prepare their budget up until the PTR stage only, the Master found that they had not complied with the CPR and limited the budget to court fees only. The Claimant appealed the decision on the grounds that a budget had been filed, questioning the Master’s irrational approach of limiting the budget to court fees, claiming that CPR 3.15 (the fact that the parties had agreed the Claimant’s budget up to the PTR stage) trumps the sanctions imposed by CPR 3.14 and submitting that the default sanction should be dis-applied. 

On appeal, the Master found that this was partial non-compliance rather than full non-compliance. So rather than striking the full budget out, the court struck out those phases of the budget where forecast costs had not been provided.

It has to be said, the preparation of partial budgets makes assessing proportionality impossible, which is an essential part of costs management. 

In practical terms, this is important for split trials. My advice has always been NEVER to prepare a budget up to the first trial, unless the court orders otherwise as there is the risk that the court will deem this to be non-compliant and the budget may be reduced to court fees. We now have case law which provides guidance regarding the approach to be adopted, which is helpful.  

Sue Fox is a Senior Associate and the Head of Costs Management in the Costs and Litigation Funding Department at Clarion Solicitors. You can contact her at sue.fox@clarionsolicitors.com and 0113 336 3389, or the Clarion Costs Team on 0113 246 0622.

Good news for those that prepare an accurate costs budget

Following on from the Court of Appeal decision in Jacqueline Dawn Harrison v University Hospitals Coventry & Warwickshire NHS Trust [2017] WECA Civ 792 where the Court of Appeal found that:

  • The budgeted costs will not be departed from in the absence of a “good reason”;
  • Incurred costs do not form part of the budgeted costs;
  • The good reason test does not apply to those incurred costs;
  • The proportionality test can be applied to the final claim for costs, despite the proportionality test having been applied when the costs budget was approved.

As predicted, we have seen that in practical terms this is good news for those that prepare accurate budgets, but not so for those that don’t. The practical implications of this Court of Appeal decision has an impact on the recovery of your legal fees, as follows:

If the budget has not been exceeded:

  • The budgeted costs will be allowed in full unless a good reason is demonstrated to depart from the budget;
  • A detailed assessment of the budgeted costs can be avoided.

If the budget has been exceeded:

  • The budgeted costs will be restricted to the amount of the budgeted costs that were approved, unless good reason can be demonstrated to depart from the budget.

Win win for those with well prepared budgets. In addition, following approval of the budget, further consideration should be given to the budget throughout the lifetime of the claim. Examples of which are as follows:

Q1. Is it necessary to consider the budget in preparation for the trial?

Answer – yes.

If you win and your budget has not been exceeded:

  • Ask the court to order that the budgeted costs claimed are allowed in full;
  • Only incurred costs will be assessed by way of detailed assessment;
  • If the trial is less than one day, ask the court to summary assess the incurred costs. The court may assess the budgeted costs, however if the costs fall within budget, these should be allowed in full. Present your budgeted costs in phases to demonstrate to the court that the budget has not been exceed on a phase by phase basis;
  • Assess any potential good reasons that your opponent may raise to depart downwards from your budget and be ready to defend those arguments;
  • Ask for a payment on account of the incurred costs, these remaining costs being subject to assessment.

If you win and your budget has been exceeded:

  • If no good reason can be demonstrated to depart from your budget, the court should limit your claim for costs to the approved budget amounts;
  • Therefore establish a good reason to depart from the budget so that the costs can be assessed by way of detailed assessment rather than being restricted to the approved amount of the budget. This will provide you more of an opportunity to justify your costs and overspends;
  • Request a payment of the approved costs, payable within 14 days;
  • Request a payment on account of the remaining incurred costs, payable within 14 days.

If you lose and your opponent’s budget has been exceeded, their budgeted costs should be limited to the budget:

  • The winner can obtain costs in excess of the budget if they can show a good reason to depart from the budget, so be ready so defend any good reasons that the winner may raise to depart from the budget.

If you lose and your opponent’s budget has not been exceeded, their budgeted costs should be limited to the budget:

  • A good reason is required to depart from the budget, therefore if you can identify a good reason to depart from the winner’s budget you can secure a reduction to the winner’s budgeted costs.

Q2. What are examples of a good reason?

Answer – examples of a good reason to depart down are:

  • Did the winner undertake all the work that was provided for in the budget?
  • Were there any adverse costs orders, amount needs to be excluded from the budget?
  • Proportionality test – does the proportionality test that was applied at the CCMC require revisiting?

Q3. Why raise those good reasons at the trial?

Answer

  • Defers the assessment of costs to detailed assessment, if deemed beneficial;
  • Minimises the amount of the payment on account;
  • Minimise the amount of budgeted costs payable.

Remember, incurred costs are subject to detailed assessment in the normal way – ensure that the court is aware that this is only applicable to budgeted costs.

Q4. What role does the budget have in securing a Payment on Account?

Answer – the court will scrutinise the amount that was approved in the budget when determining the amount of the payment on account.

  • If the court refuses to order the payment of your budgeted costs in full, and opts to order a payment on account instead, request the following amounts:
    • Thomas Pink Ltd v Victoria’s Secret UK Ltd [2014] EWHC 3258 (Ch) (31 July 2014) – POA of 90% of budget;
    • Cleveland Bridge UK Ltd v Sarens (UK) Ltd [2018] EWHC 827 (TCC) – POA of 70% incurred costs and 90% estimated costs.
  • Be ready to defend any good reason to depart from the budget that your opponent may raise, this will assist in securing the maximum payment on account, conversely remember to raise any good reason arguments to depart down if you are payer rather than payee.

Q5. What role does the budget have at the mediation or settlement meeting?

Answer – the budget enables parties to be fully aware of their costs exposure, so an informed decision can be made when determining whether to settle. Update the budget for the ADR meeting so that costs may be agreed at the same time and be ready with the same arguments in terms of departure from the budget that would be applied at the trial.

Any questions? Please contact me at sue.fox@clarionsolicitors.com or call me on 0113 336 3389.

Points of Dispute and Replies: The Dos and Donts

CPR 47 provides that Points of Dispute and Replies should follow “as closely as possible” the format of Precedent G. CPR 47.9 allows for the paying party to raise disputes to points in the Bill of Costs drafted by the receiving party.

Points of Dispute ‘must be short and to the point’; parties are expected to make their point in a succinct and concise way. In the recent case of Mead v British Airways PLC, the Defendant spent over seven pages setting out one point of dispute. The claimant’s reply was two pages. District Judge Moss accepted the Claimant’s position and the point was dismissed. This is a clear example that a point can be raised and dealt with concisely without the need for disproportionate and lengthy argument. Indeed, in our experience less is often more and judges can be put off and confused by excessive Points of Dispute or Replies. It is not uncommon to see assessing judges commenting to the effect that Points of Dispute were too long and whilst this may not directly affect the outcome, it may well make the judge less well-disposed to a party in the assessment.

Practitioners tempted to set out Points of Dispute or Reply at great length should bear in mind the cautionary tale of Mylward -v- Weldon [1595] EWHC Ch 1, in which the court held that the matters in dispute could have been set out in 16 pages, rather than the 120 page bundle which the claimant’s lawyer had filed. The court ordered that the claimant’s legal representative should be brought to court, and the warden “shall cut a whole in the myddest of the {bundle}, and put {the lawyer’s} head through the hole, so that it hangs about his shoulders; and then shall lead him bare headed and bare faced round about Westminster Hall whilst the Courts are sitting and shew him at the bar of every of the three Courts within the Hall, and shall then take him back again to the Fleet {prison} and keep him prisoner until he shall have paid £10 to Her Majesty for a fine, and 20 nobles to the defendant for his costs in respect of the aforesaid abuse”.

That said, it is imperative for parties to explaining the reasoning as to why they dispute an item in a Bill of Costs. It is not enough to merely state that an item is disputed; the reasons for the dispute must be disclosed. The onus is on the parties to find the correct balance of getting the point across and providing the required information to ensure the point/reply is agreed with by the DJ.

When filing Points and Replies, it is imperative all parties know the relevant dates they are required to adhere to. For context, when a formal Bill of Costs is served by the receiving party, with an N252 will be served. This gives the date for which Points of Dispute are required to be served, which in general is 21 clear days following the date of service. The paying party is permitted to request an extension of time for this, and it is at the discretion of the receiving party to grant or deny the same and there are consequences for failure to comply. Whilst the Rules state that replies to points of dispute must be filed within 21 days of receipt of the points of dispute, there is no sanction for failure to comply. Therefore there is less risk to a receiving party which serves its Replies out of time, however it is possible for the court to impose a sanction (though this is not automatic). CPR 47.13 stipulates that the receiving party may reply to the points of dispute and the receiving party may do so within 21 days. This was supported in Pipe v Electrothermal Engineering Limited where it was confirmed that the receiving party is not limited to 21 days to respond.

The main differences between the paying and receiving party are as follows: should the paying party fail to serve points of dispute within the 21 days, there could be cost implications and the receiving party would be permitted to apply to the court for a Default Costs Certificate, which is an order that the costs claimed by the receiving party be paid in full (effectively a Default Judgment in costs). Whilst it may be possible to apply to set a Default Costs Certificate aside, there is inevitably a risk that the application will not be granted and it is likely that there will be a costs sanction to the receiving party even if it is.

In summary, parties should always follow Precedent G; always ensure points and replies are short and to the point. When undertaking costs proceedings, always be aware of the deadlines and dates to adhere to ensure you are not subjecting your client to unnecessary costs.

Are you J Code ready?

The J-Codes are a set of electronic codes proposed by Jackson LJ, where time is recorded in phase, task and activity. These codes were first published in July 2014 and over 3 years later the MOJ have now included guidance in their 92nd update to the CPR regarding phase, task and activity time recording. The MOJ have decided not to adopt the full J-Code structure proposed by Jackson LJ and have published an alternative and apparently simpler version of the Phase, Task, Activity (PTA) approach. That said, J-Codes can still be adopted or the Phase, Task, Activity (PTA) method can be used, it is down to choice.

The electronic bill of costs is mandatory for all Part 7 multi-track claims from 6 April 2018 and therefore Phase, Task and Activity codes (PTA codes) are crucial.  J Codes/ PTA codes however are not mandatory, although it is expected that any additional costs associated with the drafting of the electronic bill of costs due to PTA code time recording not being adopted, may not be recoverable on an inter-partes basis.

This only applies to work undertaken from 6 April 2018.
Recording time in line with phase, task and activity will at last enable budgets to be monitored with ease.

Any questions? Please contact me at sue.fox@clarionsolicitors.com or call me on 0113 336 3389.