Tag: costs

Avoiding Challenges to your Costs II: What is an Invoice

Joanne Chase3 Comments

Until an invoice is delivered in accordance with the Act, a solicitor does not have any right to take client money. Doing so could (and probably would) be a breach of Rule 5.1 of the Solicitors Accounts Rules. Unfortunately there is no further explanation within the Act as to what a statute invoice is or what information it must contain.

This is the second blog in a series covering various aspects of solicitor / own client relationships. You can find the other blogs here:-

Avoiding Challenges to your Costs I: Invoicing Clients

Avoiding Challenges to your Costs III: Talking about Money

Avoiding Challenges to your Costs IV: Time Recording

Whether or not an invoice is a “statute” invoice is determined with reference to the authorities. There are a number of factors which the Court will take into account, but it is important to recognise that this is not a “check box” exercise. The mere fact that one or more factors are missing will not automatically mean that the invoice is not a statute invoice.

The following factors will be relevant:-

  • If the invoice is raised before the conclusion of the case, whether the solicitor is entitled to charge their client at that point (Underwood, Son & Piper v Lewis [1894] QB 306 A.L.). There is a rebuttable presumption that a solicitor has no right to invoice on an interim basis unless there is a contractual right to do so (Chamberlain v Boodle & King [1982] 1 WLR 1443 and Davidsons v Jones-Fenleigh [1980] Costs LR 70).
  • Whether the invoice contains a statement that it is a statute invoice and is final for the period covered (Adams v Al Malik [2014] 6 Costs LR 985).
  • There should be sufficient information within the bill to identify the work to which it relates (Ralph Hulme v Gwllim [2002] EWHC 9034 (Costs)). This could include a date range or breakdown of costs.

A final invoice also may only include work actually done, and cannot include a claim for future time. Any invoice which includes a claim for future time is therefore likely to be deemed to be an invoice for a on account of costs.

In summary, a client invoice should be clear that it is final for the period covered and identify the work done. Solicitors’ retainers should be careful to incorporate terms entitling them to raise interim invoices during the case.

You can find out more about our services here or you can contact the Costs Team at CivilCosts@clarionsolicitors.com

Avoiding Challenges to your Costs I: Invoicing Clients

Joanne Chase3 Comments

Recently we have seen a steady rise in cases brought by former clients against firms seeking refunds of their legal fees. These claims often stemmed from problems with the invoice sent to the client at the end of the case. In some cases invoices had never even been sent. This blog deals with the requirement to send an invoice, and the consequences for not doing so.

This is the first blog in a series covering various aspects of solicitor / own client relationships. You can find the other blogs here:-

Avoiding Challenges to your Costs II: What is an Invoice

Avoiding Challenges to your Costs III: Talking about Money

Avoiding Challenges to your Costs IV: Time Recording

Section 69 of the Solicitors Act 1974 states that a solicitor may not bring any action to recover any costs due until after one month from the delivery of a bill of costs. These are often called a “statute bill” or “statute invoice”. The requirements for a statute invoice are set out at section 69(2) and are deceptively simple – the invoice must be signed and delivered. The meaning of “signed” and “delivered” are set out at s69(2A).

Until an invoice is delivered in accordance with the Act, a solicitor does not have any right to take client money. Doing so could (and probably would) be a breach of Rule 5.1 of the Solicitors Accounts Rules.

Unfortunately there is no further explanation within the Act as to what a statute invoice is or what information it must contain. Whether or not an invoice is a statute invoice is therefore regulated by case law. This is a large topic and is explored further in the second blog in this series Avoiding Challenges to your Costs II: What is an Invoice?

It is not uncommon to see solicitors fall foul of the Rules, particularly where the claim has been conducted on a CFA and / or is subject to fixed costs. In those cases invoices are often either not sent, or are not compliant.

The danger of not sending a compliant invoice are significant. Not only is it likely to be a breach of the Accounts Rules, but it creates a serious risk that former clients could seek repayment of costs paid years ago. Section 70 of the Solicitors Act sets time limits for a client to seek an assessment of their own solicitor’s bill. In short, where a bill was paid more than 1 year ago, the Court has no jurisdiction to assess costs at all. However, if a compliant bill was never sent, then that time limit never begins to run. Therefore, the client could at any time request a compliant bill (and can apply under section 68 of the Solicitors Act to compel the solicitor to deliver one) and then seek assessment.

The dangers of a failure to raise a compliant bill should therefore be obvious: it creates an open-ended liability where any client could seek delivery of a bill years after the conclusion of the case. Those costs also become at risk of changes in the law. For example, the case of Belsner -v- Cam Legal Services Ltd [2020] EWHC 2755 (QB) shook the personal injury world by creating a requirement for a client to give “informed consent” to paying more than was recovered from the opponent in costs. It would be bad enough for such a judgment to create a risk on every live case in a solicitor’s caseload, but far worse if it were to a create a risk on every case they had ever worked on.

In summary, solicitors must always invoice their client before taking money. This applies whether the case is privately funded, on a CFA, DBA, subject to fixed costs or any other funding structure. Failure to do so creates significant risks to the firm of future challenge.

You can find out more about our services here or you can contact the Costs Team at CivilCosts@clarionsolicitors.com

Pre-Judgment Interest

Andrew McAulayLeave a comment

s17 of the Judgments Act 1838 and CPR 44.2 (6) (g) allows the High Court to award pre-judgment interest on costs.

In the writer’s experience, the award of pre-judgement interest is only common in the Commercial Court. It is usually awarded on long-running cases where costs have been paid on a private fee paying basis and there has been a large outlay on costs. The interest will usually be awarded from the date that the successful party paid the law firms’ invoices.  There must be a good reason to award pre-judgment interest, but there is no requirement to establish exceptional circumstances. The comments of Lord Justice Waller in Bim Kemi AB v Blackburn Chemicals Ltd [2003] EWCA Civ 889 summarise the position well:

‘…….in principle there seems no reason why the Court should not do so [i.e. make an award of pre-judgment interest] where a party had had to put up money paying its solicitors and been out of the use of that money in the meanwhile’.

In the recent of case Puharic v Silverband [2021], the Court awarded pre-judgment interest at a rate of 2% over base rate. In the writer’s experience, awards of between 1 and 2% are common.

Pre-judgment interest is a tool that is not routinely considered by litigators. It is important that litigators have pre-judgment interest at the forefront of their minds when dealing with the issue of legal costs following a final hearing. The remedy helps to put the successful party back in the position it would have been in had the litigation not been necessary. If the successful party had not had to pay their lawyers, they would have utilised the money elsewhere or would not have had to have incurred the costs of borrowing it.

Have you had any recent experiences of pre-Judgment interest? If yes, then please feel free to share them through this blog.

This blog was written by Andrew McAulay. Andrew is a Partner at Clarion and the Head of the Costs and Litigation Funding team. He can be contacted on 07764501252 or at andrew.mcaulay@clarionsolicitors.com

Pre-Trial Checklist: filing a costs estimate

Joanne ChaseLeave a comment

The note at the top of the Listing Questionnaire states “if no costs management order has been made you must attach estimates of costs incurred to date, and of your likely overall costs.” This can come as a nasty surprise, particularly to the lawyer under pressure with deadlines looming. So, what are the requirements for an LQ estimate?

The Old Rules (pre-April 2013)

Paragraph 6.4(1)(b) of the Costs Practice Direction said “when a party to a claim which is being dealt with on the fast [or] multi track files a pre-trial checklist (listing questionnaire) that party must also file an estimate of costs and serve a copy of it on every other party” and that the estimate should be “substantially in the form illustrated in Precedent H“. The costs practice direction (which used to be CPR PD 43 – 48) was completely omitted from 2013 onwards.

Current Rules (as at January 2021)

Under the rules as at January 2021 there is no requirement to file an estimate of costs with the LQ. Costs budgets are dealt with at CPR 3 and CPR PD 3E. The Practice Direction to the Fast Track states at CPR 28 PD 6.1 that “attention is drawn to the Costs Practice Direction, Section 6, which requires a costs estimate to be filed and served at the same time as the pre-trial checklist is filed”, but as stated above the Costs Practice Direction has not existed since 2013. There is no requirement at all within the Multi-Track Practice Direction at CPR 29 PD.

Under the current rules there appears to be no requirement at all to file costs estimates with the LQ. The CPR is fragmented and contains references to rules which no longer exist – it is very unclear what was even intended. It is arguable that Costs Management at CPR 3 and PD 3E was intended to do away with the old estimates regime altogether, and that the references in the CPR are simple drafting errors which were never removed. However, it is also possible to argue that the content of the LQ and the reference to estimates in CPR 28 indicate that where CPR 3 PD 3E does not apply, the “old” rules effectively remain in force.

What does this mean?

The rules clearly need amendment. It is certainly arguable that a Court Form does not or cannot impose additional requirements beyond those found in the CPR and that, absent a specific rule requirement, there is no requirement to do anything at all. However, the safest course of action is to simply file an estimate with the LQ.

There is no form requirement for an estimate at LQ stage and, given that there may not even be a requirement to file an estimate at all, it is understandable that legal representatives will want to minimise cost. You could use the old Precedent H (example here). However, a simple statement of the costs already incurred and what is expected to be incurred going forward would likely be sufficient to satisfy the requirements on the form (example here).

It is important to note that it is unclear what effect a costs estimate has if filed, or what the sanction might be if it is not. CPR PD 3E 3.2 states that if there is a difference of 20% or more between a costs budget filed by a party and the amount of any bill on detailed assessment that party must provide a statement of reasons. However, this applies only to costs budgets filed under CPR PD 3E and not to an estimate filed with an LQ. Ultimately, an assessing judge may take an estimate into account, they may not.

Summary

As of January 2021 the rules are very unclear about the requirements for filing an estimate of costs with the LQ, what form it should take, and what the consequences are of not filing or what the effect of a filed estimate is. Legal representatives should be aware of this potential issue and should consider how to approach it will in advance of the deadline for filing in order to decide the best course of action.

Should you have any questions, you can contact the team at CivilCosts@clarionsolicitors.com

Does the Mental Health Act need to be reformed?

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The Department of Health and Social Care has launched a consultation and White Paper on plans to reform the Mental Health Act. 

This follows a report released in 2018 that outlines that the Mental Health Act does not always work in the best interests of patients, their families and their carers.

The report sets out various recommendations to amend the Act so it does work in the best interests of individuals, in both practice and in law.

The Department of Health and Social Care is proposing a wide range of changes to rebalance the Mental Health Act, to put “patients at the centre of decisions about their own care and ensure everyone is treated equally.” 

The proposed amendments are based on the following principles:

  • choice and autonomy – ensuring service users’ views and choices are respected
  • least restriction – ensuring the Mental Health Act’s powers are used in the least restrictive way
  • therapeutic benefit – ensuring patients are supported to get better, so they can be discharged from the MHA
  • the person as an individual – ensuring patients are viewed and treated as individuals

The closing date for responses is 21st April 2021. The White Paper and consultation documents are at the website below.

https://www.gov.uk/government/consultations/reforming-the-mental-health-act

If you would like any further information of this, then please contact Scott on 0113 288 5688 or by email at scott.kemp@clarionsolicitors.com

Consultation on Guideline Hourly Rates now open

Andrew McAulay2 Comments

The current guideline hourly rates have not changed since 2010. A long awaited review was announced last year and a Civil Justice Council working group was established. For more details of the working group see https://www.judiciary.uk/related-offices-and-bodies/advisory-bodies/cjc/working-parties/guideline-hourly-rates/

The working group has now published their report and you can find it here.

The working group’s recommendations are set out below.

The consultation is open until 31st March 2021 at 4pm. You can respond online here

 

Helen Spalding is an Associate in the Costs and Litigation Funding Department at Clarion. You can contact her at helen.spalding@clarionsolicitors.com or on 0113 288 5639.

Is it possible to claim payments at Grade C?

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In the case of Kirby & Others (2013) it was decided that arranging payments should be reduced and limited to 3 minutes at a Grade D rate. This is because the SCCO see that making payments is routine and traditionally, no higher rate or time would be allowed.

Clarion have recently received a Bill of Costs back from the SCCO where the Cost Officer has allowed making a payment at 6 minutes at Grade C. This is something that we have not seen or heard anything about prior to this Bill.

In this matter the Cost Officer has allowed 6 minutes at Grade C stating ‘Payment of invoices is 3 minutes @ Grade D. If completed or high value, 6 @ C can be given.’  The ‘high value’ is discretionary as to the Costs Officer’s views and no further guidance was given about this decision.

We suggest that Deputyship teams should delegate payments to Grade D fee earners wherever possible, but bear this decision in mind if a high value transaction is required. It might be reasonable for a Grade C fee earner to make high value payments and the SCCO may allow this time at 6 minutes.

Scott Kemp is an Apprentice Paralegal in the Costs Litigation and Funding team at Clarion Solicitors.

You can contact him on 0113 288 5688 or scott.kemp@clarionsolicitors.com

Lockdown Lowdown- Master Haworth

Stephanie KayeLeave a comment

This blog forms part of a series of weekly interviews with several professionals during lockdown. It aims to inform Deputies and their teams about how each organisation within the field of Court of Protection has adapted to Covid-19. Our second participant for Lockdown Lowdown is Master Peter Haworth from the Senior Courts Costs Office.

  • How has the SCCO adapted to lockdown?

I originally thought we wouldn’t cope very well at all, and thought we would lock up shop at the SCCO, but that hasn’t happened. It’s not just skeleton staff, but staff working from home and a team in the office on a very detailed rota. We have a dedicated COP team of at least 5 people in today and 6 people in tomorrow, so we are finding ways to continue whilst respecting social distancing. We have managed to obtain laptops which have been given to Costs Officers so, in addition to the team in the office, Costs Officers are dealing with work at home. We have 8 Costs Officers and all 8 of them are working, be it remotely or from the office and the people in the high risk category are having work delivered to them as opposed to collecting it themselves. The team really have worked hard to adapt and I’m tremendously proud of them. The judiciary are also getting on surprisingly well in lockdown. We’ve had a number of Zoom and Microsoft Teams calls which have been very successful, and it seems that the judiciary has moved on 50 years in 2 weeks. I don’t think we will ever go back to ‘normal’ and I suspect that, going forward, we will continue to work in this way wherever it is appropriate to do so. The Senior Costs Judge doesn’t want things to grind to a halt so, wherever possible, we are dealing with things via Skype, Zoom and Microsoft Teams. I’ve had 2 full-day hearings for two substantial costs matters and it works well. I’m fixing more Microsoft Teams meeting where I hope to take live evidence, which is something that I would not have thought possible. With COP work, one of the benefits of the e-filing system that was introduced in January is that I can access this sitting at home, pick up cases and deal with them without too much difficulty. Where I need papers, the majority are being sent to me via the local County Court using DX and I pick them up from there. Also, in COP, I have had a couple of Costs Officers who have said that provisional assessments have not been accepted, and the solicitors have requested an oral hearing, so I’ve been able to simply access the file using the e-file system and list them without delay. The Costs Masters meet virtually on a Friday morning to discuss work loads too, which is useful. We’ve had one Master off ill, but others have picked up the work in his absence. I thought it might be a prolonged holiday for us all but that’s not happened!

  • What impact do you think this will have on turnaround?

You won’t believe this but, whilst I’ve parroted on, I’ve had an email with an update so I have the exact figures, hot off the press for you! As of the 27th of April 2020, straight from the horse’s mouth, we have 656 cases in the office up to 7 weeks old, awaiting assessment. We have a further 257 waiting for supporting papers from the solicitors which have been e-filed and accepted and a further 464 in the e-filing queue waiting to be processed by the e-filing team. Essentially, we have a backlog of 1,200 cases. I’m not holding anything back from you, so hopefully you can appreciate the full picture. We have one Costs Officer who has been ill and there are 10 cases awaiting collection from them. In addition, we have 195 Final Costs Certificates waiting to be authorised, which are being prioritised at the moment above the assessments. We are in a position to deal with things at home, but the bottleneck is the admin team processing the e-filing. We are working with a 50% admin team in the office due to social distancing measures, so that is where the difficulty lies in the administration of all of those cases. I would hope that, once the rules are relaxed, we will have a full team in the office again. We have seen turnaround a lot worse than this, but I appreciate even more so as a former solicitor that cash flow is king, and I’m the first to understand that. If there is anything we can do to push this through, we will. E-filing proved to be a lot more complicated than anticipated and it has slowed things down, for which I sincerely apologise on behalf of the office.

  • Has the SCCO learnt anything so far from the pandemic?

We can work virtually and electronically, rather than with high chairs and quill pens! We will have to put it all together when we get back to normality and find a new way of working. I think that the lockdown experience will provide more benefits in the years to come and, to my mind, we will move forward a lot quicker now. The majority of firms don’t work with paper files anymore so, as night follows day, it must mean electronic files move up the queue for COP, but I don’t know what the timescales are for that. We have trialled this and the Costs Officers were happy to access the solicitors’ system to carry out the assessment but, for this to be successful, there will have to be protocols and security measures. Provided we can meet those, it will move forward. There is also the electronic bill which you know about (Stephanie Kaye and Andrew McAulay are part of the committee preparing a COP electronic bill). COP will not need the same level of complexity as the current electronic bill for inter partes work, so I would hope to see an electronic bill in motion by the end of this year, or early next year and the the rest will follow. So many questions will be up for grabs and only time will tell, but I’m sure the real impact will be known when we get back. It will push us out of the Victorian times and move us into the 21st century.

  • Have there been any regular issues with e-filing that Deputies should be aware of?

The hiccups have been loading it all up in the first place. With no electronic bill, it’s having to be scanned into the system and a paper copy prepared for assessment, then scanned back out to the solicitor. All the extra admin had meant that the bottleneck was even worse. Although the bill will have to be scanned to obtain a copy, the Costs Officers are sending a paper copy back to the solicitor after assessment and, from that point in time, the solicitor can electronically obtain the Final Costs Certificate. I hope this will solve some of the issues but this will be an ongoing problem, until the introduction of the electronic bill. From my own experience, the electronic bill is so much easier and it will speed up the process considerably in COP cases.

  • Is the SCCO still available by telephone?

Yes, they are answering the phone. You might have to wait a little bit longer due to fewer people in the office, but there are Cost Officers and Clerks available. If they can’t answer the query, they will email the Master who might email the representatives directly, which is speeding things up. Providing they are accredited legal representatives and not parties, I am more than happy to work in this way, as are my colleagues.

  • We’ve already touched on this, but do you think there will be a move to electronic files of papers for assessment in the future?

Yes. This is not in the public domain, but all I can say is that there is some movement towards a sort of ‘bundle bank’, which would mean that the SCCO is able to access an electronic bundle to carry out an assessment, rather than interrogating the solicitor’s system, which has been trialled already. That’s something that is being considered, and I’m sure lockdown will accelerate moves to electronic working.

  • The MOJ invited the panel of professionals last year to comment on several areas, including consistency of reductions on assessments. Is it likely that the SCCO will update its guidance for Costs Officers and professional Deputies to help with more consistent assessments?

We will wait and see what the responses are from the MOJ on that point. We can then take a fresh look at the guide knowing the full picture. Obviously, any move to the electronic bill or electronic files of papers will mean that the guide is updated too. It will be a work in progress.

  • What is the plan for your retirement?

I’ve done COP work in practice for many years. In 2006, I joined the SCCO and I couldn’t have been handed this work any quicker. I’ve worked almost exclusively from 2006 until last year or the year before on COP. Master James and Master Whalan will deal with COP after I retire. I think the senior judges would like all costs judges to deal with every aspect but in my mind, COP is specialist and you have to know what you’re doing, so I think it’s best kept with 2 or 3 judges. As for my retirement, I had planned to go on the 30th of September but in light of the current situation, I may find myself here until Christmas. The plan is to do more of what I enjoy, including sailing and hot air ballooning. A lot of my ballooning is abroad so I suspect even after lockdown, there will be difficulties with this. I might have to stay in the UK, although it’s tremendously difficult to fly a balloon in British weather! In 2021, I plan to take part in a balloon event across the English channel. I’ve done it once and I’d like to do it again – it’s much quicker than the ferry!

  • How have you been keeping busy during lockdown?

I felt that staying in a flat in London wouldn’t be ideal so I’ve come back up north. I’ve spent more time with Mrs Haworth than I have in the last 15 years! The north is a pretty part of the world so, when I haven’t been working, I’ve been out walking or doing things in the garden, albeit my work in the garden mainly involves supervising Mrs Haworth!

  • What are you most looking forward to after lockdown?

Meeting friends and going to the pub!!

Clarion would like to thank Master Haworth for taking part in Lockdown Lowdown. He and the SCCO continue to work extremely hard to service Court of Protection Costs work during this time. Coming up in the series, we will be hearing from Francesca Gardner from Kings Chambers and Ria Baxendale from the OPG. If you would like to suggest another interviewee for Lockdown Lowdown, please contact Stephanie Kaye at stephanie.kaye@clarionsolicitors.com or call 0113 336 3402.

 

 

Coronavirus Update: Bar Council guidance on attendance at Court

Joanne ChaseLeave a comment

The Bar Council has today given further guidance to its members that advocates should not attend hearings in person unless they are “genuinely urgent” and cannot be done remotely. However, it is anticipated that such a hearing will be a rare occurrence.

My standing advice is that where a hearing is listed, practitioners should contact the court as soon as possible and ask for guidance. I recently wrote to the County Court at Huddersfield and asked what procedures are currently in place; I received a response today stating that “all hearings will be adjourned: you will be contacted before the hearing”.

The situation continues to develop rapidly and therefore it is likely that the position in relation to hearings will change.

Should you have any questions, you can contact the team at CivilCosts@clarionsolicitors.com.