Tag: law costs draftsman leeds

Fixed Recoverable Costs – 9 months away?

Andrew McAulayLeave a comment

At the Civil Procedure Rules Committee meeting on 13 May 2022, it was confirmed that the extension of fixed recoverable costs (FRC) is planned for April 2023. Please follow this link for a summary of the meeting which provides updates on other topics as well as FRC.  

FRC for the whole of the fast track and ‘lower reaches’ of the multi-track were first proposed by Lord Woolf during the last century! No progress was made and the topic went stale. Lord Justice Jackson raised FRC in his reports ahead of the LASPO reforms in 2013. Since 2013, progress has been delayed due to Brexit and COVID-19, but the government are now firmly focused on ensuring that the extension of FRC is rolled out. I recently spoke to Dominic Regan who confirmed that he thinks implementation will be April 2023, whereas I am of the view that it will be October 2023.

Regardless of the implementation date, it is important that all law firms who undertake contentious work (with damages under £100,000) start to prepare for implementation. Fees recovered inter partes will be very different, here is an example:

  • Band 2 case under the expanded fast track
  • Pleaded value of £50k but settles for £25k
  • Settles at Stage 5 – Witness Statements and Experts Reports
  • No JSM or Mediation
  • L3 firm instructed (12.5% uplift)
  • Fee would be £9,500 plus 16% of damages (£4,000) plus 12.5%
  • Total = £15,187.50 plus any disbursements and VAT

The fee of £15,187.50 allows circa. 82 hours at £185 per hour (Grade C SCCO GHR for an L3 firm). Remember, the £15,187.50 fee is for the lawyer and Counsel except where Counsel are instructed using one of the ‘bolt-on’ fees. The ‘bolt-on’ fees are not factored into the calculation, but if they were then they would allow no more than £3,250 for external Counsel drafting of statement of case and for a written opinion and/or advising in conference. I suspect £15,187.50 represents grim reading for most litigators and is significantly lower than a litigator would expect to recover inter partes at present for a case with the above assumptions.

The extension of FRC will bring significant change to inter partes costs recovery and create further pressure on solicitor/own client relationships. However, FRC will create opportunities for many law firms but those firms will need to rely on increased economies of scale. Efficiency, efficiency and guess what? Efficiency will be key! The Costs and Litigation Funding team at Clarion has followed the topic of FRC extensively since 2013 and can provide training on the reforms for law firms.

Please do not hesitate to contact Andrew McAulay at andrew.mcaulay@clarionsolicitors.com or on 077645 01252 for further information or Rob Patterson at Robert.Patterson@clarionsolicitors.com or on 07961 875496.

The use of the Damages Claim Portal now mandatory for all claims for damages commencing in the County Court

Daniel MurrayLeave a comment

In a move which is very much in line with the Master of the Rolls vision for online digital justice, the use of the Damages Claims Portal for all claims for damages commencing in the County Court, is now mandatory for legally represented Claimants from today.

The pilot scheme had previously been in effect from May 2021 and will run until April 2024. The 142nd update to the CPR, which was released on 28 March makes the use of the online system mandatory.

There are a number of exceptions to this requirement, amongst which are, if the Claimant is a protected party, or the case is one to which the Pre-Action Protocol for Personal Injury Claims below the Small Claims Limit applies.

The full list of exemptions and guidance on how to follow the portal process can be found in Practice Direction 51ZB.

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

Supreme Court finds in favour of Claimant Solicitors seeking an equitable lien over costs

Daniel MurrayLeave a comment

In a favorable judgment for Claimant Solicitors, the Supreme Court has decided by a narrow 3:2 majority that the Claimant’s Solicitors were entitled to an equitable lien over their clients’ compensation for their costs.

The Facts

The case centered around proceedings brought against Ryanair by Bott & Co Solicitors, a North West firm who handle a high volume of delayed flight compensation claims. The Defendant had been leapfrogging the Claimant’s Solicitors once a claim was submitted and settling matters with the Claimants, who in turn were not passing on costs due to Bott & Co. The Claimant’s Solicitors acted on Conditional Fee Agreements in the cases, with costs being 25% of the total compensation amount awarded to the client plus VAT, plus an administration fee. Costs were to be deducted from the compensation before it was paid to the Claimants. Bott brought proceedings, seeking both an equitable lien over the compensation and injunction to prevent Ryanair taking this approach in cases where notice that they had been retained had been provided.

The Decision

In determining the key issues, consideration was given to the Court’s earlier decision in Edmonson v Haven [2018] UKSC 21. Here the Supreme Court examined the role of the solicitor’s equitable lien in the context of modern litigation, where access to justice is a central underlying goal and out of court settlements and alternative dispute resolution are encouraged. In Edmonson, the Court had decided that the solicitor was entitled to an equitable lien over the settlement fund because the work had made a significant contribution to the settlement of the client’s personal injury claim. That case flowed from the position whereby a Claim Notification Form had been submitted through the Pre-Action Protocol for Low Value Personal Injury Claims. This, in the words of Lord Burrows ‘implicitly overruled’ the Court of Appeal’s decision in Meguerditchian v Lightbound [1917] 2 KB 298, which decided that the trigger for an equitable lien was whether proceedings had been issued.

Being bound to follow the decision in Edmonson, Lord Burrows for the majority, stated that ‘the appropriate test for a solicitor’s equitable lien is whether a solicitor provides services (within the scope of the retainer with its client) in relation to the making of a client’s claim (with or without legal proceedings) which significantly contribute to the successful recovery of a fund by the client’. It was decided that although the majority of flight compensation claims are settled without any dispute, the act of advancing the Letter of Claim by Bott & Co, was sufficient to satisfy this test.

The decision of the Court also centred around promoting access to justice, with the logic being that this would be promoted further if Solicitors were comfortable knowing that they had the security of a lien to recover their costs. Lady Arden for the majority stated that ‘effective access to justice has become a foremost animating principle of the equitable lien’.

In their dissenting judgements, Lord Legatt and Lady Rose based their decisions, amongst other reasons, on the fact that there was no real prospect of a dispute in these types of cases.

The result

The fact that the requirement for a dispute does not form part of the test for establishing an equitable lien, opens the door for the application of this case to a greater number of cases, particularly as litigation continues to be driven to become more streamlined. The decision, as acknowledged by Lord Burrows in his judgement, is ‘at the outer limits of a solicitor’s equitable lien’, but nonetheless provides Solicitors with a greater degree of certainty and ensures there should be firms willing to undertake relatively low value work on behalf of Claimants in the future, which can only be a good thing.

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

Further notice from the SCCO on COP assessment delays is now available

Stephanie KayeLeave a comment

On 22 March, the SCCO released a further notice in relation to the ongoing delays with assessments.

In summary, turnaround at present is as follows:

  • Costs Officers are currently being assigned bills of costs received in or after late September.
  • The Admin Team are processing the return of assessed bills received back from the Cost Officers in the last week of February.
  • New filings for assessment received in late January are being considered.
  • Certificate request filings received in mid-March are being received and actioned as acknowledgement of the requests to receive payment before the end of the financial year.

The SCCO have requested that enquiries about the progress of bills which supported paperwork was submitted around or after late September and any e-filings that have not been accepted/rejected that were submitted after late January are limited to aid in the efforts to focus on the reduction of the backlog.

Please see the link below for the full notice released:

Notice-to-COP-customers-21-March-2022-SCCODownload

You can find out more about our services here or you can contact the Costs and Litigation Funding team at cost.support@clarionsolicitors.com

Who are the interested parties and who should be served in COP cases?

Casey McGregorLeave a comment

An interested party is anyone with a financial interest in the outcome of the assessment. Rule 47.19 of the CPR enables the court to direct under rule 47.19(3) that the receiving party must serve a copy of the request for assessment and copies of the documents which accompany it, on any person who has a financial interest in the outcome of the assessment.

Practice Direction 47, para (18.2) explains what is or is not a ‘financial interest’. It states ‘A person has a financial interest in the outcome of the assessment if the assessment will or may affect the amount of money or property to which that person is or may become entitled out of the fund. Where an interest in the fund is itself held by a trustee for the benefit of some other person, that trustee will be treated as the person having such a financial interest unless it is not appropriate to do so. ‘Trustee’ includes a personal representative, receiver or any other person acting in a fiduciary capacity’.

The SCCO expect the professional Deputy to determine who such an interested party may be and for the Deputy to take a sensible, pragmatic approach. It may not be appropriate to serve every beneficiary of P’s estate, for example. It is recommended that any interested parties are highlighted for the SCCO’s attention when e-filing your bill of costs.

Sometimes the SCCO will indicate on the assessment that the bill of costs needs to be served on the interested parties, but even where they don’t state that, it is up to the Deputy or Claimant to decide if the bill should be served. There have been instances where a Final Costs Certificate has been obtained and an interested party has come forward asking why they were not served at the time, wishing to challenge the outcome of the assessment. If the SCCO decided that party should have been served, the Claimant may be liable for the costs of that additional process as a result of not following procedure.

The link to the procedure rules can be found at: https://www.justice.gov.uk/courts/procedure-rules/civil/rules/part-47-procedure-for-detailed-assessment/practice-direction-46-costs-special-cases2#18.1

If you have any questions, please do not hesitate to contact Casey Mcgregor at casey.mcgregor@clarionsolicitors.com

Changes to the SCCO requirements following assessment

Ella WilkinsonLeave a comment

As of 1 January 2022, the SCCO will continue to require all provisionally assessed bills to be submitted alongside a completed bill summary, and for this to be e-filed to request the issuing of the Final Costs Certificate.

However, the bill will also need to be recalculated in accordance with Practice Direction 47 of the Civil Procedure Rules. As such, this will necessitate the recalculation of the bill of costs on a line-by-line basis, with the new amounts for each item of work annotated onto the bill.

Previously, only annotating the totals allowed across the bill on assessment in respect of VAT, profit costs and disbursements has been accepted. This will not be the case as of the New Year. This is an onerous task and time spent preparing these line-by-line recalculations will not be recoverable.

Clarion are currently working with the SCCO and Professional Deputies Forum to identify a suitable interim solution before the New Year for the firms that we work with. Further updates will be circulated in due course.

The E-bill continues to be developed for use and the eventual introduction of this will remove the need for archaic recalculations. We hope to find a solution in the meantime, which results in no additional cost to the Deputy or P whilst complying with the SCCO’s requirements, until the E-bill is introduced. We will publish further information on this topic as soon as possible.

You can find out more about our services here or you can contact the Costs and Litigation Funding team at costs.support@clarionsolicitors.com.

Can Deputies claim for tax work within the Bill of Costs?

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Can Deputies claim for tax work within the Bill of Costs?

During the Deputyship period, the Deputy may need to enlist the help of a tax advisor to assess P’s taxable income and to determine whether it is necessary to prepare a tax return for the tax year in question.

Bill of Costs. This time is often recovered at Grade C hourly rates and is not considered to merit a Grade B or A fee earner. The hourly rate of the tax advisor would need to be reflected in your client care letter. Some of this work may be considered Grade D in nature

When the tax work is carried out externally and the Deputy receives an invoice for the work carried out, this can be settled directly from P’s estate.

If it is necessary for the Deputy to prepare a tax return for P and they do not want the time assessed for it, they are able to claim fixed costs for this work. These fixed fees are outlined in Practice Direction 19B of the Court of Protection Rules (2017). If the tax return is completed in house efficiently, it may be more appropriate to take fixed costs for the task, which is better for cash flow.

  • For the preparation of a basic HMRC income tax return, the fixed cost available is ‘an amount not exceeding £250.00 (plus VAT).’
  • For the preparation of a complex HMRC tax return, the fixed cost available is ‘an amount not exceeding £600.00 (plus VAT).’ A complex tax return may arise where P has multiple investment portfolios or more than one rental property for example.

Overall, the Deputy is able to claim tax work done internally within the Bill of Costs, or depending on the level of time incurred, it may be more cost effective to take the applicable fixed cost for the work. However, work done by an external provider should be settled directly from P’s estate following the receipt of the invoice.

If you would like any further information of this, then please contact Scott on 07769607134 or by email at scott.kemp@clarionsolicitors.com

Guideline Hourly Rates 2021 & Other Changes Impacting COP Costs

Laura SugarmanLeave a comment

From 1st October 2021, the new Guideline Hourly Rates will come into force. This means that from this date, subject to your retainer/client care letter, you will be able to claim the new hourly rates. The new rates are as follows:

 Grade AGrade BGrade CGrade D
London 1£512£348£270£186
London 2£373£289£244£139
London 3£282£232 £185£129
National 1£261£218£178£126
National 2£255£218£177 £126

The new Guideline Hourly Rates will displace Master Whalan’s decision in PLK & Others (2020). The new GHR differ across geographical locations, but overall, they are increased from the outdated 2010 GHR. For most junior fee earners, the increase is less than those awarded in PLK & Others.

In respect of Court of Protection costs specifically, the report quotes Master Whalan in the decision of PLK & Others, where he concluded that ‘ultimately I am not satisfied that the evidence supports Mr Wilcock’s contention that COP firms have experienced a significant increase in hard and soft overheads’.

It was also noted that ‘in general, however, COP assessments can be conducted by costs officers utilising the GHR as the reasonable hourly rate. The issue as to the appropriate status or grade of fee earner for the work in question will always be a matter for discretion of costs officers and/or costs judges’. When considering the PLK rates, the decision was made that ‘the GHR rates (if approved) are the rates to be used, not the PLK rates’.

The impact of this for Court of Protection practitioners is that the rates stated in the PLK & Others judgment dated 30 September 2020, as set out below, will no longer apply to costs to be assessed by the Senior Courts Costs Office, and that the new GHR will instead be applicable.

As well as this, there will also be an increase to Court fees which will also impact COP matters. The new Court fees will impact all COP matters, with the COP assessment fee increasing from £85 to £87. The cost of a costs appeal in COP matters will increase from £65 to £70.

Alongside policy change, there have been many changes at the SCCO too with several experienced Costs Officers leaving or retiring, creating inconsistent assessments and large delays.

In addition, the proposed COP E-Bill is almost ready for consultation and once approved, will create a more streamlined assessment process. The SCCO are also now accepting electronic PDF bundles for assessment, which is positive news for the environment. However, electronic systems are not without their flaws and it’s likely to take some time for the SCCO to adapt fully.

If you have any questions about any of the issues raised, please contact Laura Gillin at Laura.Gillin@clarionsolicitors.com

Proposed increases to court fees to proceed

Bethany CollingsLeave a comment

Court and Tribunal Fees – The Government response to the consultation on ‘Increasing selected court fees and Help with Fees income thresholds by inflation’

Following a consultation process, the Government will be proceeding with proposed increases to Court fees. the changes are likely to come into force in early Autumn. The proposed fee increases reflect inflation and are not therefore real terms increases.

The proposed increases will effect the costs  of detailed assessment as set out below.

DescriptionCurrent FeeIncreaseFinal fee  
Assessment of costs (under Part 3, Solicitors Act 1974)  £55+£4£59
Where the party filing the request is legally aided  £220+£17£237
Costs up to £15000  £369+£29£398  
Costs £15000 – £50000  £743+£58£801  
Costs £50000 – £100000  £1,106+£86£1,192  
Costs £100000 – £150000  £1,480  +£115  £1,595  
Costs £150000 – £200000  £1,848  +£144  £1,992  
Costs £200000 – £300000  £2,772  +£216  £2,988  
Costs £300000 – £500000  £4,620  +£360  £4,980  
Costs Above £500000  £6,160  +£480  £6,640  
Issue of default costs certificate£66  +£5  £71  
Appeal (detailed assessment proceedings)£231  +£18  £249  
Request/application to set aside a default costs certificate  £121+£9£130  

There will also be an effect on the costs of assessment in Court of Protection cases:

On the filing of a request for detailed assessment for Court of Protection  £85£2£87  
Appeal against a Court of Protection costs assessment decision  £65£5£70  

Bethany Collings is an apprentice paralegal in our Costs and Litigation Funding team. If you have any questions, please contact her on 0113 227 3607 or at Bethany.Collings@clarionsolicitors.com

Mis-Certification of a Bill of Costs – Be careful!

Andrew McAulayLeave a comment

Back in May, I posted a Vlog about the SRA’s decision following the Court of Appeal’s Judgment in Gempride v Bamrah [2018] EWCA Civ 1367. You can view that Vlog here.

I was therefore very interested to read the recent decision of Master James in the case of Farmer v The Chief Constable of Lancashire [2019] EWHC B18 (Costs) and to share it with you. Here are the key points:

  1. Mr Farmer (“the Receiving Party”) had the benefit of a costs order against the Defendant (“the Paying Party”).
  2. A Bill of Costs was prepared, and detailed assessment proceedings were commenced. The original Bill of Costs totalled £174,565.79.
  3. There were issues over the validity of Conditional Fee Agreements, recoverability of success fees and incorrect hourly rates which led to the service of an amended bill in the sum of £116,192.50.  That total was also incorrect, and the Court found that the bill should have been drawn in the region of £66,000 to £69,000.
  4. The Bill of Costs had been certified as accurate and true. Certain points/items were also maintained through Replies and a Witness Statement.
  5. Had the Bill of Costs been prepared correctly, then the matter would have been dealt with under the Provisional Assessment scheme. This would have saved substantial time and cost for each party and the Court.
  6. There were also costs included in the Bill of Costs which were not recoverable inter-partes.
  7. The Paying party applied to strike out the remainder of the Bill of Costs, pursuant to CPR 44.11.
  8. The Court struck out the remainder of the Bill of Costs; the Receiving Party was entitled to nothing.
  9. The Receiving Party was ordered to pay the costs of the detailed assessment and re-pay the payments on account received.

In Gempride the penalty reduction was 50%. In this case the penalty reduction was a full strike out of the remainder of the costs (circa. £66,000.00 – £69,000.00).

It is fundamentally important to ensure a Bill of Costs has been prepared correctly before you certify it. Mis-certification of a Bill of Costs is a serious issue.

Mistakes happen and the Court will look more favourably on innocent mistakes which are rectified quickly. In this case, the Receiving Party pursued the matter to detailed assessment and maintained retainers that were clearly not enforceable.  

In my Vlog in May, I provided 5 tips to help ensure that you avoid any mis-certification issues. Please view the Vlog to help you check a Bill of Costs (or a costs budget or statement of costs for summary assessment) correctly and to stay clear of any mis-certification arguments and costs penalties. You might want to use my 5 tips to create an internal check-list.

This blog was written by Andrew McAulay. Andrew is a Partner at Clarion and the Head of the Costs and Litigation Funding Team. Andrew can be contacted on 0113 336 3334 or at andrew.mcaulay@clarionsolicitors.com