The LASPO reforms were introduced on 1 April 2013. Sir Rupert Jackson was the author of the reforms which introduced over 100 individual reforms.
In this video podcast, Dominic Regan (consultant to the Costs and Litigation Funding team at Clarion) poses questions to Sir Rupert on the LASPO reforms 8 years after implementation.
You can find out more about our services here or you can contact the Costs and Litigation Funding team at CivilCosts@clarionsolicitors.com.
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You can find out more about our services here or you can contact the Costs and Litigation Funding team at CivilCosts@clarionsolicitors.com.
From 1 April 2021 a key change to Part 36 means that additional interest will not be payable where the Part 36 offer is accepted after the relevant period unless specified within the offer.
In accordance with CPR 36.5(4) a Part 36 offer is treated as inclusive of any interest to the expiry of the relevant period. From 1 April 2021 a new rule 36.5(5) provides as follows:-
A Part 36 offer to accept a sum of money may make provision for accrual of interest on such sum after the date specified in paragraph (4). If such an offer does not make any such provision, it shall be treated as inclusive of all interest up to the date of acceptance if it is later accepted.
This rule change is likely to affect only claimants’ offers. However, defendants should be aware of the rule and check the terms of any offers received carefully.
At this stage the meaning of the rule is somewhat ambiguous. It is not clear whether it means that an offer may provide that if accepted after the expiry of the relevant period there will be a liability to pay further interest, or whether it simply means that the offer may exclude further interest from the terms of the Part 36 offer (i.e. the offer will become an offer for part of the proceedings after it has expired). These questions, and the effect of an offer which excludes interest, are only likely to be clarified when they have been put before the Courts. As the rule applies only to offers made on and after 1 April 2021, this is unlikely to be for some time.
You can find out more about our services here or you can contact the Costs and Litigation Funding team at CivilCosts@clarionsolicitors.com
Discussing fees with a client is often one of the most stressful parts of a solicitor’s job. Social taboos around talking about money run deep; studies have consistently shown that personal finances rank high on the list of topics people find it hardest to talk about. Yet they have also shown links between reluctance to talk about money and the risk of falling into financial hardship. Getting these conversations right can protect you from challenges, and protects your client from falling into financial difficulty.
This is the third 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 II: What is an Invoice
Avoiding Challenges to your Costs IV: Time Recording
When it comes to money, being proactive is key. Providing an early and accurate estimate of costs will enable your client to plan ahead and avoid difficult conversations later. You should also keep your client informed as the case progresses, and schedule regular updates to ensure that you are on track and the client is informed. If things change, update the client as soon as possible and explain what this means in relation to costs.
An accurate estimate helps your client understand what costs you are likely to incur and also allows them to plan the litigation. A client is far less likely to dispute your fees if they had a good idea of what it would cost in advance. And if they do dispute your fee, you can refer to the estimate and point out that they knew the cost when they authorised the work. If you have exceeded the estimate, you will be able to explain why the work done went beyond its scope.
Preparing an estimate can seem daunting, but following these simple rules will make estimates easy:-
| Pre-Action | ||
| Review client documents | 4 hours | £400 |
| Letter of Claim | 2 hours | £200 |
| Advice and correspondence with client | 6 hours | £600 |
One fear lawyers have is that they will “scare off” clients if the estimate is too high. However, most clients will appreciate transparency on fees. And if they are unwilling or unable to pay, it is better to know before you do the work. There is no benefit to you in obtaining work which is not profitable.
Once you have provided the estimate to the client, make sure that you give regular fee updates. For example, using the example estimate above when you send the letter of claim to your client you might include a sentence saying “I confirm that our unbilled fees to date total £xxx” and either confirm that this is below your estimate, or explain why it is above your estimate. If your client later questions your fees you will be able to refer them to your letter where you told them the level of your fees.
By preparing an estimate and updating your client about fees you avoid difficult conversations about fees at the end of the matter. If your client later disputes your fees you are in a strong position to resist any reductions because you can argue that they continued to instruct you in full knowledge of what the fees were. An estimate is a powerful tool in ensuring recovery of your own fees, and also in enabling your client to manage their finances.
You can find out more about our services here or you can contact the Costs Team at CivilCosts@clarionsolicitors.com.
The Government issued a public consultation on 22 March 2021. The Ministry of Justice is consulting on increasing some court fees in line with historical inflation dating from August 2016 to April 2021, or from the year the fee was last amended (capped at August 2016). The proposal is limited to fees which are under-recovering compared to the estimated cost of the service and to fees which are enhanced, meaning they can legally be set above the cost of service. The impacted fees are included in the following fee orders:
• Family Proceedings Fees Order 2008 No 1054 (43 impacted fees);
• Civil Proceedings Fees Order 2008 No 1053 (67 impacted fees);
• Court of Protection Fees Order 2007 No 1745 (3 impacted fees); and
• Magistrates Courts Fees Order 2008 No 1052 (20 impacted fees).
At the same time as increasing fees, the Government is also proposing to widen access to the Help with Fees scheme and make it more generous. This proposal includes inflationary uplifts to the income thresholds, including the couple and child premiums, in the Help with Fees scheme, backdated to August 2016. The proposal will widen access to and increase the generosity of the Help with Fees scheme. In particular, the extended scheme will benefit women, people from black and minority ethnic backgrounds, disabled people and younger people, who all feature disproportionately among low income groups.
The proposed fee increases will raise an estimated additional net income of £11-£17 million a year for HMCTS after fee remissions, including the proposed changes to Help with Fees, are applied. This will help to ensure HMCTS continues to have the necessary funding to complete its much needed and important activities. Given the current economic uncertainty and the difficulty in forecasting rates of inflation accurately at this time, the figures included in this proposal are indicative and will be revised, based on actuals, prior to the implementation of the revised fee. Therefore, this estimated income is subject to change.
Responses are welcomed from anyone with an interest in or views on the subject covered by this consultation. The full consultation is available at: https://consult.justice.gov.uk/digital-communications/increasing-selected-court-fees-income-thresholds. Responses are required by the 17th May and can be submitted via an online survey using the link above, via email: mojfeespolicy@justice.gov.uk, or by post to: Fees Policy Team, Ministry of Justice, 102 Petty France, London SW1H 9AJ.
Any questions regarding this consultation can be addressed to the Ministry of Justice Fees Policy Team (mojfeespolicy@justice.gov.uk).
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:-
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
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
OPG Guidance regarding ACC & Others
Following the ACC and Others decision in early 2020, the Senior Judge of the Court of Protection has since issued guidance confirming the position regarding the authority of Deputies to obtain legal services and how conflicts of interest should be managed.
The guidance states that ordinary ‘non contentious’ tasks such as property conveyancing, managing leases, businesses and associated employment contracts, preparing tax returns, taking on advice of tenancy liabilities and arranging care are within the general authority of property and financial affairs Deputies.
It further states that for areas outside of the general authority of property and financial affairs Deputies, specific authority is required in order to conduct work. This includes to conduct litigation on behalf of P, use P’s funds to reimburse a third party instructed, matters relating to health and welfare and litigation for CHC funding appeals. The Deputy is required to apply to the Court of Protection for retrospective authorisation in order to carry out the actions stated above.
With regards to existing Deputies, the guidance makes it clear that there is a continuing expectation that Deputies will consider the limits of their own authority. It outlines that authorisation from the Court is required for all on-going and future work which falls outside of the authority of the Deputyship, as mentioned above. Deputies are expected to apply to the Court of Protection where projected costs exceed £2000 plus VAT. The Deputy should make a proportionate decision in circumstances where obtaining three quotes would incur more costs than the proposed work.
It states that the OPG expect Deputies to make the appropriate application for authorisation by 1 April 2021. The application is for authorisation where the provision of services to P may constitute a conflict of interest and costs exceed £2,000 plus VAT. The guidelines extend to any situation where the Deputy is considering the procurement of services for P, which may include provision from the Deputy’s own firm and hence constitute a potential conflict of interest.
The guidance also outlines that with welfare matters, other authorities may be better placed to act, such as local authorities and the NHS, who do not need authorisation to carry out urgent work outside the scope of Deputyship. They Deputy will need to consider whether they can ask someone else to handle the welfare issues and refer to the issues of those agencies.
The OPG outline that they require applications to be made in respect of any unauthorised work started or ongoing since the date of the judgement by 1 April 2021.
The guidance can be found here: https://www.deputiesforum.co.uk/blog/opg-has-published-new-guidance-which-deputies-must-comply-with-by-1-april-2021
As always, if you have any questions about the above please contact Ellie Howard-Taylor on 0113 288 5660 or by email at ellie.howard-taylor@clarionsolicitors.com
On 8 January 2021 the Civil Justice Council announced its consultation on the Guideline Hourly Rates. You can find more information about the consultation and how to have your say here.
It is now more than 10 years since the Guideline Rates were last reviewed and there is a growing body of case law which recognises that they are now outdated. The Table below shows the current guideline rates against the rates adjusted for inflation against the rates currently proposed by the CJC:-
| Guideline Rate (Band 1 / 2) | Guideline Adjusted for Inflation | CJC Proposed Rate | |
| A | £217 / £201 | £280 / £260 | £261 / £255 |
| B | £196 / £177 | £253 / £228 | £218 / £ 218 |
| C | £161 / £146 | £208 / £188 | £178 / £177 |
| D | £118 / £111 | £152 / £143 | £126 / £126 |
So it seems that the recommendations will blur the line between National Bands 1 and 2, perhaps in part to take into account the greater flexibility afforded by communications technology. However, the recommendations fall short of bringing hourly rates to the levels they would have been if they had increased in line with inflation.
It is also notable that the proportional increases are highest for the top Grade and lowest at the bottom (a 20.2% increase for a National 1 band A against 6.8% for a National 1 band D), but when compared to the 2010 Guideline Rates the CJC Recommendations represent a real terms cut to hourly rates from their 2010 levels of up to 20%:-
| 2010 Guideline Rate | CJC Proposed Rate in 2010 money | % reduction | |
| A | £219 / £201 | £198 / £193 | 10% / 4% |
| B | £196 / £177 | £165 | 16% / 7% |
| C | £161 / £146 | £135 / £134 | 18% / 9% |
| D | £126 / £126 | £95 | 20% / 15% |
Any increase to the guideline rates is to be welcomed, as they are still commonly used as the starting point for consideration of the hourly rates. In reality, an increase to the guideline rates is likely to mean better recoveries for successful parties when costs are assessed. However, they do represent a real terms cut for all regional practitioners, especially those in urban centres and particularly at the more junior end.
Should you have any questions, you can contact the team at CivilCosts@clarionsolicitors.com
“because nobody can pretend that these Regulations represent the draftsman’s finest hour, it is appropriate if I add a few words to explain my own approach to the issues.“
The Court of Appeal has delivered the long awaited judgment in LEXLAW V ZUBERI. It accepts that the DBA Regulations are less than perfect in the way they were drafted . Coulson LJ , quoted above, makes the excellent point that the argument put forward by the client equated to “ commercial suicide “ for lawyers and it was rejected outright.
The client engaged LEXLAW to pursue a claim against her bank using a DBA whereby she would pay 12% of damages recovered in the event of success .
The agreement stipulated that if she were to end the arrangement she would be liable to pay costs incurred. She made her recovery but then argued that the agreement was invalid because the Regulations do not permit one to charge anything to the client if one proceeds using a DBA .
Put succinctly, the provision to charge if the client terminated was outside the DBA and did not fall foul of the restriction upon so called ‘ hybrid ‘ arrangements. Good news for Solicitors .
This blog was written by Professor Dominic Regan who is working with the Costs and Litigation Funding team as a consultant.