Tag: Litigation

Who can sign a Bill or Statement of Costs?

Joanne ChaseLeave a comment

A Bill or Statement of Costs must be signed. This requirement is contained at CPR 47 PD 5.21 in the case of a bill, or CPR 44 PD 9.5(3) for a statement. But one question which is often asked is who may sign a bill? The certificates on the precedents refer to a “Partner”, but is a partner in fact required to sign?

CPR 44 PD 1.1 states that“…in respect of any document which is required by Practice Directions 44 to 47 to be signed by a party or that party’s legal representative, the provisions of Practice Direction 22 relating to who may sign apply as if the document in question was a statement of truth. Statements of truth are not required in assessment proceedings unless a rule or Practice Direction so requires or the court so orders.”

Statements of Costs

CPR 22 PD 3.1 states “in a statement of case… the statement of truth must be signed by (1) the party or his litigation friend; or (2) the legal representative of the party…” A legal representative is defined at CPR 2.3 as “(a) a barrister; (b) solicitor; or (c) a solicitor’s employee”.

CPR 44 PD 9.5(3) states that “the statement of costs… must be signed by the party or the party’s legal representative”. This falls within CPR 44 PD 1.1 and CPR 22 PD 3.1 as above, and therefore a statement of costs may be signed by the party’s “legal representative” as defined above. A statement of costs therefore does not need to be signed by a Partner. Indeed, according to the Rules the statement of costs could in theory be a trainee or even a secretary.

Bills of Costs

The position is not so clear for a bill of costs: CPR 47 and the associated practice direction does not contain any rule that the bill of costs must be signed by the party or the party’s legal representative. Rather, CPR 47 PD 5.21 states that the bill must “…contain such of the certificates [annexed to the practice direction] as are appropriate”.

The certificates to be included can be found here and state “all certificates must be signed by the receiving party or by his solicitor”. However, it is not clear that a precedent document can, of itself, impose any obligation on a party as it is supplementary to but does not form a part of the rules.

In Bailey -v- IBC Vehicles [1998] EWCA Civ 566 it was held that “the signature on of the bill… is effectively the certificate by an officer of the Court that the receiving party’s solicitors are not seeking to recover in relation to any item more than they have agreed to charge…”

By analogy, CPR 3.13(5) states that a costs budget must be verified by a statement of truth “signed by a senior legal representative” of the party, and it was held in Americhem Europe Ltd -v- Rakem Ltd [2014] EWHC 1881 that a legal representative is someone who “is representing in a legal capacity” and that a costs draftsman, who simply prepares the bill, is not. This authority therefore suggests that the individual should be directly engaged in or at least have capacity to carry out a reserved activity (i.e. an activity which is reserved under the Legal Services Act 2007) rather than an activity ancillary to a reserved activity. In other words, the test is whether the individual is entitled to carry out the reserved activity to which the bill related, such as litigation.

Furthermore section 69(2A) of the Solicitors Act 1974 provides that a solicitor’s bill to his client must be signed “by the solicitor or on his behalf by an employee of the solicitor authorised by him to sign”. This raises the question as to whether a bill certificate may be signed by an employee of a solicitor but that the “buck stops” with the solicitor – i.e. any employee may sign but if it is wrong the solicitor is responsible. This was the finding in Gempride -v- Bambrah [2018] EWCA Civ 1367 in which the solicitor had signed a bill which was wrong. She subsequently argued that she had relied on the costs draftsman that it was accurate; the Court held that whilst it may have been drafted by others she was ultimately responsible for the content.

In the opinion of the author, a bill of costs does not need to be signed by a partner but must be signed by a solicitor and not a “legal representative”. It is possible that a Fellow of the Chartered Institute of Legal Executives (being entitled to carry out reserved activities) might also be entitled to sign.

Summary

There is no requirement that a bill or statement of costs must be signed by a partner. Whilst it is theoretically arguable that any employee of a solicitor may sign a statement or bill of costs (1) the solicitor will ultimately be liable even if the document is signed on their behalf, and (2) it would in almost all cases be needlessly risky to do so as it could give rise to significant argument about whether the document had been properly certified. Therefore in general, bills and statements should be signed by a solicitor.

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

Fixed recoverable costs to be extended as Jackson proposals accepted

Andrew McAulay2 Comments

The government’s response to the MOJ consultation on Extending Fixed Recoverable Costs in Civil Cases has now been published and can be found here.

The report confirms that the recommendations made by Sir Rupert Jackson in 2017 will largely be implemented, save for the introduction of an ‘Intermediate Track’ as those cases will fall into an expanded Fast Track for cases valued up to £100,000.

Mesothelioma, clinical negligence, actions against the police, child sexual abuse claims and IP matters will be excluded. There will also be a fixed costs regime for noise induced hearing loss claims and costs budgeting will be introduced for judicial review claims where costs exceed £100,000.

Cases within the new expanded Fast Track will be allocated to one of four bands based on complexity with uplifts to apply where a Part 36 offer is beaten (35%) or there has been ’unreasonable behaviour’ (50%). The figures set out by Sir Rupert Jackson in 2017 will be adjusted for inflation, the original Fast Track and Intermediate Track proposals are, however, set out below:

The draft rules will be submitted to the Civil Procedure Rules Committee for consideration before being finalised. It is anticipated that the changes will be implemented in April 2023.

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

Increased Guideline Hourly Rates approved by Master of the Rolls

Andrew McAulayLeave a comment

Following the publication of the Civil Justice Council working group’s final report on guideline hourly rates, the proposed changes have now been accepted by the Master of the Rolls.

The revised rates are as follows and are expected to come into force on 1st October 2021 together with the revised Guide to the Summary Assessment of Costs.

For more details see the recent video on our youtube channel where Professor Dominic Regan and Stephanie Kaye discuss the report, including the practicalities and potential issues going forward for both COP practitioners and commercial litigators.

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

Fixed costs when the claimant dies, which section of CPR 45 applies?

Daniel MurrayLeave a comment

The Court of Appeal has delivered an important ruling in the case of West v Burton [2021] WLR(D)379], on which provisions of CPR 45 apply where the claimant dies throughout the course of a matter in which the fixed costs regime applies. The issue in dispute between the parties was whether it was the lesser provisions, in monetary value, of section III, or the more favourable in this instance, provisions of section II.

Both at first instance and at the initial appeal it had been decided that it was the provisions of section II of CPR 45 which ought to apply, as was argued on by the claimant. The reasoning being that claims brought by personal representatives were excluded from the protocol.

The unanimous decision was delivered by Sir Nigel Davis, who confirmed he had not found the decision altogether easy. It was said that “for the purposes of the Protocol, the claimant throughout is regarded as the person who was involved in the road traffic accident.”

“Furthermore, r.45.29A and r.45.29B are in terms confined to claims started under the Protocol. I consider, accepting the submissions of Mr Williams, that in this case the claim that was settled was that of Mr West. But Mr West was not himself the person who started the claim, within the meaning of the Protocol. Indeed, as executor he never could have started such a claim, given the provisions of paragraph 4.5(3) of the Protocol. Consequently, this was not a claim, for the purposes of assessing costs, within the ambit of CPR r.45.29A or r. 45.29B. Accordingly, costs fall to be assessed by reference to section II.”

“It further follows that I agree with the judge that the outcome would have been the same even had the claim not exited the portal. The provisions of section III would not have come into play; and this would still have remained a section II case.”

Thus, the earlier decisions were upheld and a more favourable costs award made. It will be interesting to see if the rules committee now sets out the position in express terms, as alluded to by Sir Nigel in his conclusions. The decision will however lead to more advantageous awards not only in low value RTA claims, but in low value EL/PL cases also, to which the same provisions apply.

This article was featured in our July 2021 newsletter, see the full newsletter here.

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

Legal costs: Procedural Errors and Delay

Andrew McAulayLeave a comment

Andrew McAulay and Dominic Regan consider some recent cases and issues which arise from procedural defects and delay. Cases discussed in this video are:

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

Deductions from damages – what is said and not what is approved by the client

clarioncosts1 Comment

Professor Dominic Regan and Joanne Chase, senior associate at Clarion, take a look at the recent solicitor own client decision of Karatysz v SGI Legal LLP and the basis on which the Defendant successfully appealed a first instance decision of DJ Bellamy sitting at Sheffield District Registry of the High Court.

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

Part 36 – Important changes to Interest

Joanne ChaseLeave a comment

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

Avoiding Challenges to your Costs III: Talking about Money

Joanne Chase3 Comments

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

Preparing an estimate can seem daunting, but following these simple rules will make estimates easy:-

  • Estimates should not be generic
  • Plan the case and how much time each element will take, e.g:-
Pre-Action
Review client documents4 hours£400
Letter of Claim2 hours£200
Advice and correspondence with client6 hours£600
  • Be realistic about the time you will spend. We tend to underestimate how long things will take. Bear that in mind.
  • Do not overthink it. Include anything you think is likely to happen, but do not try to estimate for every eventuality.
  • Factor in disbursements, such as court fees, counsel’s fees and experts’ fees

Communicating with the Client

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.

Conclusion

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.

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

Footballers’ wives and their extraordinary budgets

Bethany CollingsLeave a comment

In the much-publicised libel claim of Rebekah Vardy v Coleen Rooney, each party was required to file a costs budget that detailed the costs incurred to date and the amount of costs they estimated would be incurred to trial.

The budgets were considered by Master Eastman at a brief preliminary hearing on Tuesday. Mrs Rooney’s sought estimated costs in the sum of £402,312 whilst Mrs Vardy’s budget sought estimated costs in the sum of £465,842. In addition, Mrs Vardy had incurred circa £431,000 in costs pursuing the claim to date.

Defending the level of costs stated within Mrs Vardy’s budget, Ms Mansoori, who is the barrister representing the Claimant, said that the budget “reflects the complexity, scope and scale of the legal and factual issues”.

Master Eastman commented that both budgets were “extraordinarily large”, and he urged the parties to try and reach an amicable agreement in the matter. He also ordered that revised costs budgets be filed in June.