ACL chairman Iain Stark said: ‘Solicitors need to sit up and take notice of the Harrison ruling, as too many are not approaching costs budgeting seriously enough. There are likely to be a few painful experiences before the message really gets home that if you want to get paid for the work you do, you need to plan and budget it properly. The survey, which conducted a poll of costs lawyers has found that just five per cent worked with solicitors who always stuck to their budgets – up slightly from two per cent the last time they were asked, in autumn 2016. Two-thirds (67 per cent) said their solicitor clients ‘sometimes’ went over budget, while 26 per cent said this always happened.
Harrison ruling
In Harrison, the Court of Appeal said that a costs judge on detailed assessment should only depart from the approved or agreed budget if there is 'good reason' to do so. This puts pressure on solicitors to get their budgets right. It also means solicitors should be updating their budgets if required as the case progresses, and the survey indicated a modest improvement, according to the body. Last November, 18 per cent of costs lawyers said the number of applications to update a budget was increasing with that the figure now up to 23 per cent. Similarly, the number of costs lawyers who said they had never seen such an application fell from 32 per cent to 27 per cent.
Budgeting too early in proceedings
One problem solicitors face is that budgeting takes place too early on in proceedings, the survey suggested. Half of costs lawyers said that instead of doing it at the first case management conference, as now, the hearing should be held later, once the course of the litigation is clearer. Some 29 per cent of those surveyed supported budgeting in stages, according to where the case was at. The poll also found that judges continued to be a problem. Given a set of statements on how costs management is working, the most popular (ticked by 63 per cent of respondents) was that ‘it depends on which judge you’re before’.
New electronic bill of costs
Another danger heading the way of law firms, according to the survey, was the new electronic bill of costs, which the Civil Procedure Rule Committee last month decided will be rolled out for compulsory use in the Senior Courts Costs Office and country courts from April 2018. Half of respondents said solicitors ‘haven’t got a clue’ that this change is coming, while 43 per cent reported that ‘some do’.
Time to get ready
ACL chairman Mr Stark concluded: ‘The survey shows that the extra time to get ready for the new bill of costs will benefit solicitors and, indeed, some Costs Lawyers. While a lot of lawyers may be happy to continue in the same way they have done for many years, introducing what is essentially a spreadsheet should help both the parties and the judge, making the process fairer as well as cheaper. As the courts head towards a digital future, the world of costs can at least start making better use of open-source spreadsheets.’
Email your news and story ideas to: [email protected]
