Costs Lawyers report strong year and bullish approach to fixed costs

29 November 2023

Costs Lawyers have had a good year, with a healthy proportion reporting growth in excess of 10% and many bullish about the impact of more fixed costs, the annual ACL member survey has revealed.

It also found support for the idea of courts ordering parties to engage in ADR in an effort to resolve budget issues and overwhelming enthusiasm for a change in the law to allow Costs Lawyers to take up judicial posts.

More than half (53%) of respondents said their firms/departments had seen turnover up in the last year, the large majority by more than 10%. Two-thirds of Costs Lawyers said they had more work (14% had less), leading 37% of practices to take on more staff.

Costs Lawyers were positive despite the extension of fixed recoverable costs last month, with 48% predicting that there will still be plenty of disputes under the new regime and 52% seeing new opportunities for the profession. Though 28% of respondents feared that jobs in costs could go as a result of the extension, a similar number were looking to diversify into cases that are not affected, while some thought it would promote Costs Lawyers as project managers.

Earlier this year, in Hadley v Przybylo, a serious personal injury claim with a claimant budget exceeding £1m, Master McCloud took the unusual step of ordering the parties to engage in ADR to seek to resolve issues in the budget before she would budget any outstanding phases.

She reported that it was a successful exercise. The parties used qualified Costs Lawyers and all but one matter had been agreed on the budget, “which I think speaks for itself in terms of saving time and money”.

More than half (54%) of Costs Lawyers surveyed said the order was a good idea and they would like to see more of them.

However, ADR as a way to resolve costs disputes still has some way to go. While 20% said they had seen greater interest in mediation over the past year, a quarter said they had still never been involved in one.

There was strong support for the recommendations of the Civil Justice Council’s costs review, published in April, with 70% saying the guideline hourly rates (GHR) that came into force two years ago were already out of date – earlier this month, the Master of the Rolls announced they would be increased to reflect inflation from 1 January 2024, as recommended by the review.

Two-thirds of Costs Lawyers agreed too that barristers should become subject to GHR, and that costs budgeting should become more tailored to suit different work types and venues, including ‘costs budgeting light’ for claims worth less than £1m.

This comes with just 11% of respondents saying that solicitors were getting better at sticking to budgets; 25% said they always went over-budget, and 51% that this happened some of the time. Some 37% said the number of applications to vary budgets was increasing.

Other survey answers included 20% saying they were seeing more instances of courts undertaking summary assessments, respondents split fairly evenly on whether use of the electronic bill should be extended, a third supporting a rise in the provisional assessment beyond £75,000, and only 14% reporting a reduction in former clients challenging their solicitors’ bills since Belsner.

Costs Lawyers are not currently able to apply for judicial posts – even as costs judges – but 93% think they should be allowed to.

ACL chair Jack Ridgway, who sat on the CJC costs review, said: “Costs Lawyers have surfed fast-moving waters for many years now and our latest member survey shows how resilient and successful they continue to be at it. We have responded to change by making greater use of our full skillset – such as by helping law firms and clients manage costs from the start, rather than just sorting them out at the end – and the result is more work and significant growth for many.

“We know better than anyone how the costs management regime can be improved and intend to play a full role in its reform. It is gratifying that our skills and know-how are being recognised, and the ACL sees no reason why that should not extend to judicial appointment.”

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29 Nov 2023

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