Half of Costs Lawyers are busier than ever as the legal market continues to recover from the depths of the pandemic, with former clients suing their solicitors constituting a fast-growing area of practice, new research has shown.
The latest member survey carried out by the ACL also found muted enthusiasm for the interim conclusions of the review of guideline hourly rates (GHR).
Some 128 Costs Lawyers – approximately a fifth of the profession – completed the survey and 51% said they were busier than ever, compared to 37% who said so six months earlier. Only 8% said work has dropped off since the start of the pandemic, whereas 15% said the same last year.
While one in seven (14%) said their firms were having to recruit to keep up, the 13% who reported that clients were taking more time to pay their bills were less positive. For nearly a third (31%), working from home has become permanent.
The six months between surveys showed a move towards an acceptance of remote hearings, with nearly half (48%) praising how the courts have responded to the pandemic and saying it would be hard to go back to how it was before, up from 39% last time.
Strikingly, 46% of Costs Lawyers said they have seen an increase in the number of solicitor/own client challenges, which is likely to reflect the growing industry of personal injury clients being encouraged to sue their previous lawyers for deductions made from their damages.
The profession is awaiting the Court of Appeal hearing in Belsner over what constitutes a client’s informed consent to deductions.
This type of work has been criticised by some lawyers who see this as the profession ‘eating itself’ and that it reflects poorly on the profession. Asked for their views, 52% of Costs Lawyers believed that, if the rules were broken, then litigation of this nature was fair enough. However, 31% reckoned it was giving costs professionals a bad name.
The Civil Justice Council working group on the GHR is currently reviewing the responses to the consultation it issued indicating modest increases in the current rates.
Only 23% of Costs Lawyers considered the proposals to be a reasonable outcome that solicitors should welcome, while 36% were more grudging in agreeing that “it’s not great but it’s better than nothing”.
One in five said that basing the GHR on the rates awarded by judges – rather than the fees charged by lawyers – made them pointless because that way they just perpetuated the status quo, while a similar number said there needed to be a fundamental review of the purpose of the GHR instead.
Other findings included that 27% of Costs Lawyers have seen an increase in the number of applications to vary a budget in light of the new rule 3.15A that came into force last October, while 13% have seen greater interest in using alternative dispute resolution (ADR) to resolve costs disputes.
ACL chair Claire Green (pictured) said: “Costs Lawyers have delivered when their clients needed them most by maximising the proper recovery of costs due to them at a time when cash flow has never been more important. Costs law has become increasingly complex and solicitors are realising that, in the same way they market themselves as specialists, they should go to the experts on costs.
“We hope that the GHR working party is listening to the ACL and others, and rethinking its proposals. Basing its proposed figures on the small number of cases which have reached detailed assessment risks the GHR merely reflecting what judges awarded on assessment rather than informing courts of the ‘broad costs of litigation’ – which was their original intention.”