News in brief – 17.01.2019

LSB approves ban on Costs Lawyers making unsolicited approaches

The Legal Services Board (LSB) has approved the Costs Lawyer Standards Board’s (CLSB) application to change the code of conduct to prohibit Costs Lawyers from making unsolicited approaches to potential clients.

The oversight regulator said the CLSB has not in the past made such a prohibition explicit because it did not anticipate that Costs Lawyers, as a profession, would need to offer legal services directly to private individuals.

“However, it has identified, through its recent supervision and disciplinary processes, a risk that individual Costs Lawyers may be making such unsolicited approaches. The proposed changes are therefore intended to address this risk.”

In approving the application, LSB chief executive Neil Buckley (pictured) said: “No issues of significance were raised in our assessment. We note from the application that the CLSB consulted on the changes and there was no opposition raised. We also note that as a result of a response from a consultee, the wording was amended from that originally proposed, to introduce the requirement in respect of referrals from third parties.

“The LSB recognises that where a regulatory risk has been identified through supervisory and disciplinary processes, it is sensible for an approved regulator to adjust its regulatory arrangements to address that risk.”


Government to review criminal legal aid fees schemes

The Ministry of Justice has launched a “broad review” of all criminal legal aid fee schemes, it announced last week.

Responding to the justice select committee’s most recent report on criminal legal aid, the ministry said: “In light of the committee’s recommendations on criminal legal aid and disclosure in criminal cases, the Attorney General’s review of disclosure and broader changes across the criminal justice system, we believe it is the time to think more widely about the future of criminal legal aid.”

The first phase of the review will be a scoping phase to determine its scope and remit, bearing in mind broader changes across the justice sector.

“This comprehensive review of criminal legal aid fee schemes would seek to deliver a final report, including any recommendations, towards the end of the summer in 2020. Alongside this, we would seek to share emerging findings with the professions throughout the review process.

“It is important to highlight that the ability to deliver against these dates would be dependent on the legal professions working with us to gather, build, provide and share qualitative and quantitative evidence, which must go far beyond the billing data we currently use.”


Ruling poses litigation risk to costs firms and draftsmen

A Court of Appeal ruling that an unregulated business engaged in the unlawful conduct of litigation by serving a claim on behalf of a litigant in person has significant consequences for costs litigation, a well-known Costs Lawyer has suggested.

In Ndole Assets Ltd v Designer M&E Services UK Ltd [2018] EWCA Civ 2865, the claimant issued proceedings as a litigant in person and sought around £600,000 in damages for breach of contract. CSD Legal then wrote to the defendant on Ndloe’s behalf, including draft particulars of claim and an expert report, and later served the claim. CSD is a firm of claims consultants specialising in construction disputes. Its sole director is unregistered (i.e. non-practising) barrister Alexander Dain.

The Court of Appeal found that service of a claim was an element of the reserved legal activity of the conduct of litigation, and that as CSD was not authorised to do it, service was unlawful. However, the court decided it was wrong to punish the litigant in person; it said that the Legal Services Act 2007 provided sanctions for the person who conducted a reserved legal activity without authorisation and not for the client.

Writing on his blog, Simon Gibbs of GWS Law, noted that it was common practice for firms of costs draftsmen and Costs Lawyers to purport to serve notices of commencement, replies and so on.

Costs draftsmen are not authorised for the purposes of the 2007 Act and, while Costs Lawyers are, it is only as individuals because the Costs Lawyer Standards Board does not regulate firms.

He said: “Any step taken in relation to costs litigation by a costs firm (other than a firm that is an actual firm of solicitors) must be taken by, and in the name of, the individual Costs Lawyer. A costs firm cannot go on record as acting for a party to litigation; it must be an individual Costs Lawyer and any further steps taken must be by the same costs lawyer (unless and until a notice of change is filed).”

He noted that the Court of Appeal found that, even if CSD had simply sent a letter to the defendant saying it acted for the claimant and enclosing the claim form by way of service, that would have been prohibited under the rules.

Mr Gibbs said: “It therefore seems inevitable that a court would conclude that service of a notice of commencement etc by a costs draftsman or a costs firm would be an unlawful act.”

The Act says that engaging in the unlawful conduct of litigation is a criminal offence with a maximum sentence of two years’ imprisonment, as well as contempt of court. Mr Gibbs said: “Something to think about.”

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Costs News
Published date
17 Jan 2019

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