The role of the costs lawyer, in personal injury cases, has traditionally been to secure the best outcome for instructing solicitors on behalf of a receiving party following litigation. This was particularly the case prior to April 2013 when the loser normally paid the whole of the costs, success fees and ATE Insurance. From April 2013 clients became responsible for the success fees and, in most cases, the insurance premium. For the first time, in many years, lawyers were deducting these costs from their clients’ damages. This has opened the door to disputes between solicitors and their clients over costs.
This has been highlighted by the recent case of Herbert v HH Law Ltd  EWCA Civ 527 where the Court of Appeal upheld the client’s claim for a reduction in the success fee from 100 % to 15% in a case where there was no real risk to the claimant on liability. Prior to this, many firms had adopted 100% as a success fee in all cases with a cap at 25% on general damages and past losses. It had, in effect, become a standard 25% deduction. The Master of the Rolls reminded us all that the level of success fee depends on the level of risk –
‘I do not consider that either HH’s justification for its charging model or the 25% cap answer the point that in this country, in the context of a conditional fee agreement, the amount of a success fee is traditionally related to litigation risk, as reasonably perceived by the solicitor or counsel at the time the agreement was made.’
Most commentators predict that this will lead to an upsurge in the number of cases brought by clients to contest their lawyers’ charges. According to a recent article in Litigation Futures, many costs lawyers see this as a business opportunity. This is a significant change of direction.
“It is now six years since the introduction of LASPO and we are still seeing personal injury solicitors struggling with having to deduct their success fee from clients’ damages, and other solicitors displaying sloppiness in some of their billing practices.” – Claire Green, ACL Chair. Costs lawyers could therefore be instructed to assist clients who wish to contest the charges.
I would say that costs lawyers do in fact have a more important role here. We can work with solicitors in order to ensure that their retainers are safe from attack. We can assist firms in ensuring that that their house is in order in the first place. We can check existing documents, suggest amendments and even prepare a complete overhaul if necessary.
Please get in touch with me for a free confidential chat and potentially protect yourself later down the line