The landscape of solicitor-client costs disputes remains largely unchanged, despite efforts by the Court of Appeal in 2022 to address these issues through the Belsner case.
Few costs lawyers have reported a significant reduction in disputes between solicitors and clients. The Association of Costs Lawyers (ACL) conducted a survey among its members, which revealed that only 12% noticed fewer clients challenging solicitor bills after the Belsner ruling. This decision aimed to reduce the frequency of such disputes, but its impact appears limited.
A working group within the Civil Justice Council is considering updates to the costs rules under the Solicitors Act of 1974, as recommended in the Belsner case. This group aims to better align the statute with current practices and reduce disputes over legal fees.
Interest in mediation as a resolution method for costs disputes has grown. Nearly 24% of surveyed Costs Lawyers observed increased interest in mediation, although another 23% have yet to engage in this process.
Recent court decisions reflect ongoing issues in costs management. In two high-profile cases, claimants with exaggerated cost estimates were ordered to cover the defendant’s costs, yet only 9% of the survey respondents experienced similar judgments.
Budget adherence remains a challenge within the legal profession. According to the survey, only 10% of solicitors consistently adhere to their financial plans. The majority either occasionally or consistently exceed their budgets, highlighting a persistent issue.
The profession continues to expand, with over half of Costs Lawyers reporting growth in their firms or departments. This growth is primarily attributed to increased workload, recruitment, and diversification into new areas. However, some expressed concerns about the feasibility of the fixed costs regime introduced in October 2023. The £500 fixed fee poses challenges, with 39% of respondents deeming it insufficient for the tasks involved.
Jack Ridgway, chair of the ACL, acknowledged the difficulties in changing entrenched behaviours in the legal profession. He noted that some firms base their business models on helping clients contest fees, possibly explaining the lack of change. Ridgway also praised the professionalism and growing demand for Costs Lawyers despite broader economic challenges.
The ACL is further promoting access to the profession by offering fully funded scholarships to two students annually. This initiative aims to enhance social mobility by supporting potential candidates who might otherwise face barriers due to educational or financial limitations.
The ongoing solicitor-client costs disputes signify the intricate dynamics of legal fee negotiations. Although the profession is witnessing growth and adaptation, particularly through mediation and educational initiatives, lasting change in solicitor behaviour seems gradual. Continued reforms and discussions within legal frameworks are essential to address these persistent issues effectively.
