It's a Sin

I started training in costs in July 1987. The Pet Shop Boys were at number one with "It's a Sin". Perhaps it was an omen.

In those days costs draftsmen seemed to deal with a much wider variety of work on a daily basis. Legal aid was available for everything under the sun, and virtually all solicitors dealt with legal aid to a greater or lesser extent. Justice was already pretty accessible to be honest, and as a result every type of case imaginable headed to us... from divorce, through DVMPA claims, to boundary disputes, Inheritance Act, Court of Protection, medical negligence and...perish the thought...legally aided personal injury cases.

As an aside, and I may be revealing my socialist tendencies here, but I have never been entirely clear what was wrong with a system where the "up front" costs of pursuing a claim for an injury to a member of the general public were paid for by, radical idea here - the general public; of course once the merits and "cost / benefit" analysis had been carefully vetted by an entirely impartial body. In successful cases there was no net cost to the Legal Aid Board, and thus to the public. The solicitors got paid in full by the loser, and it was not beyond the wit of man to "tweak" the system so that the losers also paid for the unsuccessful cases. Legal aid with success fees, and with the ability for the tax payer, through the Legal Aid Board, to keep a careful eye on what was being spent in each case as it progressed . If only......

Anyway the proliferation of Conditional Fee Agreements saw a decline in the "general practice" firms, and an explosion in CFA only, PI only, pile 'em high and sell them cheap (at least that was the slogan) firms of lawyers. A new legal universe was born and  from the big bang there span off a galaxy of support industries - claims management companies, medical agencies, referral agencies, ATE brokers, defendant costs negotiators, costs counsel and "claimant only" firms of costs draftsmen and costs solicitors. With everyone of those needing a slice of the cake, it is hardly a surprise that hourly rates have increased well beyond inflation ever since. Let's pick on Watford for an example (I'm a Luton Town supporter by the way, so I'm entitled to....it's my birthright). Between 1999 and 2010 the guideline rate for a grade A solicitor in Watford increased from £135 to £217 per hour; had the increases simply kept pace with inflation they would have gone up to just £166 in the same period.  Central London is the same - £52 per hour above what an "inflation only" increase would have delivered - in fact there has been a similar increase throughout England and Wales.

So, who are the main culprits?. Well, I have to say that in my view it is the costs industry. This is no "mea culpe" though..... I am talking, quite specifically, about the industry of costs negotiators, both claimant and defendant, who have found a safe harbour in the costs firms that cater in factory scales exclusively to one or other side of the great divide. Previous posts refer to examples of outrageous escalation of costs caused and paid by defendants on detailed assessment - see "The Toenail Case" for example, in which the defendant's negotiators cost their insurance clients at least £5,000 and the "Costs Estimate Case", where the insurers forked out some £10k more than they needed to (look out for the next post, which will tell the incredible tale of a defendant costs negotiator running an argument on a £4k bill that ended up costing their insurer clients more than five times that amount!). 

But it is not all down to defendants' costs negotiators. On a recent hearing in Manchester County Court I represented a local authority who was a losing defendant in a personal injury claim. That, in fact, was the very point of my rambling opening paragraph. We do both Claimant and Defendant work, and have a bit of variety on our books. I don't mean Saturday Night at the Palladium by the way, although we can recommend a comedian or two! Which takes me back to the case in point.......

Costs claimed at £51k. Allowed at £29k. Our part 47 offer at an ultra reasonable £34k. Costs of assessment? Payable in full by the Claimant at £6.5k. So the Claimant's solicitors have lost out on £12,500 by refusing an entirely reasonable offer. Perhaps the most shocking thing in this sorry affair was that the Claimant's specialist costs solicitors claimed to have spent more than 24 hours preparing the bill, which was allowed at a still rather generous 12.

Messrs.Lowe and Tennant were quite right....it is, indeed, a sin!