The definitive decision on additional liabilities is expected next week when the House of Lords hears the appeal of Callery v Gray. But, will this be the end of the war or just another battle?
It was said that calling out a plumber cost almost the same per hour as instructing a solicitor; but not any more. The use of additional liabilities was to assist those who could not fund civil claims after the withdrawal of legal aid. Has it assisted the claimant or the claimant's solicitor?
Certainly the claimant has benefited from the absence of legal aid assessment, because there is no risk of the statutory charge anymore. Solicitors on a successful claim can be pleased with the success fee, be it 100% or 20%, on costs.
On reading the Callery transcript, the basic solicitors' costs show up as £1,981.03 plus vat and disbursements. These were then assessed by the district judge at £1,008.00 - a reduction of 49%. After the Court of Appeal judgment the gross costs still represented a reduction of 48% from the original claim.
Yet despite this judgment last July, over the past 12 months solicitors have seen reductions of between 58% and 23%. Under the Solicitors Act, however, the solicitors would have had to pay the costs of the assessment.
These reductions may be good for insurers, but, until the court applies proportionality through civil procedure rules, the high level of base charges made by these firms will require solicitors to keep a check on costs.
Amelans Solicitors may regard those dealing with inter partes costs as "costs monkeys", but with reductions in excess of 40% off base profit costs being made, the accuracy of these charges need examination.
Regardless of the House of Lords judgment, solicitors and costs draftsmen will still challenge base costs and additional liabilities until claimants' solicitors present reasonable and proportionate costs. And until they properly follow Rule 15 of the Solicitors Professional Guide and Chapter 13 on overcharging.
We frequently see conditional fee agreements (CFA), which have hourly rates between solicitor and client, well in excess of those that would be allowed inter partes. This is effectively an attempt to show the indemnity principle is not being breached.
If a Grade Three trainee solicitor will attract only £90 per hour inter partes, why charge them out at £250 per hour between solicitor and client? If the client was the driver of a car or employed with a local authority it is probable they may have before the event legal expense insurance or have access to a union legal aid scheme.
Instead of applying tick box risk assessment, where a rear end collision involves an important issue of law and may be a test case, consider the facts of the instructions and apply them to causation and the issues of established cases on negligence. This is the correct approach to be adopted.
Of course under no win no fee the claimant is not bothered with technicalities. He or she is not going to complain of overcharging because the claimant is not paying the bill
All the claimant wants to know is that if he or she loses there will no bill from the solicitor nor any liability for the defendants' costs.
More attention should be given when taking instructions from claimants, in applying professional guidelines. If there is a 30% reduction or more on base inter partes costs, the court should take note and apply sanctions.
Robin Darby, head of costs, and Remmy Baba, partner, at Putsman.WLC Solicitors