GOOD COSTS SERVICE: UPDATED GUIDANCE FROM THE LEGAL OMBUDSMAN
Solicitor and own client costs disputes have featured on this blog many times. There have been several major cases in recent months. The issue of the information given to the client and their understanding of how, and how much, they will be charged is a recurring issue. The third edition of An Ombudsman’s View of Good Costs Service has been published this month. It is most probably mandatory reading for any lawyer who charges a client for their services. A copy of the guide is available here
THE THREE KEY PRINCIPLES IN RELATION TO LAWYER AND CLIENT COSTS
“LeO’s position on these complaints has three key principles:
A client should never be surprised by the bill they receive from their lawyer;
If you intend – now or in the future – to charge your client for something, you should tell the client clearly, as soon as you reasonably can; and
Keep clear and accurate records of all the cost information you provide, including any confirmation from the client that they understand what they will be charged.”
EXAMPLES FROM LITIGATION
A key area of dispute recently has been shortfalls in costs and fixed costs in personal injury litigation. The key issue is informed consent.
“Dr T instructed firm R to help her with a personal injury claim. The claim was successful and 70% of firm R’s costs were recovered from the losing side. Firm R then tried to claim the 30% balance from Dr T.
We decided that, because firm R had explained to Dr T that she would be responsible for paying the shortfall of any costs that could not be recovered from the other side and because Dr T had signed to say she understood this, the firm was entitled to charge her.
We were satisfied on the facts that Dr T had made the informed decision to proceed with the work and reimburse her solicitors for any reasonable costs they could notrecover from the opponent. The service was, therefore, reasonable.”
GIVE GOOD COSTS INFORMATION AND KEEP RECORDS OF THE INFORMATION AND ADVICE GIVEN
Another key theme is the need to keep records of the information and advice that the client was given. [As an aside, relying on the principle of “that is what I always tell my clients” gives rise to dangers. A lawyer may have many clients, a client usually has only one lawyer. When litigation on these issues comes down to accuracy of memory the lawyer – who should have kept a record – is always at a disadvantage].