Costs lawyers have forecast that disputes over deductions from personal injury damages will not end with the high-profile Belsner case.

Lawyers leading cost recovery cases were defeated in October as the Court of Appeal ruled that solicitors’ deductions in the case had been fair and reasonable and did not need to be paid back.

That decision may have put paid to hundreds of other cases stayed pending the outcome, as master of the rolls Sir Geoffrey Vos said it was ‘unsatisfactory’ for such claims to be brought through court and indicated that clients would be better served taking their complaint to the legal ombudsman.

But a survey of members of the Association of Costs Lawyers, conducted a week after Belsner was handed down, found just 30% thought it would mark the end of court-based challenges to deductions. Instead, 60% said there would still be challenges based on the ‘fair and reasonable’ test for non-contentious costs.

Belsner’s firm, checkmylegalfees.com, has already said the decision turned on its own facts and that the scope for testing the assessment of solicitors’ profit costs may even be wider in future.

Just over half (53%) of costs lawyers hoped it would be the trigger for a review of the 1974 Solicitors Act, with four in five saying reform was needed, especially to remove the preliminary arguments over whether a bill is actually a bill (eg, final bills, interim bills, statute bills, Chamberlain bills).

ACL chair Jack Ridgway said: ‘It is no surprise that costs lawyers are so keen on updating the Solicitors Act 1974 – we see on a day-to-day basis how it is not conducive to the efficient and effective resolution of costs disputes.’

Respondents to the survey said they were more in demand than ever, with 58% reporting they had grown their practices or departments in the last year.

There appeared to be a mixed attitude to the potential threat of extended fixed recoverable costs to the need for specialist costs lawyers, with nearly half saying it would not affect them personally but one-third fearing the impact on others in the profession. Around half also thought it would create opportunities for costs lawyers to adapt and offer services such as project management.

Consistent with previous years, only 19% of costs lawyers said solicitors stuck to budgets – 44% said they sometimes went over budget and 23% said this always happened.

Ridgway added: ‘Fixed costs will reduce the number of disputes in lower-value cases but our system of litigation means there will always be demand for the expertise of costs lawyers – as shown by how many of our members are busier than ever.’

 

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