Lawyers have warned that costs-chasers will be emboldened to pursue law firms who do not respond adequately to the extension of fixed recoverable costs (FRC).

From next month, the FRC regime is set to be extended to most civil claims valued up to £100,000 and it seems inevitable that some firms will seek to make up any shortfall from clients’ damages.

That could alert firms who have made it their business in recent years to bring claims against legal businesses on behalf of their former clients, alleging that there was not informed consent to deduct anything.

Speakers at the Clarion Costs conference in Leeds yesterday said that while this work had previously involved relatively small amounts from low-level personal injury claims, the stakes are much higher now.

James Miller, barrister at 18 St John Street, said costs recovery claims had the ‘potential to explode’. Steven Turner, barrister with Parklane Plowden, added: ‘The likes of checkmylegalfees have been criticised in the Belsner case for running these cases which could be dealt with in other ways, but here we are talking about thousand of pounds so that criticism is not valid anymore.’

The panel of expert speakers at the conference almost all agreed that cost recovery claims will increase after 1 October.

Turner said financial pressures on firms will increase after the fixed costs extension and it would be ‘reasonable to assume’ more solicitors will claim the shortfall from their clients, with more disputes as a result.

He stressed ‘approval rather than consent’ on client retainers will be key to avoiding any future litigation and said the burden was on solicitors to ensure this.

‘It is your correspondence and file notes that are going to dictate whether you are on the wrong side of these arguments,’ added Turner. ‘If you can demonstrate approval then the presumption will operate in your favour.’

In a blog for the Association of Costs Lawyers last week, Amy Dunkley, a senior costs lawyer with Bolt Burdon Kemp, said the most important step for practitioners to take before October was to update funding arrangements.

‘Retainers and client care documents should be considered to ensure that a shortfall of unrecovered costs is permitted, should fixed costs apply,’ she added. ‘Clients must be provided with the best possible costs information so they are able to provide informed consent to any shortfall. We may see an increase in solicitor-client assessments due to the uncertainty of case precedent surrounding informed consent, in addition to the inevitable satellite litigation resulting from the FRC extension.’