MRN’s Top Ten Costs Tips 2020

Get your retainer in order from the outset and review it as the case progresses to ensure it continues to cover the action – this is particularly relevant for commercial clients where the initial retainer may only cover a specific piece of work but the case progresses and the retainer is not updated to cover the work done outside the scope of the retainer. However, it is also important for clinical negligence/personal injury practitioners particularly where a Claimant attains majority or passes away and it is necessary to update the retainer or enter into a new one to ensure the costs continue to be covered.

Also be careful using template retainers, we regularly see template retainers being used which contain conflicting terms (i.e. the retainer will say in one place that it covers all work done from receipt of instructions but in another place will say that it only covers work from the date it was entered into) or which refer to incorrect parties and incorrect accident details. It is important the retainer is accurate given it can be the difference between you recovering costs and not recovering them.

Remember your obligations under the SRA Code of Conduct to keep clients updated with regard to costs. 2.03 Information about the cost (1)    You must give your client the best information possible about the likely overall cost of a matter both at the outset and, when appropriate, as the matter progresses.

Gemma Taylor – Senior Costs Draftsman & Advocate
Make sure you’re not underselling yourself when you set your hourly rates – I often think that client’s hourly rates are too low and should be looked at in more detail, especially in particularly complex cases where it’s possible to send out hourly rate update letters if you choose to increase.

In budgeted matters, if you intend to increase your hourly rate this should be considered at the point the budget is prepared as otherwise the budget will not factor in the increased rate and as a result you may be limited to the budgeted hourly rates when a Bill of Costs is prepared where applying the increased rates would take you over budget.

As of 1 October 2019 Practice Direction 3E, para 7.4 has been updated so that all costs incurred up to and including the CCMC should be dealt with as an “incurred cost” in the Precedent H. Given the latest deadline for a budget (unless otherwise ordered) will be 21 days before the CCMC, this will create a period of time where costs will need to be estimated and included within the incurred column on the Precedent H. Whilst the majority of the costs to be incurred after the budget has been prepared, up to and including the CMC will fall within the “CMC phase”, it is important to be mindful of the fact that other phases in the budget may be impacted so as to avoid any issues later on when preparing the Bill of Costs. For example, after the budget has been prepared, any work to be completed on pleadings or disclosure before the CMC would need to be accounted for by estimated costs within the incurred column in the Issue and Disclosure phases. It is also important to ensure that your cost budget is up to date ahead of a CCMC so as to ensure the accuracy of any “estimated incurred” items in the budget.

On the 7 October 2019 the MOJ published an updated Guidance Note on Precedent H. The revised guidance supports the changes made under the 109th update to the CPR. It’s important not to overlook the changes, particularly to phasing for example, Counsel’s brief fee for Trial is now to be included within the Trial Prep phase rather than the Trial phase.

Be clear in your assumptions within your costs budget, particularly in respect of the disclosure phase. Where possible, state exactly the level and scope of disclosure you anticipate there will be. If the level and scope of disclosure is greater than anticipated, there will be a better chance of a revised budget being agreed/approved.

Keeping a close eye on agreed/approved Budgets will also assist with maximising recovery. Unless a good reason to depart from the Budget can be established (and the threshold for doing so is high), a Solicitor will be limited to the figures in the agreed or approved Budget and quite often we find when preparing Bills of Costs at the conclusion of claims that Budgets have been exceeded and as a result costs are essentially being written off. The costs incurred in relation to each phase should be monitored as the claim progresses to avoid any general overspend as such overspending will not be sufficient to provide a good reason to depart from the Budget. Furthermore, if there is a significant development in the litigation, the Budget should be updated and agreed/approved at the earliest opportunity to ensure the additional costs incurred as a result are recoverable.

When taking over a file from another firm and the matter has been Budgeted, be aware of the potential issues this may cause you if a particular phase still requires work and there is a possibility that the previous Solicitor may have already utilised all the funds. A certain level of review is required in order to establish whether there are any funds left and whether an Application is required at that point.

Holly Archbold – Head of Budgeting – Solicitor & Advocate
When preparing a cost budget, where possible, obtain quotes from Counsel and experts for their estimated fees to ensure that the cost budget is as accurate as possible and to avoid situations of overspending.

Watch your words

If you have any further questions or require MRN’s assistance, please Ask the Experts!