Solicitor Costs and Legal Costs
This website is aimed at demystifying solicitors' costs and legal costs in civil and family cases, although the basic principles also apply to criminal cases. Legal costs are one of the biggest areas for complaint to the Legal Services Ombudsman. Whether you are considering instructing a solicitor or you have received a bill from a solicitor, you need to know what to look for, how solicitors' charges and solicitor client costs are calculated and your rights.
Solicitors' costs are sums paid for legal services and include fees, charges, disbursements, expenses, remuneration and any additional liability incurred under a funding arrangement. The costs cover all lawyers, as the solicitor is the gatekeeper for other professionals on a case to be paid.
Solicitors are only entitled to be paid by their client or the Legal Services Commission/Central Funds, and then only pursuant to contract, Court Rules or a Court Order. Where the costs are paid by someone else they are deemed to be for and on behalf of the client.
Solicitors call their charges "profit costs" because they include a profit element. Their costs can be based on time, a percentage basis, capped or fixed. The costs which are payable are calculated according to the contract, known as the retainer. This forms the fundamental basis of all solicitors' costs.
There are 2 main sides to solicitors' costs, namely "between the parties" (formerly inter-partes - what the other side have to pay) and "solicitor/own client" costs (what you have to pay your own lawyer). Inter-partes costs are usually costs that have been "reasonably incurred", known as standard costs. Solicitor/own client costs are governed by contract law and are payable unless "unreasonably incurred", the indemnity basis. The different emphasis is important. If costs do not appear reasonable, but are not clearly unreasonable, the other side do not usually have to pay them while the client will.
The solicitor is entitled to charge the client for any shortfall between what the other side have to pay and what the client has to pay and this may eat into any damages you recover. Even worse, the costs are normally payable irrespective of whether you win or not. This is one reason why "no win, no fee" agreements are so attractive to clients. However, clients rarely appreciate that the solicitor is entitled to seek to charge them for any difference in what they have agreed to pay and what the other side have to pay even on a no-win, no-fee agreement.
Even more importantly, the solicitors are entitled to be paid even if the other side do not pay. The legal profession often refer to the "man of straw" who has no money and should never be sued for financial gain. Solicitors are supposed to perform a costs/benefit analysis both at the start and during a case, where they consider how much you are likely to have to spend compared to the value of what you are pursuing. They should also be considering the prospects of recovering that from the other side should you win.
You need to know what you are doing when you instruct a solicitor and how to challenge the costs at the end. If you get it wrong at the start you may have only very limited options when the bill arrives. If you are about to instruct a solicitor you should check out the basics.
You have a very limited time to challenge your legal costs. If you are concerned about the amount your solicitor has charged you then you should follow this link for further guidance.
The solicitor is in a position of knowledge and therefore power within any relationship. As a result the Court expect high standards at the start, during the case and at the end. In particular, a solicitor can only sack a client for good reason, on notice and within the terms of the contract. While most cases we deal with are kept low profile, some of our cases actually change or affirm the law and make the Law Reports as a result. A recent example of a case where we successfully argued that the client should not have to pay as a result of a breach of the solicitor's duties are Thomas v Butler t/a Worthingtons.
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