Practitioners & Costs

Duties of legal practitioners

A legal practitioner shall not charge amounts in respect of legal costs in relation to contentious business specified as a percentage of the proportion of damage or other moneys that may be payable to his client, other than in debt collection matter. He may not purport to set legal costs to be charged by junior counsel as a percentage or proportion of costs paid to a Senior Counsel.

A legal practitioner shall not, without the prior written consent or agreement, deduct or appropriate any amount in respect of legal costs from the amounts of damages or moneys that be payable to the client in respect of legal services that have been provided.

A legal practitioner shall, whenever required to do under the following provisions, provide to his client a notice in clear language likely to be understood by his client, compliance with the following obligations. On receiving instructions, a legal practitioner is to provide the client with a notice disclosing the legal costs that will be incurred in relation to the matter or if it is not reasonably practicable to do so, set out the basis on which legal costs are to be calculated. Where it becomes practicable to do so at a later point, a notice must be given to the client providing the information as to legal costs.

The notice must specify the amount of legal costs, certified by the practitioners having been incurred at the time the notice is given, certified to be of a fixed nature or otherwise incurred or if it would be impracticable to do so, certify the basis on which they are to be charged, and insofar as practicable, certified by the legal practitioner to be likely to be incurred.

The notice is to set out details of VAT. It is to set out the basis on which amounts are to be calculated, explained by reference to principles of legal costs. It is to contain a statement of the legal practitioner’s obligation below   giving notice of factors which escalate costs.

If the matter involves or is likely to involve litigation, it is to outline the work to be done in respect of each stage of litigation process, the costs or likely costs or basis of costs involved, including likelihood of engaging a barrister, expert witnesses, or other service providers,

• a statement of certain obligation set out below in relation to retention of barristers and experts and witnesses,
• information as to the likely financial and legal consequences of withdrawal from litigation and discontinuance,
• information on the circumstances in which a client would be likely to be required to pay costs to other parties in litigation and information as to the circumstances in which it would be likely the costs would not be fully recovered from other parties.

Cooling Off Period

A period, not longer than 10 days must be specified, during which a practitioner shall not provide legal services in relation to the matter concerned unless the client confirms that he or she wishes to instruct the practitioner to continue to provide legal services or the below provision apply.

The exception is where legal services are required to be provided in the profession if the opinion of the practitioner were not to provide them would constitute a contravention of statutory requirement or would prejudice the rights of the client in a manner which could not later be remedied, or the court orders the legal practitioner to provide the services or where the matter involves litigation, and a notice of trial has been served in relation to the matter.

Where the practitioner becomes aware of the factor that makes legal costs likely to be incurred in a manner significantly greater than those disclosed or indicated in a notice relating to the matter, he shall, as soon as he become so aware, provide the client concerned with a new notice.

Instructing Barristers and Experts

Where the matter is subject of a notice involves or is likely to involve litigation, a practitioner must not, engage a barrister, expert witness or service provider without first, to the extent practicable ascertaining the likely cost or basis of cost of engaging the person, providing the client with this information and having complied with it, satisfying himself of the client’s approval, express or implied of the engagement.

A legal practitioner must provide his client with clarification in relation to a notice, as soon as reasonably practicable after being so requested by his client.

Where a solicitor, having received instructions in a matter, proceeds to instruct a barrister in relation to that matter, the obligation on the barrister to provide a notice shall be fulfilled where the barrister provides a notice to the solicitor. Duties owed by barristers under the latter provisions above are construed as owed to the solicitor.

The solicitor shall, where he considers it appropriate, or where requested to do so by the client, request the barrister to provide clarification in relation to notice provided. Immediately on receipt of a notice by way of clarification, it is to be provided to the client.

Agreement for Amount of Costs

A legal practitioner and client may enter an agreement concerning the amount, manner of payment, of all or part of the legal costs that are to be payable in relation to legal services. The agreement may include all the particulars required by notices above and if it does, the legal practitioner need not provide the statutory notice mentioned above.

An agreement shall constitute the entire agreement between the parties as respects the provision of legal services and no other amount shall be chargeable in relation to those services, except to the extent otherwise indicated in the agreement. An agreement shall, in an adjudication be amenable to adjudication by the Legal Costs Adjudicator.

Bill of Costs

A legal practitioner shall, as soon as practicable after concluding the provision of legal services in relation to a legal matter, prepare and sign a bill of costs, which shall contain particulars specified in the legislation and shall be in such form as may be specified in rules of court. The bills of cost is to contain the following:

• summary of legal services provided in connection with the matter concerned;
• itemised statement of the amounts in respect of the legal costs in connection with legal services;
• VAT registration number;
• where time is a factor, the time spent in dealing with the matter;
• the amount, where known to the practitioner, of damages or moneys that are recoverable or payable to, the client that arose from the matter;
• the amount of legal costs recovered or payable to the legal practitioner, including costs recovered from another party or insurer.

Where a solicitor, having received instructions from a client, instructs a barrister in relation to the matter, the obligation of the barrister to provide a bill of costs shall be fulfilled where the barrister provides bill of costs to the solicitor. The solicitor concerned shall immediately on receipt, provide the bill of costs to the client.

Explanation of Procedure to Dispute

The legal practitioner shall provide the client, along with a bill of costs, with an explanation of the procedure available to the client, should the client wish to dispute any aspect of the bill. The explanation must contain the following:

• that the client may discuss the matter with the legal practitioner;
• that the client is obliged to communicate to the legal practitioner the existence of a dispute on any aspects of the bill of costs, and the date and means by which this is to be communicated;
• that the legal practitioner is obliged to attempt to resolve the matter by informal means;
• that the client may have the dispute referred to mediation;
• that the client may refer the matter to adjudication of legal costs, including the contact information for the Office and potential cost of seeking adjudication;
• the date on which the legal practitioner may seek an adjudication, in the event that the bill of costs or any part of it remains unpaid.

The above provision does not limit rights of other parties such as to require the legal practitioner to submit a bill of costs for adjudication.

Agreement + Fixed Costs Agreement

Where an agreement has been made by a legal practitioner and his client, the agreement shall be set out in, or annexed to, the bill of costs relating to the matter to which the agreement relates.

Where an agreement concerns all the legal costs payable by the client, an invoice prepared by the practitioner containing a summary of the costs and outlay pursuant to the agreement, together with a copy of the agreement, constitute the bill of costs for the purposes of the legislation.

Where the agreement concerns part of legal costs, a summary prepared by the legal practitioner of the costs and outlays pursuant to the agreement, as respects that part of the legal costs, satisfy the above obligation.

Dispute re Bill

Where a dispute arises regarding a bill of costs, the clients may, within 14 days of the bill of costs being provided, send the practitioner a statement in writing setting out the nature of the dispute.

When the practitioner receives a statement, he is to take all reasonable and appropriate steps to attempt to resolve the matter informally. Where, having taken reasonable steps, he or she fails to do so, he is to inform the other party of the opinion.  The time limit for references to adjudication is suspended during the attempt to settle by mediation or other informal means. Failure by a client to pay a bill of costs within the time period is not to be interpreted as formal communication of the existence of a dispute.