Dunne: Is ombudsman best placed to handle cases like this?
Checkmylegalfees (CMLF) came out fighting yesterday in the wake of the Court of Appeal’s criticism of its business model, pledging to keep on “holding solicitors to account”.
The Court of Appeal, led by the Master of the Rolls, Sir Geoffrey Vos, expressed unhappiness with the likes of CMLF in bringing “expensive High Court litigation to assess modest solicitors’ bills in cases of this kind”.
He said they would be better suited going to the Legal Ombudsman (LeO) instead – the organisation told Legal Futures that it stood ready to receive them and would be looking at the issue of informed choice.
CMLF has brought cases for several years on behalf of clients dissatisfied with the fees they have paid solicitors, particularly in relation to deductions made from damages in personal injury cases.
In a statement, CMLF – a trading name of the law firm Clear Legal – said it was “disappointed” with the ruling.
It explained: “It seems illogical that having expressed clear dissatisfaction about charging practices in the personal injury sector, and having made express findings in this case that Miss Belsner’s solicitors did not comply with the SRA code of conduct by failing to provide her with the best possible information about the likely overall cost of the case, and failing to ensure that Miss Belsner was in a position to make an informed decision about the case, the Court of Appeal nonetheless have found in favour of Miss Belsner’s solicitors.”
The statement argued that, rather than providing clarity on the assessment of costs between solicitor and client in portal cases, the ruling raised more questions than it provided answers.
The court also made it “very clear that this decision, particularly regarding the amount of such costs, turns on its own facts”.
“It has found that the correct test for the assessment of solicitors’ profit costs in portal cases will now be the ‘fair and reasonable having regard to all the circumstances of the case’ test applicable to non-contentious business rather than the far narrower test of ‘reasonableness’ alone that is applicable to contentious business.
“What is ‘fair’ will, of course, need to be determined on a case-by-case basis but may well result in a less mechanistic approach than hours multiplied by rate.”
CMLF also drew attention to the court’s criticism of retainers in which clients agreed to a costs regime that allowed solicitors to charge “significantly more than the claim is known in advance to be likely to be worth”, only eventually to waive most of those fees.
“Checkmylegalfees.com remains committed to holding solicitors to account where their legal fees are unclear or unfair, whether this be by the Legal Ombudsman or by the court process.”
Robin Dunne, one of the barristers at Gatehouse Chambers who acted for CMLF, said the ruling – in particular the finding that cases that settle in the portal were non-contentious business – raised a host of technical issues around billing and retainers that solicitors would have to address.
He went on: “The comments of the court as to bringing of High Court proceedings to assess modest bills are obiter. They were no part of the grounds or list of issues in either Belsner or Karatysz.
“It is questionable whether many clients – or indeed solicitors – would agree that the Legal Ombudsman is a more effective way of bringing disputes about bills.”
Mr Dunne argued that there were “real questions” as to “how the court can suggest that the ombudsman is a more effective method of disputing bills” when it had no evidence to back this up.
Further, he asked how the comments sat with a regime that has existed “for hundreds of years” whereby a client has a statutory right to assessment of their fees by a judge.
He said: “Personal injury solicitors who deal with these cases will of course be pleased that the appeal has been allowed.
“In my view, this is not the end of the skirmishes between solicitors and clients, which arise because of the Jackson report and LASPO. It may be that the battles move to other areas, but the battles are likely to continue.”
A LeO spokeswoman said: “We do already see complaints of this nature, with issues relating to costs and cost information frequently featuring in the complaints we receive.
“When considering these complaints we would look to see that lawyers have complied with the principle of informed choice. Our scheme rules also ensure that in determining what is fair and reasonable, an ombudsman will take into account what decision a court might make and the relevant conduct rules.
“Consumers should continue to bring a complaint to LeO if they believe they received poor service in relation to costs information/deductions.”
Mr Dunne also predicted there would now be “a concerted push” to update the Solicitors Act: “All sides agree that it is hopelessly out of date and requires urgent attention.”
It was a point taken up by Jack Ridgway, chair of the Association of Costs Lawyers. He said: “The decisions will have a significant impact on solicitors’ retainers and how challenges to their costs are dealt with.
“They also presage significant reform to the costs system, not least the outdated distinction between contentious and non-contentious business in an era of pressure to resolve disputes without issuing proceedings.
“Given the particular authority of the bench that sat in these cases, our specific hope is that the process to reform the costs provisions in the Solicitors Act 1974 will finally begin. All roads lead back here and change is needed urgently.
“Legal practice has evolved a great deal over the past 48 years and the regime is simply not up to the task of settling costs disputes quickly and efficiently. Without this, and despite the court looking to close down challenges to deductions from damages, we will still see plenty of cases on solicitors’ bills and retainers.”
The Law Society intervened in Belsner. A spokeswoman said: “It is crucial that solicitors can be paid fairly and reasonably for the vital work they do. This judgment upholds that important point…
“While this judgment provides some welcome clarity, it is clear that much more needs to be done to ensure the statutory framework underpinning solicitor-own client funding agreements and their assessment is fit for purpose.
“We would urge the government to consider this at the earliest opportunity.”
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