Coulson: Solicitors want to have their cake and eat it
Costs disputes worth more than £100,000 should be subject to compulsory adjudication, the judge who leads on costs issues in the Court of Appeal has said.
Sir Peter Coulson also said solicitors want to “have their cake and eat it” by being able to provide clients with interim bills but restrict their ability to challenge them.
Interviewed by Legal Futures editor Neil Rose at an ‘In Conversation’ event organised by the Association of Costs Lawyers, Lord Justice Coulson was asked if he thought costs disputes were particularly well suited to alternative dispute resolution (ADR).
He replied: “I do and I consider this an obvious solution where the costs are more than £100,000. I think you should have compulsory adjudication, with decisions temporarily binding. The money has to be paid before either party can challenge it.
“It’s worked brilliantly for construction disputes. There are major similarities with costs disputes. Construction will never go back to a non-compulsory adjudication position. When I hang up my wig and I’m an arbitrator or an adjudicator, I’d be very happy to do costs adjudications.”
He explained that the problem with some other forms of ADR was that a party could derail it if they did not want to be there. “Whereas you get very little of that in adjudication – you get disputes on enforcement, but that’s different.”
Sir Peter said frequent rulings over what constituted a bill – with statute bills, interim statute bills, Chamberlain bills and the like – came back to the “mess” that was section 70 of the Solicitors Act 1974.
“In the old days, solicitors tended to put in a bill at the end of the case and, because the case might’ve lasted nine months, the solicitor, it was felt, was entitled to a certain amount of protection that meant there was only a limited period in which the client could quibble about it. Hence having statute bills.
“Then it became apparent in bigger cases that solicitors needed the right to claim interim payments. And who could argue with that? But there’s a tension now between interim payments and statute bills because solicitors, with respect, want to have their cake and eat it.
“They want to have interim payments, but they want the protection that they can’t be argued about later. And that is difficult.”
The Act needed reform, with proper consumer protection in place, and this was a matter for the Law Commission, he said.
“A solicitor ought to be entitled to interim payments, but there ought to be a system whereby protection does not kick in automatically. I compare it with construction, where the contractor is entitled to interim payments, but if he’s overpaid it can be clawed back next time or at the end.”
Coulson LJ also agreed that unregulated costs professionals should not be allowed to appear in court – Costs Lawyers are one of the eight regulated legal professions and have rights of audience.
He said: “I have always been surprised that, given the enthusiasm people have for regulation generally, and for the legal profession in particular, there isn’t a regulated system. But it is a matter for regulation, rather than the courts.”
The event was held at the offices of London law firm Bolt Burdon Kemp.
Meanwhile, David Bailey-Vella is to become the new chair of the Association of Costs Lawyers on 1 April, in succession to Jack Ridgway.
He has been in costs for approaching 12 years and has worked in costs firms, solicitors’ firms and in-house – a spell as national legal costs manager at housing charity Shelter.
Mr Bailey-Vella said: “I take over an association in rude health. Jack Ridgway has done a superb job in modernising the ACL, reversing a declining membership and ensuring that Costs Lawyers have a prominent voice when it comes to the many debates about costs.
“The role of a Costs Lawyer and our value to the legal profession has changed a lot since the ACL opened its doors in 1977. The legal landscape has changed significantly since, but we have always managed to adapt and learn on the job.
“The future will bring different challenges, but we will approach these with the same motivation and willingness to grow and develop as our predecessors. In two years, we will celebrate 50 years of our association, and there is still a lot to achieve in this time.”
He said his priority as chair was to grow the profession through promoting the necessity of regulated and qualified costs professions in the legal industry, and continue his focus on social mobility.
Does Sir Peter Coulson say that between-the-parties “costs disputes worth more than £100,000 should be subject to compulsory adjudication” – or is he referring only to solicitor-and-own-client costs disputes?