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The national costs management pilot being rolled out next month will put law firms in danger of huge losses, a leading expert has warned. Professor Dominic Regan said costs management will place much greater emphasis and scrutiny to produce detailed and accurate budgets.

The NHS Litigation Authority paid out £195m in costs to claimant clinical negligence lawyers over the past year, a rise of 61% on the previous 12 months, its annual report has revealed. Defendant lawyers also saw their costs shoot up 47% to £62m.

It is not champertous for a solicitor to indemnify his client against paying the other side’s costs in the event of not finding insurance, the Court of Appeal ruled yesterday. It is thought that law firms may find themselves offering such arrangements more frequently in a post-Jackson/legal aid reform world so as to secure work.