Legal Costs, funding options and recoverability
LEGAL COSTS, FUNDING OPTIONS AND RECOVERABILITY
There is a significant divergence happening at the moment[1]. Lawyers’ hourly rates are increasing but in the world of litigation the courts are limiting the costs a successful litigant can claim from his opponent. In the past the shortfall between the costs that a successful litigant had to pay his lawyers and the costs he could claim from his opponent might typically have been 25%. It’s now likely to be 50% or more. This makes choosing the right lawyers and planning the management of a claim or defence at the outset even more important. The consequences of paying scant regard to these matters could be disastrous in the end in terms of net recovery.
The well-informed client is unlikely to be content with an open-ended hourly rate fee arrangement and in any event solicitors are under a duty to advise their clients, or prospective clients, about alternative funding options. As part of this discussion solicitors should always carry out a costs-benefit analysis.
In order to meet a changing market and attitudes to legal costs we offer a variety of fee arrangements. We have experienced a strong demand for preliminary advice on the merits of an issue, claim, or defence, and in most cases we can advise for a fixed fee. Inevitably it is more difficult to advise a client on that basis if he or she requires representation but we are prepared to do this on the basis of an agreed scope of work. Another common fee arrangement is discounted hourly rates which may be combined with a cap and/or a success fee. These arrangements can assist a client’s cash flow but the disadvantage is that any success fee could not be claimed against an unsuccessful opponent – it would have to be funded by the client (often out of damages).
Costs, funding options, and recoverability may not be the most important issues to have in mind when selecting solicitors but a good understanding by your solicitor of these issues is a sure sign of an able and experienced litigator.
See also:-
[1] April 2016