Paramount Legal Costs Ltd Newsletter Issue 4

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PARAMOUNT LEGAL COSTS

WELCOME TO ISSUE FOUR OF OUR QUARTERLY E-NEWSLETTER Welcome to the 4th edition of our e-newsletter!

In this edition Robin Dunne from Clerksroom has written an article giving advice on securing payments on account of your costs following successful litigation – something that is essential to all of us following the Jackson reforms.

Claire, our Head of Care & Family has written a piece highlighting the new standards for expert witnesses as implemented through Practice Direction 25B. Also in this edition Rosy from Armstrong Watson has written about law firms making strategic reviews. Look at your business as it stands now, what went well and what needs improving. The article also discusses the need for firms to be flexible and ready to adapt.

This year we have decided to have a break from our traditional quiz and have done something a little bit different. Christine, Martin & myself certainly enjoyed working with Louise from Pink Tulip on this……we hope you like our new game this year and enjoy taking part for a chance to win some luxury handmade chocolates from Saunders.

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We would like to say a huge thank you to you all for reading the newsletters over the last year. It seems that the change we made to the newsletter has been really well received as each quarter it is read by more and more of you. We would also like to thank all the contributors we’ve had this year too: Robin Dunne from Clerksroom, Andy Poole, Mark Baines, Steven Holmes and Rosy Ware all from Armstrong Watson.

Finally we wish you all a Happy Christmas and a prosperous New Year.

CONTENTS Page 2 Obtaining Money On Account Of Costs.

by Robin Dunne Page 3 Case Law

by Claire Robson New Standards For Expert Witnesses

by Claire Robson Page 4 How Law Firms Use External Strategic Reviews To Improve Their Business

by Rosy Ware Page 5 Spot The Difference

Paramount Legal Costs Ltd | December 2014

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OBTAINING MONEY ON ACCOUNT OF COSTS

BY ROBIN DUNNE Cash flow has always been important for solicitors, yet following the Jackson

payment can be made at the same time as the order is filed at court for sealing.

reforms and the squeeze on legal costs, it has become all the more essential.

One of the simplest ways for firms to ensure that they are put in funds is to obtain payments on account of their costs following successful litigation. This article explains how to go about securing those funds.

Two Separate Regimes The first point to note is that there are two separate mechanisms by which a payment on account of costs can be made. It is important to use the correct one at the appropriate time.

It is not fatal to delay (within reason) and make the application a short time after the claim settles. There are circumstances where the court makes an order automatically (for example, a deemed order under r. 36.10) and the parties have no interaction with the judge at the point of settlement. In these situations, a prompt application should be made (once an attempt has been made to agree a reasonable payment on account by consent.)

If not made to the trial judge the application should be made to the allocated Master in the High Court or a District Judge in the

The first is to be found under r.44.2(8) – which applies before a request for a detailed assessment has been made. The second is the power under r.47.16 of the court to issue an interim costs certificate. This may only be done after a detailed assessment has been requested.

County Court. There is some doubt as to whether the SCCO have the power to make an order under this rule and parties finding themselves within the SCCO should request an assessment and seek an interim costs certificate as an alternative.

Payment on Account- r. 44.2(8)

What is a reasonable sum?

The rules relating to payments on account of costs changed on 1/4/13. They now read: “Where the court orders a party to pay costs subject to a detailed assessment, it will order that party to pay a reasonable sum on account of costs, unless there is good reason not to do so.”

Thus, there is now a presumption that a reasonable payment on account will be ordered unless the paying party can show that there is a good reason not to do so. The burden is therefore on the paying party to show such good reasons.

There has been some debate as to whether the rule envisages such an order being made only at the same time as the order for costs is made. No issues arise where the order for costs is made at the end of a multi track trial for example. In that example the receiving party should make the application before the trial judge.

Where a matter settles without a trial (for example, by consent) it is advisable for receiving parties to include a payment on account term within the consent order. If that cannot be agreed then any application for a

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The amount payable is within the discretion of the judge. Courts will usually follow the guidance in Mars UK Ltd v Teknowldge Ltd which allowed a sum equivalent to 66% of the likely amount payable on assessment.

If a costs budget has been approved by the court this will assist the judge in considering the appropriate sum to order. In the absence of a costs budget a breakdown of costs can be provided (but parties should ensure that it is consistent with any estimate filed at the allocation or listing stage.) There is no requirement to have served a full bill of costs when making the application.

Interim Costs Certificate Once assessment proceedings have been commenced and a request for assessment made, the receiving party may make an application for an interim costs certificate per r.47.16.

Robin Dunne is a barrister at Clerksroom specialising in costs and litigation funding, personal injury and enforcement.

If you have any questions about this article please contact Robin at: Tel: 0845 083 3000 Email: dunne@clerksroom.com Visit the website

The amount payable is again discretionary but it is worth noting that the burden upon the paying party to show why a reasonable sum shouldn’t be ordered is not present within these rules. The judge will therefore make such an order as he or she considers reasonable. The Mars UK calculation will likely be informative as to the sort of figure that should be allowed.

Conclusion Receiving parties have the tools to ensure that they are placed in funds as soon as a claim settles. If the paying party does not offer a reasonable sum on account then an application should be made in each case.

The judge (who will be a District Judge or Costs Judge) will likely have a much greater understanding of the issues as to costs that separate the parties as they will be in possession of the bill, points and replies.

Paramount Legal Costs Ltd | December 2014

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FAMILY CASE LAW H, Re [2014] EWFC B127 (14 August 2014) This was a Judgment given by Her Honour Judge Hallam on 14/08/14 due to her

hearing to allow a further application to be made to the legal aid authorities.

concern about the legal aid position in the case. Her Honour Judge Hallam also directed that a transcript of her Judgement be sent to Mr David Keegan and the President of the Family Division.

This case related to Private Law proceedings issued by the father for a Child Arrangement Order in respect of his 4 children regarding where the children would reside. The mother opposed the Application. During the course of the proceedings the Local Authority was made a party to the proceeding as they had provided a number of reports in the matter and also supported the father’s Application.

The mother in the proceedings was selfrepresenting as she had been refused legal aid.

During the hearing on 19/05/14 District Judge Reed raised concerns that the mother’s Article 6 and Article 8 ECHR rights were at risk of being violated given her speech, hearing and learning difficulties if the case proceeded without further representation. District Judge Reed therefore adjourned what would have been the final

The matter had then come before Her Honour Judge Hallam for a final hearing where once again the mother had been refused legal aid, with the father and the Local Authority both being legally represented, the father through the assistance of legal aid. Her Honour Judge Hallam questioned the decision to refuse the mother legal aid stating that had it not been for a local firm of Solicitors agreeing to represent the mother on a pro bono basis, then the Court would have been placed in an impossible situation. Her Honour Judge Hallam stated that denying the mother legal aid prevented her from having full access to the Court and that the mother’s Article 6 and 8 rights had been breached. The Judgment concluded that this was a case where the mother should have had legal aid and should have been represented, and that if legal aid was being refused to people such as the mother in this case, then injustices would occur.

The full judgment can be read here

Claire is the Head of our Care & Family department she is also an affiliate of Resolution.

If you have any questions about this article please contact Claire at: Tel: 01228 815396 Email:

claire.robson@paramountlegalcosts. co.uk

NEW STANDARDS FOR EXPERT WITNESSES The Legal Aid Agency has introduced new standards for experts

accept instruction, and give an estimate of the number of hours the report is likely to take. This will assist the legal representative to apply expeditiously to the Legal Aid Agency if prior authority is to be sought in a publicly funded case.

used in family law proceedings involving children.

These standards were introduced for experts instructed from 01/10/14, irrespective of the date legal funding was granted. These changes were implemented through Practice Direction 25B. The LAA will therefore need confirmation that these practice directions have been complied with in Care/Family cases, with changes being made to their paper forms to allow providers to confirm that an expert meets these standards.

These new standards include requirements that: •

•

•

The expert is up-to-date with Continuing Professional Development appropriate to their discipline and expertise, and is in continued engagement with accepted supervisory mechanisms relevant to their practice.

The expert has undertaken appropriate training, updating or quality assurance activity – including actively seeking feedback from cases in which they have provided evidence- relevant to the role of expert in the family courts in England and Wales within the last year.

The expert should state their hourly rate in advance of agreeing to

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A full list of the new requirements can be found here Expert Rates Just as a reminder, the standard rates experts can claim in Public and Private Law matters funded under legal aid are still based on the date the case started. Solicitors need to be aware of the dates when reductions to experts’ rates occurred and these are: • • •

Matters started between 03/10/11 and 31/03/13 Matters started between 01/04/13 and 01/12/13 Matters started on or after 02/12/13.

These rates, and also details on what can be classed as exceptional circumstances in relation to rates allowable, can be seen here:

Paramount Legal Costs Ltd | December 2014

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HOW LAW FIRMS USE EXTERNAL STRATEGIC REVIEWS TO IMPROVE THEIR BUSINESS

BY ROSY WARE There is no doubt that the legal sector has recently undergone a period of extensive change and reform. The effects of those reforms are only just beginning to be seen now, and where some firms have prospered, others have not, particularly those with exposure to legal aid and personal injury work.

It has become increasingly difficult to maintain profitability and generate cashflow, even for those firms which are prospering. Management must understand the drivers of profitability, and the key tools to unlock cash.

A strategic review is a key first step to understanding your business as it stands now. It highlights what is working well, and key areas for improvement.

A business which does not have the flexibility to change and adapt to current market conditions is unlikely to succeed.

More and more law firms are beginning to undertake strategic reviews in some form in order to unlock cashflow and to develop their business for the long term future.

A strategic review examines all areas of the law firm including: • Systems • Current lock-up process • Current WIP and debtor balances • Targets and KPIs • Success rates • Efficiency, recovery and utilisation rates • Income and profitability

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A review assesses the current procedures and what is happening in practice (often two different things), and then makes detailed suggestions, department by department, on specific improvements that need to be made.

Realistic and measurable targets and KPIs are suggested that if met will have a direct correlation to the cashflow and profitability of the firm.

Communication throughout a review is vital to ensure that staff feel valued and involved. The process requires their honesty and input. It is their day to day activities and decisions which can have a direct financial impact on the firm. Without their understanding and involvement, many of the recommendations will not succeed, and suggested targets will not be met.

Speaking in general terms, it’s a process which sounds very simple in practice, but all too often, every day business life gets in the way of conducting a process such as this internally.

Even the most successful of law firms benefit from a strategic review of some description. The markets in which firms operate are fluid and changing and there is always room for improvement and to learn and develop new ideas and processes.

Rosy is a Legal Sector Manager at Armstrong Watson and is responsible for law firm clients predominantly in the North-West from offices in Carlisle, Penrith, Kendal and West Cumbria.

Those clients range in size from small practices to large multi-partner firms.

Rosy has been with Armstrong Watson since 2012 and during that period has had managerial responsibility for the preparation of financial statements, corporate and personal tax returns and SRA accounts rules reports.

Rosy has also undertaken a number of specialist projects for legal sector clients including law firm valuations, strategic and lock-up reviews, succession planning and managing a number of incorporation processes.

If you have any questions about this article contact Rosy at: Tel: 01228 690200 Email: rosy.ware@armstrongwatson.co.uk Visit the website

Paramount Legal Costs Ltd | December 2014

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CHRISTMAS SPOT THE DIFFERENCE We have made many changes in 2014 and so this year we thought we’d also have a break from our traditional Christmas quiz and do something a little different.

We thought we’d do a spot the difference. Christine, Martin & I wanted to show our Christmas spirit this year and decided that we would be involved too; we hope you enjoy the change as much as we did creating the pictures.

There are 10 differences and the first ten people to email me with the correct differences by Thursday 11 December, will receive a box of luxury locally handmade chocolates from Saunders.

To email me with your differences please click here.

Once again have a happy Christmas and a prosperous New Year, from all of us at Paramount Legal Costs.

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Paramount Legal Costs Ltd | December 2014