In the second instalment of my #askacostslawyer series of articles, I’m going to answer a question that is near the top of any Solicitor's list.
As a solicitor, it stands to reason that it will save my firm money if I do the costs on a matter myself, rather than giving the work to a costs lawyer, right?
In principle, you might think that handling the costs of a case yourself as a solicitor would save your firm money, since you wouldn't need to pay a costs lawyer for their services. However, the reality is often more complex and multi-faceted.
One key factor to consider is the specialised nature of costs law. It is a complex field, with numerous intricate rules and guidelines which, as a result of case law, are changing with alarming speed. A costs lawyer, who specialises in this area, might navigate these complexities more effectively, potentially resulting in a more favourable outcome. They are, after all, experts in their field.
Moreover, you have to consider your time. Costs work is incredibly detailed and can be time-consuming. As a solicitor, your time may well be better spent on the substantive legal work that you were trained to do. Because the hourly rate you charge your clients is likely to be higher than the rate your costs lawyer will charge you, this means that dedicating your fee earning time to costs work could, in fact, outweigh the cost of hiring a specialist costs lawyer,
You should also take into account the efficiency with which a costs lawyer can complete their work. They do this day in, day out. They know the short-cuts, they have systems in place, they are specialists. They might complete the work more quickly than you could, again making their services potentially more cost-effective.
There is also the potential financial gain to consider. A costs lawyer, with their expertise and experience, might be able to secure a higher recovery of costs than you could achieve yourself. This potential increase in recovered costs could more than offset the cost of their fees.
Generally speaking, the costs incurred by a costs lawyer are recoverable from the paying party in the litigation. That effectively means that, in most situations, you pay nothing to your costs lawyer because their fees are included in any Bill of Costs served on the paying party and are recovered as part of a global settlement.
Another important consideration is the risk of errors. If you are not well-versed in costs law, there is a chance that you might make mistakes in the costs process. Such errors could result in a lower recovery of costs, an adverse costs order, or even claims of professional negligence in some cases. This risk will be significantly lower with a costs lawyer involved.
Finally, costs lawyers ensure compliance with all costs rules and regulations, reducing the risk of non-compliance and potential penalties.
So, while on the surface it might seem more economical for a solicitor to be tempted to handle costs themselves, the real picture is much more nuanced. Hiring a costs lawyer could actually be a wise investment, depending on the complexity of the case, the amount of costs at stake, and your own level of expertise and availability. As with all professional decisions, it is about weighing the potential benefits against the costs (no pun intended!).
As ever, if you have any questions that you would like answered in this series, or just want a chat about costs, just drop me a line.