It is remarkable when I look back over my working life to see how much progress has been made in the Costs Profession. When I first started in 1986 almost every piece of work I completed was funded by Legal Aid. Bills of costs and Claim Forms were prepared. All papers were returned to our clients, and that was that!
Today, a Costs Lawyer is regarded as an expert. Whilst bill preparation is still a major part of our lives it is much more about the skill and expertise that we can bring to all of the other areas where the word ‘costs’ lives.
We are now involved in Budgeting and Costs Management and from my side of things it is vital that litigators respect the need to keep control of the cost of running a case (whether large or small).
There is still a habit of expressing relief when a budget has been approved by the Court at a CCMC. The budget can be safely ‘put in a drawer’ and the case progresses. Costs Management does not enter into the mix.
The case is won for the client and everyone is very happy. A bill of costs is needed and that is where things can start to unravel.
Whilst the bill is being prepared it is noted that the case took a number of unusual turns and a number of the phases in the budget have been exceeded. The chances of persuading the court that these costs should be awarded are slim as the court will ask what was done at the time the fee earner became aware of the changes in the case. The simple answer is “nothing was done” as the case had not been Costs Managed. All of the work outside of the budget will be written off. That also gives rise to an awkward conversation with the client who will no doubt be less than pleased.
Depending on how far the case deviated from the budget will determine the level of pain experienced. Any amount written off will have an impact on profitability though.
This is the easiest way to show the impact of poor file management and not keeping on track with costs. However, it does not matter if this is in relation to a multi-track case subject to Budgeting and Costs Management as it is something that affects all matters – fixed costs, solicitor/client, DBA as examples.
Every time a client comes to a solicitor there is a need to provide the client with an estimate of the likely costs that will be incurred. The estimate is, of course, not set in stone as it is not always possible to provide an estimate for the whole case at the outset.
What is important is that any estimate provided is monitored and revisions made when necessary. A failure to do this will inevitably end up with an awkward conversation with the client and probable write offs.
Engaging with Costs experts is the best way to ensure that the costs of cases are being managed properly, time is being recorded for all work that is done and any changes to estimates or budgets are looked at and actioned accordingly. It is about being Pro-active. A litigator has the skills to run the case and know when he/she needs to engage with experts. Keeping on track of costs is part of a Costs Lawyer’s expertise.
