Solicitor’s and Legal Costs
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Solicitor’s charges are known as their ‘costs’. Although solicitors are under a professional duty to keep their clients fully informed on the costs which are being incurred, much confusion can occur. Understanding the costs you will be asked to pay if you instruct a solicitor is essential, and this law guide attempts to dispel much of the mystique which attaches to solicitor’s charges and legal fees.
Lawyers have different ways of charging, and the various methods, from hourly charges to fixed fees, are explained with advice as to which may be more suitable for a particular case. The advantages and pitfalls of no win/no fee are discussed. The procedure to query a bill is explained.
The guide also explains court costs and how costs between parties in litigation are decided, and the orders available to the courts.
You employ solicitors to advise you. The one thing they will probably never advise you on is how their costs will be dealt with. Your lawyer is supposed to provide clear guidance on the funding options and how your legal charges will be calculated before you enter into an agreement with them. However the explanation given may well be tainted by their anxiety to obtain your instructions and a reluctance to fully disclose how the bill will be calculated. Once you have entered into an agreement then even if you ask them they have a potential conflict of interest.
There are 2 different types of solicitor’s costs which can be at different rates. If you win your case the other side may well be ordered to pay what are known as interparty or “between the parties” costs. These will be the costs which the court considers reasonably incurred in the matter. They may not be the same as “solicitor/own client” costs which are what you have to pay your own solicitor. These costs are governed by contract law and the contract you have with your solicitor. They are payable unless “unreasonably incurred”. . As the solicitor is in a position of power over his client these costs are regulated both by the courts and by the Solicitors Regulation Authority in their code of conduct
Solicitor and own client costs.
Solicitors refer to what they charge their client as their profit costs for obvious reasons. They will be the amount you are charged for the legal services provided and include fees, disbursements, expenses, and any other monies due under a funding arrangement.
Profit costs are usually based on the time spent by the solicitor and any other fee earner on your matter. This is the preferred method much beloved by the profession.
You can however also be charged a fixed rate for the work to be carried out or in certain matters on a contingency or no win no fee basis. Whatever basis is chosen (or negotiated) it will be the basis of the contract entered into which is known as the retainer. This contract between the solicitor and his client will be governed by contract law just as any other contract for services. There is no fundamental difference between this contract or one for a painter and decorator. If a solicitor is instructed under a fixed fee agreement the amount agreed cannot be exceeded unless there is a clause in the agreement to this effect and setting out what could amount to an extra charge.
Most agreements will allow for interest to be charged on unpaid bills. Unless a rate is specified this will be taken as 8% being in the current rate for unsatisfied court judgements.
Solicitor and own client costs. 1
Profit Costs. 1
Conditional fee agreements 3
The solicitors’retainer. 4
Payment on account. 5
Costs updates and estimates. 6
At the end of instructions. 7
Costs between the parties. 7
Interim Costs Orders. 8
Final Costs Orders. 9
Conduct of the parties. 10
Assessment of costs. 10
Standard and indemnity costs. 11
Costs in particular cases. 13
Small claim costs. 13
Mortgage repossession costs. 14
Challenging your solicitor’s bill of costs. 14
Tricks of the trade. 15
Some rules to follow to keep legal costs down: 16
Solicitors Regulation Authority instruction on cost information. 17