Lawyers warned to budget carefully after costs ruling

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Jul 06, 2017
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Solicitors will have to keep a close eye on how their costs stack up, as judges should only depart from an approved or agreed budget if there is “good reason” to do so

Nigel Cairns/News Group Newspapers

Lawyers risk “significant financial losses” if they do not adhere to pre-agreed costs budgets, experts predicted in the wake of a Court of Appeal ruling.

In the case of Harrison v Coventry, the court said that a costs judge on detailed assessment should only depart from an approved or agreed budget if there is “good reason” to do so.

“This puts pressure on solicitors to get their budgets right,” a statement from the Association of Costs lawyers said. The group’s chairman, Iain Stark, said that solicitors needed “to sit up and take notice of the Harrison ruling, as too many are not approaching costs budgeting seriously enough”.

Stark predicted: “There are likely to be a few painful experiences before the message really gets home that if you want to get paid for the work you do, you need to plan and budget it properly.”

The association pointed out that its own recent survey revealed that just 5 per cent of costs lawyers worked with solicitors “who always stuck to their budgets”. That was a slight improvement on last year’s survey result, when the figure was just 2 per cent.

Stark warned that “while a lot of lawyers may be happy to continue in the same way they have done for many years, introducing what is essentially a spreadsheet should help both the parties and the judge, making the process fairer as well as cheaper”.

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