The Need for Law Firms to Be Open and Transparent on Costs
Recent procedural changes requiring solicitors to submit detailed costs budgets for court approval at the first case management hearing could encourage more commercial disputes in the West Midlands to be settled at an early stage, according to law firm Shakespeares.
With effect from the start of this month, with some limited exceptions, all disputes issued with a value of over PS25,000 will be subject to a compulsory costs budgeting regime. Solicitors will have to submit a detailed costs budget outlining their fees for approval by the court at the first case management hearing.
Any fees considered to be excessive or disproportionate will not be approved and will generally not be recoverable from the other party.
According to litigation lawyers at Shakespeares, this change in procedure will bring benefits for all businesses involved in commercial disputes.
Mark Beesley, litigation partner at Shakespeares' Birmingham office, said: "This change is helping to underline the need for law firms to be more open and transparent about legal costs and this will benefit commercial clients and consumers alike.
"Businesses escalating a dispute by initiating court proceedings will benefit from greater certainty about the costs that will be incurred, should they win or lose. For those considering whether to defend a claim, the fact that they will be able to see the costs involved, on both sides, as well as the value of the damages being sought, will help them to decide how best to respond.
"The costs to be incurred and the risk of an adverse costs order where unsuccessful are powerful factors in any decision to settle, rather than fight. …