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SUBMISSIONS
TO THE
IMPLEMENTATION ADVISORY GROUP
on the “Report of the Legal Costs Working Group”
THE BAR COUNCIL
10th May, 2006
1
CHAPTER ONE INTRODUCTION ..................................................................... 4
CHAPTER TWO GUIDELINES ............................................................................ 6
A. Proposed “guidelines” .................................................................................... 6
(i) Scope of recommendation.......................................................................... 6
(ii) Effect of proposed guidelines ................................................................ 8
(iii) Formulation of proposed “guidelines” ................................................. 22
(iv) Implementation of proposed “guidelines” ........................................... 27
B Submissions on proposed “guidelines” ........................................................ 27
(i) Assessment of work done ........................................................................ 27
(ii) Criterion of time spent ......................................................................... 30
(iii) Value of claim ...................................................................................... 39
(iv) Other factors......................................................................................... 40
(v) Updating guidelines ............................................................................. 48
CHAPTER THREE LITIGATION REFORM................................................... 50
A. Delay ............................................................................................................ 50
B. Pre-trial costs ............................................................................................... 52
C. Estimates of costs ......................................................................................... 52
D. Jurisdictional limits ...................................................................................... 53
E. Mediation ..................................................................................................... 53
F. Civil legal aid ............................................................................................... 53
G. Court fees ..................................................................................................... 55
H. Court reform................................................................................................ 55
CHAPTER FOUR INFORMATION .................................................................... 57
CHAPTER FIVE COUNSEL FEES .................................................................... 60
A. Proportion of costs between junior and senior counsel ............................... 60
B. Number of counsel ....................................................................................... 62
C. Brief fees ...................................................................................................... 63
D. Work actually done ...................................................................................... 65
CHAPTER SIX ASSESSMENT OF COSTS .................................................. 67
CHAPTER SEVEN LEGAL COSTS REGULATORY BODY ......................... 70
CHAPTER EIGHT PROPOSALS FOR REFORM ........................................... 73
A. Disclosure of information on costs .............................................................. 74
(a) Disclosure to solicitor .......................................................................... 81
(b) Content of letter of disclosure .............................................................. 81
(c) Timing of letter of disclosure ............................................................... 82
2
(d) Updates ................................................................................................ 83
(e) Exceptions ............................................................................................ 83
(f) Effect of letter of disclosure ................................................................. 83
(g) Professional Practices Committee........................................................ 84
B. Costs Agreements ........................................................................................ 85
C. “Brief fee” ................................................................................................ 86
D. Fee notes ...................................................................................................... 87
E. Guidelines .................................................................................................... 88
CHAPTER NINE SUMMARY OF SUBMISSIONS ........................................... 92
APPENDIX A ....................................................................................................... 100
DISCLOSURE OF LEGAL COSTS AND COSTS AGREEMENT ........................ 100
BETWEEN A BARRISTER AND A SOLICITOR ................................................. 100
3
CHAPTER ONE INTRODUCTION
1.01 The Bar Council makes these Submissions to the Implementation Advisory
Group to present its views on the Report of the Legal Costs Working Group.
These Submissions also illustrate certain recommendations of the Legal Costs
Working Group (“the Working Group”) in respect of which the Bar Council
considers clarification or additional information to be necessary before such
views can be expressed.
1.02 These Submissions are divided into nine chapters, which address the
recommendations contained in the Working Group’s Report under various
headings. The second chapter analyses the recommendation for the
introduction of guidelines to govern recoverable costs. The third chapter deals
with litigation reform and considers some of the proposals in the Working
Group’s Report for rendering the court system more expeditious, and other
related recommendations. The fourth chapter concerns the provision of
information regarding legal costs and analyses the potential role of a barrister
in that context. The fifth chapter addresses specifically the issue of counsel
costs, including such matters as brief fees. Chapters six and seven concern the
recommendations for the establishment of a Legal Costs Assessment Office
and a Legal Costs Regulatory Body, respectively. Chapter eight sets out the
Bar Council’s suggestions for means of reforming the rules and procedures
governing legal costs. Finally, Chapter Nine sets out the submissions which
have been made in the course of the preceding eight chapters.
1.03 In each of these chapters, the Bar Council focuses upon those
recommendations in relation to which it has a particular interest or insight.
However, these Submissions also address any recommendations with which
the Bar Council considers it may be of assistance. However, these
Submissions do not purport to address every recommendation of the Working
4
Group. In the event that more detailed information becomes available
regarding the recommendations contained in the Working Group’s Report, the
Bar Council would welcome the opportunity to provide further submissions.
1.04 In making the Submissions set out in the ensuing eight chapters, the Bar
Council is highly conscious of the fact that the implementation of any system
for the formulation, implementation and assessment of rules governing legal
costs will necessitate very considerable changes to the system which is
presently in place. The inadequacies of the litigation regime in Ireland,
inadequacies highlighted to some extent by the Working Group in Chapter
Eight of its Report, need first to be addressed. Addressing these inadequacies
and establishing the system which must, it is submitted, be in place before the
introduction of the changes proposed by the Working Group, will require the
deployment of considerable resources. These resources will be needed to
establish the entities, rules and employ and train the requisite staff and
personnel to ensure that there is a body of qualified persons to ensure the
accurate designation and implementation of any changes to the rules
governing legal costs. In other jurisdictions, as addressed in Chapters Two
and Eight of these Submissions, the introduction of rules governing legal
costs, particularly those which involved any attempt to fix the levels of costs,
have been preceded and accompanied by wide ranging structural reform of the
legal systems in question. For this reason, as well as other reasons elaborated
upon elsewhere in these Submissions, the Bar Council submits that it is not
feasible and would not be workable to attempt to implement far-reaching
reform of the law and rules governing legal costs in Ireland unless and until
such reforms have taken place.
5
CHAPTER TWO GUIDELINES
2.01 The Working Group has recommended the establishment of a Legal Costs
Regulatory Group (“the proposed Regulatory Group”). Among the
responsibilities of this Group will be the setting of “guidelines” for the amount
of recoverable costs. The Bar Council has a number of submissions to make
regarding the content and effect of any such guidelines. However, there are
certain preliminary points that need to be raised.
A. Proposed “guidelines”
(i) Scope of recommendation
2.02 The Working Group’s recommendations in relation to guidelines for legal
costs refer to “recoverable costs”.1 This term, as it is used in the context of
legal costs, is typically taken to refer to the costs, which the successful party to
litigation may recover from the losing party. These costs are also referred to as
“party and party costs”.2 The Bar Council makes these Submissions to the
Implementation Advisory Group on the assumption that the Working Group’s
recommendations in relation to the formulation of guidelines are confined to
such costs as are recoverable between the parties to litigation.3 This
interpretation is supported by the statement of paragraph 7.16 of the Report
that, “The regulatory body could, if it was considered appropriate, also
regulate costs in relation to noncontentious business.”4
1
See Report of the Legal Costs Working Group (November 2005) at Chapter Five.
2
See Report of the Legal Costs Working Group (November 2005) at para 3.4.
3
This interpretation is supported by references to “recoverable costs” in the context of payment of
costs by the losing party to the winning party in litigation, throughout the Report of the Legal Costs
Working Group. See for example, paras 5.9, 5.10, 5.11, 5.17.
4
See Report of the Legal Costs Working Group (November 2005) at para 7.16.
6
2.03 The effect of this interpretation of the Working Group’s Report is that the
recommended “guidelines” are directed neither at solicitor and client costs, as
defined in paragraph 3.4 of the Report, nor costs incurred in relation to non-
contentious business. The Bar Council’s understanding of the Working
Group’s recommendations is therefore that, insofar as such work is concerned,
the “guidelines” will not apply.5
2.04 The fact that the proposed “guidelines” will restrict the costs that are
“recoverable” between parties to civil proceedings, has the effect that the
successful party to proceedings may be left with outstanding liability for legal
costs incurred in the course of the proceedings. This risk is particularly real if
the guidelines governing the level of “recoverable” costs are fixed objectively
and do not allow account to be taken of all of the factors which are relevant to
the level of costs incurred in a particular case.
2.05 This could have the consequence that a person who has fully vindicated his
position in civil proceedings, and incurred reasonable costs in that regard,
would nonetheless face a bill for legal costs. This bill would not necessarily
be confined to such costs as solicitor and client costs that are typically beyond
the scope of recoverable costs.
2.06 The Bar Council has welcomed the Working Group’s support for the
indemnity principle and the rule that “costs follow the event”.6 However, the
Bar Council is concerned that guidelines which govern “recoverable costs”
restrictively, will have the effect of abrogating the principle of indemnity. The
Bar Council submits that this would be to the detriment of litigants and the
Irish legal system and would be in conflict with the Working Group’s own
support for the principle of “costs following the event” and the principle that
5
This is subject to the caveat that the Report does provide that, “The regulatory body could, if it was
considered appropriate, also regulate costs in relation to noncontentious business” (para 7.16). Such
regulation, if adopted, could impact on costs incurred in the discharge of a barrister’s work in non-
contentious matters.
6
See further Chapter One above.
7
“a person who wins an action should not suffer a financial penalty in
vindicating their rights.”7
2.07 A further consequence of the fact that the guidelines address only “recoverable
costs” is that parties may not be in an equal position in litigation. If the costs
which a litigant can recover in the event of a successful outcome are limited
excessively and on the basis of objective criteria, and he lacks the means to
bear legal costs in excess of this level, he may be at a disadvantage as
compared to a more well resourced opponent, who is willing to incur legal
costs beyond those set by guidelines.
Submission 1
2.08 The Bar Council submits that the Implementation Advisory Group should be
vigilant to ensure the principle that “costs follow the event”, the importance
of which is recognised by the Working Group, is not undermined by
excessively restrictive guidelines. The Bar Council also submits that the
principle of equality of arms should be carefully guarded and protected in the
formulation and implementation of the proposed guidelines.
(ii) Effect of proposed guidelines
2.09 The effect of the guidelines for recoverable legal costs as proposed by the
Legal Costs Working Group, need to be considered carefully. The Working
Group “does not recommend the introduction of scales containing fixed costs
beyond which costs are not recoverable.”8 The Bar Council wholly welcomes
the recommendation that there should be no fixed scales of costs, a position
which is also favoured by the experience of other jurisdictions, as explored
below. In particular, the Bar Council welcomes the statement in the Working
Group’s Report that “a fixed scale may not comprehend the totality and
complexity of the range of legal proceedings that emerge” and the Working
7
Report of the Legal Costs Working Group at paras 5.15 and 5.17.
8
Group’s concern that “it might not be realistic to have a ‘one price fits all’
fee.”9
2.10 However, the Bar Council is concerned that certain descriptions of the effect
of the “guidelines” in the Working Group’s Report indicate that they may not
be entirely dissimilar in effect to fixed scales of costs. First, the Working
Group recommends that while “costs could be allowed in excess of those set
out by the costs body… the onus should be on a party seeking costs higher
than those prescribed to show why, in the particular circumstances of the case,
the higher amount claimed should be paid”10. This recommendation suggests
that the so-called “guidelines” are mandatory, and that there must be
justifications for any deviation from the “guidelines”. This is more akin to the
effect of fixed scales of costs, than that of “guidelines”, a fact that is
confirmed by the experience of other jurisdictions, as will be seen below.
2.11 Secondly, the Working Group describes the proposed guidelines as
“prescribed guidelines” and indicates that, “the guidelines would replace many
of the individual items currently prescribed in Appendix W”.11 Appendix W
does contain a scale of fixed costs. This was clear from an earlier stage of the
Report, in which the Working Group described Appendix W as follows: “the
fee prescribed in Appendix W may be a fixed amount, a scale or expressed as
being at the discretion of the Taxing Master”.12
2.12 Thirdly, the Working Group’s Report cites the system of costs’ recovery that
has been adopted in New Zealand as a model of “how a system of prescribed
guidelines might be framed”.13 However, the system of recovery of costs in
New Zealand purports to fix fee scales for recoverable costs and not just to
furnish guidelines for such costs. This is apparent from the Working Group’s
Report which states at paragraph 5.19, under the heading of “Fixed Fees” that,
“New Zealand has a sophisticated model to determine the scale fee applicable
8
Report of the Legal Costs Working Group (November 2005) at para 5.21.
9
Report of the Legal Costs Working Group (November 2005) at para 5.20.
10
Report of the Legal Costs Working Group (November 2005) at para 5.23.
11
Report of the Legal Costs Working Group (November 2005) at para 5.27.
12
Report of the Legal Costs Working Group (November 2005) at para 3.9.
13
Report of the Legal Costs Working Group (November 2005) at para 5.25.
9
to the various stages of a proceeding”. The fact that the Working Group cites
the model of New Zealand as a model for the proposed guidelines gives the
Bar Council further cause for concern as to the intended effect and true
character of the so-called “guidelines”.
2.13 The Bar Council accordingly wishes to express its concern that, while the
Working Group has decided against the introduction of fixed scales, for strong
and unassailable reasons, the effect of the guidelines may not be very different
in all but name. This concern is heightened by the fact that the experience of
Ireland, and other jurisdictions, has demonstrated that, unless the scope of
rules governing fixed scales is limited and contained, such rules suffer from
numerous shortcomings.
England
2.14 In England, the “Interim Report on Access to Justice” (June 1995) and the
“Final Report on Access to Justice” (July 1996) recommended the introduction
of fixed costs for “fast track” cases. This has only been done in limited
categories of cases, such as certain motor vehicle cases in which the claim is
worth less than £10,000. The Civil Procedure Rules do however fix the costs
for the trial of cases that are allocated to the “fast track”. These fixed costs do
not relate to, or affect, pre-trial costs.14 The costs are fixed as follows:15
For claims worth up to £3,000, the court can award fast track trial costs of £350;
For claims worth between £3,000 and £10,000, the court can award £500;
For claims worth more than £10,000, the court can award £750.
2.15 The court may apportion the costs awarded between the parties in accordance
with their respective success at trial. Where the claim is for money only, there
14
The rule which introduces this regime, Rule 46, applies to the costs of an advocate for preparing for
and appearing at the trial of a claim in the fast track but does not include disbursements or value added
tax. Rule 46.1(2).
15
Civil Procedure Rules, Rule 46.2(1).
10
are particular rules for quantifying the value of a claim for the purpose of
computing the fast track costs.16 Where the claim is for a remedy other than
the payment of money, the value of the claim is deemed to be between £3,000
and £10,000, unless the court orders otherwise.17 The court may generally not
award more or less than the fixed costs indicated above.18
2.16 The system of fixed costs is not without exceptions. For example, the court
has a discretion regarding the award of fast track costs based on the conduct of
the parties. In particular, the court can award less than the fast track costs
where the court believes that the party to whom the costs are to be awarded
has behaved unreasonably or improperly during the trial.19 Conversely, if the
court considers that that party who is liable to pay the fast track costs has
behaved improperly during the trial, the court can award additional amounts to
the other party as it considers appropriate.20 Moreover, the court can decide
not to award fast track costs.21
2.17 The Bar Council notes that, if fast track costs are awarded and the court
considers the attendance of a legal representative (typically a solicitor) to have
been necessary to assist the advocate (such as a barrister), the court can award
an additional £250 in respect of the attendance of that legal representative at
the trial.22
2.18 The Judicial Studies Board has examined the operation of these cost rules and
noted that,
16
Civil Procedure Rules, Rule 46.2(3) These rules are as follows: “(a) for the purpose of quantifying
fast track trial costs awarded to a claimant, the value of the claim is the total amount of the judgment
excluding – (i) Interest and costs; and (ii) any reduction made for contributory negligence. (b) for the
purpose of the quantifying fast track trial costs awarded to a defendant, the value of the claim is – (i)
the amount specified in the claim form (excluding interest and costs); (ii) if no amount is specified, the
maximum amount which the claimant reasonably expected to recover according to the statement of
value included in the claim form… ; or (iii) more than £10,000, if the claim form states that that
claimant cannot reasonably say how much he expects to recover.”
17
Civil Procedure Rules, Rule 46.2(4).
18
There are a number of exceptions contained in Rule 46.3, not all of which are addressed here.
19
Civil Procedure Rules, Rule 46.3(7).
20
Civil Procedure Rules, Rule 46.3(8).
21
Civil Procedure Rules, Rule 46.2(2).
22
Civil Procedure Rules, Rule 46.3(2).
11
“The amounts specified for fixed trial costs include the advocate’s preparation
for trial, getting to and from court, and conducting the trial, and are not capable
of being increased if the hearing goes beyond the first day. Nor can the fixed
trial costs be reduced if the hearing is brief. This remains the position even if the
start of a fast track trial is delayed because an emergency application had to be
dealt with, or the advocates in the trial requested and were granted time, in
either situation causing it to run over into a second day.”23
2.19 The Judicial Studies Board also noted, “You have no need to concern yourself
with ascertaining a brief fee, and indeed should not do so even if invited to
make enquiry. The amount being paid to the receiving party’s advocate is
irrelevant, the fixed trial costs prevailing.” This point was reiterated as
follows:
“Sometimes it may be disclosed at conclusion of a fast track trial that counsel
for the receiving party has appeared for a brief fee of less than the fixed trial
costs provided for by Rule 46.2(1), the paying party arguing that in the
circumstances the costs awarded should be limited to the amount on the brief.
You should reject any submission inviting you to proceed in this way. It is no
concern of the paying party or the court what the advocate is paid, the amount to
be allowed is the appropriate sum in the table of fixed trial costs.”24
2.20 With regard to the provision for additional payment for the attendance of a
legal representative to assist the advocate, the Judicial Studies Board made
the following observations:
“At first sight this provision appears straightforward. As a general rule fast track
trials will not require more than one legal representative to be in court, namely
the advocate. However, although the position should change quite soon, at
December 2000, if the advocate is attended by another person from the
instructing solicitors’ office, the court is bound to accept that the person was
‘necessary’. This is because the Law Society’s Rules of Conduct require
23
Judicial Studies Board, “ Civil Bench Book: Costs” at para 8.37.
24
Judicial Studies Board, “ Civil Bench Book: Costs” at para 8.38.
12
counsel be attended, and the Court of Appeal in Hughes v Kingston Upon Hull
City Council [1992] 2 All ER 49 held that the Rules of Conduct have statutory
effect. At the request of the Head of Civil Justice, the Law Society have
amended the Rule, but until it has been through a prolonged approval process
the revision cannot take effect. Upon implementation, the revised Rule will have
the following effect.
‘126. Attendance on counsel will normally be dispensed with in fast track and
small claims track civil cases except:
(a) where the case is more complex than a typical small claims or fast track
case;
(b) where the determination of costs at the conclusion of proceedings requires
the presence of the solicitor;
(c) where one of the parties in the case is a child;
(d) where the client is unable to understand the proceedings or give adequate
instructions to counsel because of inadequate knowledge of English, mental
illness or other mental or physical disability;
(e) where counsel is representing more than one party;
(f) where the client is likely to disrupt the proceedings if counsel were to appear
alone;
(g) where there are any issues likely to arise which question the client’s
character or the solicitor’s conduct of the case;
(h) where there is any other exceptional circumstance which makes it desirable
that counsel be attended.’”
2.21 The introduction of fixed costs for fast track trials in England are part of a full
procedural review and have been introduced only in relation to a limited
category of cases. The above analysis of that system, demonstrates the
difficulties and complexities which are inherent in any attempt to fix the costs
of litigation. It is also clear that there are significant procedural and structural
differences between the Irish and English legal systems, which make any
direct comparisons and guidance difficult to draw. However, the Bar Council
notes that, even in the limited contexts in which fixed costs have been
introduced in England, they allow of exceptions.
13
2.22 The Bar Council considers that the effect of “fixed costs” in England, subject,
as they are, to the exceptions out-lined above, is quite similar to the effect of
the “guidelines” as they are proposed by the Working Group. The Bar
Council submits that, before a system governing costs, and resembling the
mandatory effect of a fixed costs’ regime, could be introduced, it is necessary
to conduct a thorough analysis of the experience of other jurisdictions, the
costs and benefits of such a system and the risks which are inherent in any
attempt to fix legal costs directly.
New Zealand
2.23 The New Zealand Law Commission analysed the system of fixed recoverable
costs as follows:-
“In New Zealand, the use of scales to set lawyers’ fees, even non-compulsory
benchmark scales, has been and remains controversial. In the case of fixed fee
scales, there is concern that these can become inflexible and may not reflect
market rates unless reviewed regularly. They can place a “floor” under market
prices – holding prices up – and reduce competition… It is not clear if New
Zealand’s cost recovery rules influence the actual fees lawyers charge.
Anecdotally, there seems to be little direct connection between the fees lawyers
charge and the amount of costs awarded under the cost recovery rules.”25
2.24 The New Zealand Law Commission also noted that a system of fixed costs is
“inflexible and does not recognise the wide variety of work undertaken by
lawyers. There is a danger that infrequent amendment of fixed scales will
either fail to keep up with market prices, or will place a floor under market
prices and keep fees unrealistically high.”26
25
New Zealand Law Commission, Seeking Solutions: Options for Change to the New Zealand Court
System (Preliminary Paper 52, December 2002).
26
New Zealand Law Commission, “Delivering Justice for All: A Vision for New Zealand Courts and
Tribunals (Report 85, March 2004), Part 2, “Access to Courts”.
14
New South Wales
2.25 In New South Wales legal costs were formerly regulated by means of fixed
scales. This system was found to have curtailed competition and to have kept
costs at an artificially high level. In particular, there was a perception that
“scales of fees had become base fees and stifled competition”.27 The scales
were also criticised as being “highly complex and administratively
cumbersome.”28 The scales were therefore removed in 1994, and replaced by
a system which focused on disclosure rather than fixed costs. This so-called
deregulation was generally agreed to have been successful and to have
enhanced competition.29
Australia (Federal Courts)
2.26 While the Australian federal courts do have fixed scales for party and party
legal costs, the Australian Attorney General’s Department has examined the
merits of this system and identified a number of weaknesses with the system,
including the following:-
“(i) the present scales are expected to serve too many policy goals;
(ii) the present scales create uncertainty;
(iii) the present scales create a disincentive to settle and the incentive to prolong
litigation;
(iv) the present scales encourage wastage of resources; and
(v) the present scales bias expenditure towards certain inputs and away from
others.”30
27
New South Wales’ Legal Fees Review Panel, “Lawyers Costs and Time Billing” (Discussion Paper,
November 2004) at para 1.3.
28
New South Wales’ Legal Fees Review Panel, “Lawyers Costs and Time Billing” (Discussion Paper,
November 2004) at para 1.2.
29
See New South Wales, Office of the Attorney General, Legislation and Policy Division, “Review of
the Legal Profession Act Final Report”.
30
Attorney General’s Department, Report of the Review of Scales of Legal Professional Fees in
Federal Jurisdictions (March 31, 1998) at para 2.15 (Australia).
15
Ontario
2.27 The Rules of Civil Procedure in Ontario originally set out general factors that
were to be used in assessing costs.31 This provision was substantially
amended in 2002 by the introduction of a costs grid, which created a formula
for determining hourly rates for lawyers based on years of experience. The
objective of the grid was to make costs more predictable, uniform and
consistent.
2.28 This costs grid was perceived as being overly generous and leading to higher
costs. The courts and taxing masters therefore began to treat the grid as a
ceiling for fees and exercised their discretion to award costs below the level
fixed by the grid. The following dicta of the Ontario Court of Appeal was
cited in a paper by Nordheimer J.:-
“1. The fixing of costs is not simply a mechanical exercise. In
particular the fixing of costs does not begin and end with a
calculation of hours times rates. That result is but one factor in the
assessment process, together with the other factors in Rule 57.01.
2. While it is appropriate to do the costs grid calculation it is also
necessary to step back and consider the result produced and question
whether, in all the circumstances, the result is fair and reasonable.
3. In deciding what is fair and reasonable … the expectation of
the parties concerning the quantum of a costs award is a relevant
factor.”32
2.29 This approach reduced the predictability and consistency for which the grid
was designed. The grid was therefore removed in 2005 and replaced by a
system of assessment of costs based on the discretionary factors set out in
Rule 57.01 of the Civil Procedure Rules.
31
Civil Procedure Rules, Rule 57.01 (Ontario).
16
Ireland
2.30 The weaknesses of a system of fixed costs have also been seen in Ireland, and
in particular, in the operation of Appendix W to the Rules of the Superior
Courts.33 The Competition Authority has also expressed disapproval of a
system of fixed costs, stating that, “The setting of fees by regulation is harmful
to competition.”34
Submission 2
2.31 In light of the criticisms and failures of fixed scales systems in Ireland and
elsewhere, the Bar Council strongly endorses the Working Group’s
recommendation that such fixed scales should not be introduced. The Bar
Council submits that fixed scales are anti-competitive and are neither
desirable nor workable as a means of determining legal costs. The Bar
Council accordingly submits that the guidelines that are proposed by the
Working Group should not have the same, or a similar effect, as fixed scales of
legal costs. For this reason, the Bar Council submits that the Implementation
Advisory Group should ensure that the proposed guidelines do not directly or
indirectly have the same effect as fixed scales for recoverable legal costs.
2.32 If the proposed guidelines will be truly flexible and adaptable and not
equivalent to fixed scales, there are other concerns that need to be addressed.
In particular, the Bar Council notes that where such guidelines have been
introduced, the experience does not appear to have been wholly positive.
2.33 The example of New Zealand may be cited. In New Zealand, the High Court
Rules contain rules for the determination of recoverable costs, which fix a
daily recovery rate, based on an objective assessment of both the complexity
of the case and the time it requires. While these scales appear to have been
32
Paper by Justice Ian Nordheimer “Civil Law Update – Costs” (Spring Education Seminar, May 4,
2005.), quoting decision in Boucher v. Public Accountants Council for the State of Ontario (2004) 71
O.R. 3d 291.
33
See Report of the Legal Costs Working Group (November 2005) at para 2.20.
34
Competition Authority, “Study of Competition in Legal Services” (Preliminary Report, February 24,
2005) at para 12.22.
17
intended to guide the costs charged beyond the scope of their direct
application, there appears to be widespread ignorance of these rules in New
Zealand and it has been recorded by the New Zealand Law Reform
Commission that the amounts allowed do not reflect the true level of legal
costs being charged, that they fail to fully compensate successful litigants and
that, despite being updated regularly, the sums allowed are at times
“derisory”.35 The Bar Council submits that the failings of the system that was
introduced in New Zealand should be borne in mind by the Implementation
Advisory Group in giving effect to the recommendations contained in the
Report of the Legal Costs Working Group.
2.34 Another system which may be regarded as bearing similarity to the
“guidelines” recommended by the Working Group, was introduced recently in
England. Since the introduction of “fast track” cases in England for certain
categories of cases, and the necessity of “summary assessment” of legal costs,
there have been guidelines introduced in that jurisdiction to assist judges in the
assessment of costs. It should be noted that the categories of cases to which
these guidelines apply are very particular and limited. However, despite the
limited scope of the costs guides, the Supreme Court Costs Office, which has
drawn up these “guides”, states clearly that,
“As to the standing of the Guide it is, as it makes clear, no more than a guide
and a starting point for Judges carrying out summary assessment. The figures
set out in Appendix 2 to the Guide are broad approximations only. The Guide is
intended to be of help and assistance to Judges but is not intended as a substitute
for the proper exercise of their discretion having heard argument on the issues to
be decided.”36
2.35 The Office further clarified that, in relation to solicitors’ legal costs, “The
guideline rates are not scale figures: they are broad approximations only.”37
35
See further above.
36
Supreme Court Costs Office, Guide to the Summary Assessment of Costs (December 21, 2004).
37
Supreme Court Costs Office, Guide to the Summary Assessment of Costs (December 21, 2004).
18
2.36 The guidelines for counsel’s fees were described as follows:
“A proper measure for Counsels' fees is to estimate what fee a hypothetical
Counsel, capable of conducting the case effectively, but unable or unwilling to
insist on the higher fees sometimes demanded by Counsel of pre-eminent
reputation, would be content to take on the brief: but there is no precise standard
of measurement and the judge must, using his or her knowledge and experience,
determine the proper figure. (Per Pennycuick J in Simpsons Motor Sales
(London) Ltd. v Hendon Borough Council [1965] 1 WLR 112.)”38
2.37 The Supreme Court Costs Office further clarified that the table of counsel’s
fees which was drawn up for “proceedings in run of the mill cases in the
Queen’s Bench and Chancery Divisions and in the Administrative Court… are
not recommended rates but it is hoped that Judges may find the figures of
some help when they are called upon to assess Counsel’s fees.” In this regard
it was noted that, “It has not been possible to publish more specific guideline
figures because of lack of sufficient data” and that “The figures… are based
upon figures supplied by the Bar and in broad terms the figures are averages
based on the information supplied.”39
2.38 The Costs Office proceeded to state that the figures for recommended brief
fees may be reduced for less experienced counsel and increased for more
experienced counsel, as the “guideline figures are a starting point only and the
Court has the discretion to allow fees appropriate to the particular
circumstances of the appeal.”40
2.39 The Bar Council submits that the effect of the guides drawn up in England is
not the same or similar to scales of costs and may be used as a model for the
proposed guidelines recommended by the Working Group in this jurisdiction.
In particular, the Bar Council draws the Implementation Advisory Group’s
38
Supreme Court Costs Office, Guide to the Summary Assessment of Costs (December 21, 2004) at
para 47.
39
Supreme Court Costs Office, Guide to the Summary Assessment of Costs (December 21, 2004) at
paras 48-49.
40
Supreme Court Costs Office, Guide to the Summary Assessment of Costs (December 21, 2004) at
paras 70.
19
attention to the fact that the guides which have been promulgated (and
periodicially updated) in England expressly refuse to impinge upon the
discretion of the court regarding costs. The guides as to costs are merely
starting points, and are not recommended rates. Moreover, the Bar Council
notes that the it was not considered appropriate to fix hourly rates for counsel
as the Supreme Court Costs Office considered that this would “reward the
indolent and penalise the expeditious”.41
2.40 The Bar Council is mindful of the fact that it was only in “fast track” cases or
cases the trial of which lasted less than one day, that it was considered
appropriate to issue guidance in relation to the level of costs. This is a fact
which must be borne in mind by the Implementation Advisory Group.
Submission 3
2.41 The Bar Council submits that, while the context within which the cost guides
were formulated in England is very particular and must be born in mind in
assessing that costs’ system, the costs guidelines of that jurisdiction appear to
truly have the effect of guidelines rather than scales of costs. The Bar Council
therefore submits that the effect (if not necessarily the content) of the English
costs’ guidelines should be considered as a useful model by the
Implementation Advisory Group.
2.42 A further point regarding the effect of the proposed guidelines, is that the
Working Group, at paragraph 7.17 of the Report, recommends that the “cost
recovery guidelines… would inform billing and assessment.” The Bar
Council considers that this recommendation reflects the appropriate weight to
attach to the proposed guidelines. It is submitted that guidelines with a more
direct effect than “informing” the level of legal costs, would effectively
constitute scales of costs. The Bar Council reiterates that the proposed
guidelines should only be of relevance as a guide and a means of “informing”
41
Supreme Court Costs Office, Guide to the Summary Assessment of Costs (December 21, 2004) at
paras 70.
20
the appropriate level of legal costs and should not have the same, or a similar
effect, as scales of fixed costs.
Submission 4
2.43 The Bar Council reiterates that the proposed guidelines should only be of
relevance as a guide and a means of “informing” the appropriate level of
legal costs and should not have the same, or a similar, effect as scales of fixed
costs.
2.44 A final point to note about the effect of the Working Group’s proposed
guidelines for recoverable costs, is that there is one reference in the Report to
“limits” on costs. At paragraph 7.18, the Working Group recommends the
establishment of a legal costs regulatory body which would exercise “new
powers to set guidelines and limits in respect of costs” (emphasis added). This
is the sole reference in the Report to limits being imposed on recoverable costs
and there is no elaboration or explanation regarding the formulation or
imposition, of such “limits”.
2.45 The Bar Council is concerned that imposing “limits” on recoverable costs is a
step further than the “guidelines” recommended and considered throughout the
Working Group’s Report. In the absence of more detailed information, the
Bar Council does not propose to make submissions in relation to this single
reference to the imposition of “limits” on recoverable costs. However, the Bar
Council would draw the attention of the Implementation Advisory Group to
the fact that the Working Group’s Report does not favour “fixed scales” and
that it expressly recommends that costs can be allowed in excess of those set
out in the proposed guidelines.42 The Bar Council would also draw the
attention of the Implementation Advisory Group to the negative reception and
experience of “caps” on legal costs in other jurisdictions.
2.46 The Civil Justice Council in England noted a judicial determination to the
effect that,
42
See Report of the Legal Costs Working Group at paras 5.21 and 5.23.
21
“…a prospective costs capping order should only be contemplated where there
are grounds for believing that a party may incur excessive or disproportionate
legal costs and where the risk that excessive legal costs are being incurred
unnecessarily will not be picked up by the court when exercising case
management functions, or when conducting a detailed assessment of costs after
the trial. Costs capping was a relatively dramatic course to take and would only
be ordered on cogent evidence."43
2.47 The Civil Justice Council proceeded to recommend that “in non personal
injury fast track and multi track cases below a value of £1m costs
capping/budgeting should not apply unless the Court orders otherwise.”44
Submission 5
2.48 The Bar Council requests clarification in relation to the “limits” referred to at
paragraph 7.18 of the Report and would welcome the opportunity to make
such further submissions as may be appropriate, upon receipt of the requested
clarification
(iii) Formulation of proposed “guidelines”
2.49 The Working Group recommends the establishment of a Legal Costs
Regulatory Group with responsibility for drawing up guidelines for the
quantification of recoverable costs. It is necessary to examine the content of
this proposal. In this regard, there appear to be certain inconsistencies and
ambiguities in the various descriptions of the proposed guidelines in the
Report itself. It is therefore proposed to consider the areas of apparent
uncertainty in relation to the proposed guidelines, and then to address the
various possibilities and alternatives for the formulation of the guidelines, in
the ensuing submissions.
43
Civil Justice Council “Improving Access to Justice: Funding Options and Proportionate Costs”
(August 2005) at para 13, citing Sayers v SmithKline Beecham [2004] EWHC 1899 (QB) Keith J.
44
Civil Justice Council “Improving Access to Justice: Funding Options and Proportionate Costs”
(August 2005) at para 13.
22
2.50 The Working Group variously described these guidelines in the following
language:-
(a) “cost guidelines… based on an assessment of the amount and nature of work
required to be done in such a case and comprehend such elements as:
the appropriate hours expended by the various persons to be
remunerated,
the complexity of the proceedings and the stages therein, and
the level of the court in which the case is heard;”45
(b) “While some cognisance should be given to the financial value of the claim or
counterclaim in dispute and the complexity of the case,… costs should be
primarily assessed by reference to work actually and appropriately done and
… the level of recoverable costs should not be proportionate to that value nor
should it be the main determinant of the amount of costs recoverable;”46
(c) “the amounts of legal costs that normally can be expected to be recovered in
respect of particular types of proceedings or steps within proceedings for each
jurisdiction;”47
(d) “guidelines on amounts deemed reasonable with reference to the time that
would generally be expended on the task;”48
(e) “the recoverable costs set by the body would encompass a financial amount
measured against a timeframe;”49
45
Report of the Legal Costs Working Group (November 2005) at para 2.3.
46
Report of the Legal Costs Working Group (November 2005) at para 2.6.
47
Report of the Legal Costs Working Group (November 2005) at para 5.22.
48
Report of the Legal Costs Working Group (November 2005) at para 5.22.
49
Report of the Legal Costs Working Group (November 2005) at para 5.22.
23
(f) “a set of fee guidelines for each aspect of work done adjusted to take into
consideration the time taken in conducting the action, its complexity and the
jurisdictional level of the action;”50
(g) “recoverable costs should only be for work actually and appropriately done
with reference to the time that might reasonably be expended on the identified
task by a competent lawyer;”51 and
(h) “set ranges for the maximum number of hours which may be normally
recoverable as party and party costs for particular types of proceedings or
steps within proceedings.”52
2.51 These descriptions and recommendations are not wholly consistent with each
other. On the contrary, there are some significant variations in the
descriptions of the mechanisms and criteria to be used in the formulation and
application of the proposed guidelines. First, the proposed guidelines for
recoverable costs involve an objective assessment of the work for which the
legal costs are due, according to (a), (c), (d) and (h) above. However, the
description of these guidelines at (b), (f) and (g) suggests that the appropriate
legal costs should be measured by reference to the work actually done. This is
an important distinction and the Bar Council makes submissions in this regard
below.
2.52 A second inconsistency in the description of the proposed guidelines in the
Working Group’s Report relates to the quantification of the time for which the
legal costs should be payable. This criterion for assessing the appropriate
level of legal costs is variously described as the “appropriate hours expended
by the various persons to be remunerated” ((a) above); the “time that would
generally be expended” ((d) above); “the time taken in conducting the action”
((f) above); the “time that might reasonably be expended… by a competent
lawyer” ((g) above) and “set ranges for the maximum number of hours which
may be normally recoverable” ((h) above).
50
Report of the Legal Costs Working Group (November 2005) at para 5.24.
24
2.53 This list includes both objective and subjective means of quantifying the time
on which the proposed guidelines should be based and contains different
objective standards for such quantification. By way of illustration, the
guidelines, according to the Report, could be based on the time that would
generally be expended, the time that would reasonably be expended, the
maximum number of hours that would normally be expended or the time that
was actually expended. The Bar Council makes submissions on this point
below.
2.54 A third aspect of the proposed guidelines which is not entirely clear in the
Working Group’s Report, relates to the factors which should be considered in
setting such guidelines. At paragraph 2.2 of the Report, the Working Group
recommends that the guidelines take account of “the complexity of the
proceedings and the stages therein”. The complexity of the proceedings is not
referred to in other descriptions of the proposed guidelines. In the
recommendations quoted at (a) to (h) above, only two of the formulations of
the proposed guidelines envisage consideration being given to the complexity
of the proceedings.
2.55 Another factor that is included in some formulations of the proposed
guidelines is the jurisdictional level of the proceedings. This is mentioned as
a relevant criterion in three places in the Report (see (a), (c) and (f) above), but
not in the other descriptions of the proposed guidelines. A further factor that
may be relevant to the level of legal costs, according to the Working Group, is
the value of the claim. The Working Group recommends that “some
cognizance should be given to the financial value of the claim or counterclaim
in dispute” (see (b) above) but does not expressly include this criterion in the
description of the proposed guidelines for setting recoverable costs.
2.56 A final point that may be noted, is that the Working Group’s recommendations
regarding the elements that may be encompassed in the proposed guidelines,
do not purport to be exhaustive. On the contrary, the Working Group states
51
Report of the Legal Costs Working Group (November 2005) at para 5.24. See also para 5.32.
52
Report of the Legal Costs Working Group (November 2005) at para 7.17.
25
that the guidelines should “comprehend such elements as” those listed in the
Report.53 The Bar Council makes submissions below in relation to the factors
that should be taken into account in setting guidelines for recoverable legal
costs.
2.57 A fourth area of inconsistency in relation to the proposed guidelines for the
assessment of recoverable costs is the mechanism to be used to assess costs.
There are various alternative means of fixing costs guidelines, ranging from
rigid scales stipulating the costs payable for defined tasks, to guidelines based
on a subjective assessment of the work done. The Working Group in its
Report, recommends a number of different means of setting guidelines for
legal costs. These recommendations include the recommendation that the
guidelines be based on the work actually done (see (g) and (h) above), and the
recommendation that the guidelines be based on the costs that are objectively
reasonable or normal (see (c) and (d) above). The Report also recommends
that no fixed scales be adopted,54 while recommending the introduction of “set
ranges for the maximum number of hours which may be normally
recoverable” (see (h) above) and a “financial amount measured against a
timeframe” (see (e) above). These means of formulating the guidelines for
recoverable costs, as well as the approaches that have been adopted in other
jurisdictions, are addressed in the Bar Council’s submissions below.
Submission 6
2.58 The Bar Council submits to the Implementation Advisory Group that the
Working Group’s Report refers to a number of different possible means of
formulating and implementing the proposed “guidelines”, not all of which are
consistent with each other. While the Bar Council attempts to make
submissions in relation to the guidelines proposed by the Working Group, the
ambiguities and inconsistencies in relation to this aspect of the Report, make it
difficult to furnish definitive submissions. The Bar Council therefore hopes
that it will have the opportunity to make more informed and concrete
53
Report of the Legal Costs Working Group (November 2005) at para 2.3.
54
See Report of the Legal Costs Working Group (November 2005) at para 2.5.
26
submissions, when the content, scope and effect of the proposed guidelines
have been further clarified.
(iv) Implementation of proposed “guidelines”
2.59 The Working Group does not make any specific recommendations regarding
when and by whom the proposed “guidelines” would be applied. The Bar
Council welcomes further clarification in this regard and would welcome the
opportunity to make additional submissions upon receipt of such clarification.
B Submissions on proposed “guidelines”
(i) Assessment of work done
2.60 The description of the proposed guidelines in the Working Group’s Report
refers to both objective and subjective means of assessing the work done.
There are models for the objective assessment of legal work in other
jurisdictions. By way of example, the Bar Council is aware that New Zealand
has adopted a system for the recovery of costs that involves the designation of
cases into one of three categories depending upon its complexity and
significance and one of three categories depending upon the time which is
considered to be reasonably required for the work in question.55 According to
these rules, the legal costs that are recoverable are not defined by the actual
costs incurred.
2.61 The Law Commission of New Zealand has considered these rules governing
recoverable costs. In its report, “Delivering Justice for All: A Vision for New
Zealand Courts and Tribunals,”56 the Law Commission made a number of
observations and recorded a number of findings that were critical of the
system of objective calculation of recoverable legal costs.
55
See High Court Rules, Rules 46, 47 and 48 (New Zealand).
56
New Zealand Law Commission, Report 85, March 2004.
27
2.62 The first criticism was the rules were complex and difficult to understand.
The Law Commission stated:
“They are designed for use by lawyers who know more or less how much work
a particular matter might demand, and for judges in making costs orders, and are
not written in a way that will easily inform a non-lawyer. Indeed, since the High
Court Rules foresee that cost recovery will represent two-thirds of the daily rate
considered reasonable in relation to the work, the rules may in fact be
misleading as a guide on fee levels.”57
2.63 A second criticism was that the rules were not widely applied. The Law
Commission made the important observation that, “In New Zealand
information about these rules, or even the fact that they exist, is poor and in
reality, lawyers’ fees bear little relationship to the rules.”58
2.64 A further criticism was that successful parties to litigation rarely recover their
costs in full. The Law Commission noted in this regard that, under the High
Court Rules referred to above, and described at paragraph 5.19 of the Working
Group’s Report, “A complex assessment is carried out for each proceeding,
but successful parties seldom recover costs in full.”
2.65 Finally, it is of significant interest to note that the Law Commission of New
Zealand regarded the costs which were awarded under the High Court Rules
described above, did not reflect the true legal costs and were inadequate. The
Law Commission noted,
“The Buddle Findlay survey of leading New Zealand companies commented
that costs awarded under the High Court Rules bear little relationship to the real
costs incurred in major commercial litigation and are often regarded as
‘derisory’.”59
57
New Zealand Law Commission, Report 85, March 2004, para. 141.
58
New Zealand Law Commission, Report 85, March 2004, para. 137.
59
New Zealand Law Commission, Seeking Solutions: Options for Change to the New Zealand Court
System (Preliminary Paper 52, December 2002), Part 2, “Access to Courts” at p 94.
28
2.66 It is particularly interesting to note this latter apparent failing of the New
Zealand costs recovery system, when one considers that the scales of
recoverable costs are regularly updated in New Zealand60, and yet still fail to
reflect the true costs incurred in certain forms of litigation.
2.67 From a review of the rules governing the recoverable legal costs in New
Zealand and the experience of that system, as documented by the New
Zealand Law Commission, the Bar Council is concerned that a system which
attempts to quantify legal costs on the basis of an objective assessment of the
matter in question and the time and work required, as was attempted in New
Zealand, will find it difficult to avoid the following shortcomings:61
The formulation of any rule for the objective assessment of work required,
will either have to be highly complex, and subject to extensive exceptions and
qualifications, or it will not be workable;
A complex set of rules and systems for the determination of recoverable legal
costs on the basis of objective criteria will not be easily understood by
consumers;
If the objective means of assessing recoverable legal costs is not compulsory,
it is likely that it will not be applied in practice, as has been experienced in
New Zealand;
There is a significant danger that any attempt to fix guidelines for costs on an
objective basis will not accurately reflect the costs that have been incurred (the
experience in New Zealand where, despite the scales being updated regularly,
the costs are regarded as derisory, heightens this concern);
60
See, for example, High Court Amendment Rules (No. 2) 2003, which increased the “daily recovery
rates” with effect from January 1, 2004.
61
These concerns are supplemental to the broader concerns of the Bar Council in relation to a system
of fixed costs guidelines, which are addressed in more detail below.
29
If an objective assessment of work required is undertaken, for the purpose of
computing recoverable legal costs, a successful litigant will be unlikely to
recover the full legal costs incurred and will thereby be prejudiced;
The necessity to categorise a case and the work objectively involved in such a
case, will create additional costs.
2.68 As has been seen, the Working Group’s Report envisages the possibility that
the proposed guidelines for recoverable costs could take account of both
objective and subjective assessments of the work done. It is the Bar Council’s
submission to the Implementation Advisory Group that it is more accurate,
more workable, and more realistic, to formulate the guidelines in a manner
which encompasses the work actually done in a particular case, rather than
relying on an objective assessment of that work.
Submission 7
2.69 It is the Bar Council submission to the Implementation Advisory Group that it
is more accurate, more workable, and more realistic, to formulate the
guidelines in a manner which encompasses the work actually done in a
particular case, rather than relying on an objective assessment of that work.
(ii) Criterion of time spent
2.70 The Working Group recommends that the guidelines on costs be fixed
according to the time spent on the work in question. As noted above, the
Working Group’s Report contains various description of this criterion, ranging
from references to the time that would generally be expended, the time that
would reasonably be expended, the maximum number of hours that would
normally be expended or the time that was actually expended. It therefore
leaves open the possibility of employing either an objective assessment of the
time required or a subjective assessment of the time actually spent on the work
in question.
30
2.71 The Bar Council notes at the outset that it is not the established practice of
Irish barristers to charge fees on the basis of time expended. The Bar Council
is concerned that the introduction of a system of costs assessment based
strictly on time expended will encourage inefficiency, will lead to extra
categories of legal costs being incurred, and will not be to the benefit of
clients, among other weaknesses.
2.72 The Bar Council has considered the debate in other jurisdictions regarding
time-based billing. In New South Wales, Chief Justice Spigelman
commented at the Opening of the Law Term Dinner on the 2nd February, 2004,
that,
“One thing that has occurred over that period of ten years is that time based
charging has become almost universal. I do not believe that this is sustainable. I
note that last year, your past President, Robert Benjamin, published in the Law
Society Journal a thoughtful piece on the tyranny of the billable hour. As I and
my predecessor, Chief Justice Gleeson, have often said over the years, it is
difficult to justify a system in which inefficiency is rewarded with higher
remuneration. The difficulty of course is that the person providing the service,
namely the legal practitioner, does not have a financial incentive to do the
service as quickly as possible.”
2.73 A Legal Fees Review Panel was subsequently established, which issued a
discussion paper on “Lawyers Costs and Time Billing” in November, 2004.
This Discussion Paper considered some of the negative consequences of the
time-based billing, such as inflated fees; unethical billing practices; damage to
the lawyer-client relationship; rewards for inefficiency; the lack of any
connection between the outcome of the matter and the fee charged; among
others. The Review Panel quoted the following list of criticisms of the
practice of hourly billing:
“Total legal expense to clients is too high;
There is little incentive for efficiency and early resolution of matters;
31
Risk-sharing between lawyer and client is absent;
The effective, efficient lawyer is not fairly compensated;
The cost-effectiveness and benefits of systems and technology are not
recognised;
The value of the services rendered to the client may not be fairly measured;
and
Nobody can predict with certainty what the fee will be.”62
2.74 The Legal Fees Review Panel noted that,
“[i]t appears that clients under the present system of hourly billing are not in a
position to freely communicate with their lawyer about their matter or the bills
of costs they receive because of the pressure to incur the minimum expenses.
Anecdotal comment… suggests the legal profession see the final bill as a
‘bottom line’ and clients would prefer their issues were dealt with in the
minimum time possible than have longer and more detailed consultations.”63
2.75 The Review Panel described the negative effect of hourly billing on the
lawyer-client relationship as follows:
“It is not just overcharging however that is of concern to the critics of hourly
billing, the effects on the lawyer/client relationship have had an equally
devastating effect. The unfortunate consequence in focusing on billing as many
hours as is physically possible has meant that lawyers no longer take the time to
sit down and communicate with their client about the fees involved or discuss
the progress of the matter. The factory environment of the law firm reinforces
62
Legal Fees Review Panel, “Lawyers Costs and Time Billing” (Discussion Paper, November, 2004) at
para 3.6.
63
Legal Fees Review Panel, “Lawyers Costs and Time Billing” (Discussion Paper, November 2004) at
para 2.56.
32
the ethos that time is money and one cannot waste time on tasks that cannot be
billed.”64
2.76 The Panel concluded that,
“It is important to consider whether the entrenching of time billing in the legal
profession is leading to systemic breakdown in the solicitor-client relationship
by virtue of the fact the structural assumptions on which time billing is built
puts it in opposition to principles of good communication.”65
2.77 The Review Panel considered the appropriateness of hourly billing from the
perspective of the quality and value of the work required to be done, noting
that,
“ Hourly billing penalises the efficient and productive lawyer who is able to
complete a matter in less time than his lazy counterpart. Critics of hourly
billing argue that the number of hours it takes to complete a task does not
necessarily correlate to the value of that particular task to the client. As
Professor Hornstein states: ‘One thousand plodding hours may be far less
productive than one imaginative brilliant hour. A surgeon who skilfully
performs an appendectomy in seven minutes is entitled to no smaller fee than
one who takes an hour; many a patient would think he is entitled to more. The
dubious value of the time factor as a standard for legal services has been
recognized by many courts: The value of a lawyer’s services is not measured
by time or labour merely…Another factor to be borne in mind is that when
hours become a criterion, economy of time may cease to be a virtue.
Inexperience, inefficiency, even incompetence will be rewarded. Expeditious
termination of litigation will be discouraged - to the great cost of all
concerned’.”66
64
Legal Fees Review Panel, “Lawyers Costs and Time Billing” (Discussion Paper, November, 2004) at
para 3.20.
65
Legal Fees Review Panel, “Lawyers Costs and Time Billing” (Discussion Paper, November 2004) at
para 2.57.
66
Legal Fees Review Panel, “Lawyers costs and Time Billing” (Discussion Paper, November 2004) at
para 3.12, quoting, ‘Legal Therapeutics: The ‘Salvage’ Factor in Counsel Fee Awards 69 Harvard Law
33
2.78 In the United States, the American Bar Association has also criticised hourly
billing on the following grounds, among others:-
discourages taking on pro bono work
does not encourage project or case planning
provides no predictability of cost for client
may not reflect value to the client
penalizes the efficient and productive lawyer
discourages communication between lawyer and client
encourages skipping steps
fails to discourage excessive layering and duplication of effort
fails to promote a risk/benefit analysis
does not reward the lawyer for productive use of technology
puts client’s interests in conflict with lawyer’s interests
client runs the risk of paying for:
— the lawyer’s incompetency or inefficiency
— associate training
— associate turnover
— padding of timesheets
results in itemized bills that tend to report mechanical functions, not value of
progress
results in lawyers competing based on hourly rates.67
2.79 In England, the Supreme Court Costs Office introduced costs guides for use in
summary assessments and in relation to proceedings in the Court of Appeal,
Review 658(1956) at p. 660 cited by George Russell Meurer, ‘Value Billing: A Valid Alternative to
Time Billing?’ 55(7) Texas Bar Journal 719(1992).
67
ABA Commission Report on Billable Hours (2001-2002).
34
stated that, “Counsel’s fees depend upon the seniority of Counsel which it was
reasonable to instruct and the market price for the item of work in question”.
The Costs Office moreover notably stated that
“It is not appropriate to specify an hourly rate for Counsel and to remunerate
them at a multiple of that rate according to the number of hours reasonably
spent. Such an approach would reward the indolent and penalise the
expeditious.”68
2.80 Other jurisdictions have considered, and some have implemented, alternative
means of quantifying costs, in place of time-based billing systems. Among the
systems for determining legal costs which have found favour are so-called
“event based billing” and “value billing”. The Australian Law Reform
Commission (“ALRC”) made submissions to the New South Wales’ Legal
Fees Review Panel in December 2004. The submissions of the ALRC
included the submission that item and time based billing, as it operated in the
federal courts of Australia at that time, “have been criticised as badly
structured; creating uncertainty about the amount a successful litigant will
recover; promoting litigation (rather than settling or controlling expenditure);
and rewarding outmoded work practices”.69
2.81 The ALRC supported the criticisms in the Review Panel’s Discussion Paper of
the system of hourly billing and encouraged “reforms that will place greater
emphasis on value billing. Event-based fees would provide a greater certainty
about costs for clients, and also enhance the development of practice
techniques based on quality and efficiency rather than the time spent on a
matter.”70
2.82 The Bar Council submits that a system for determining the appropriate level of
recoverable legal costs, which is based on time expended, will be problematic
68
Supreme Court Costs Office, Guide to the Summary Assessment of Costs (December 21, 2004) at
paras 69.
69
Australian Law Reform Commission, Submissions to the New South Wales’ Legal Fees Review
Panel (December 2004) at para 4.
70
Australian Law Reform Commission, Submissions to the New South Wales’ Legal Fees Review
Panel (December 2004) at para 9.
35
in the context of the practice of an Irish barrister. In addition to the problems
with hourly billing which were identified in other jurisdictions and outlined
above, there are additional features of the practice of an Irish barrister which,
the Bar Council submits, render time-based billing inappropriate.
2.83 First, a barrister receives instructions from a solicitor and a client does not
have direct control or influence over the precise instructions and pattern of
events that are relevant to the barrister’s discharge of his tasks. Secondly, as
the work of barrister is primarily contentious, there will be other parties,
whose conduct will directly affect the number of hours which a barrister is
obliged to spend on the matter. Therefore, by contrast with certain other areas
of legal practice, litigation is highly unpredictable and the hours that a
barrister must expend on a particular matter are often beyond the control of an
individual litigant and his legal representatives. The fairness of penalising the
litigant for the time that is spent on the matter, may be questioned.
2.84 Thirdly, a barrister does not typically charge for disbursements, such as
photocopying, postage, telephone calls, research expenses, travel and
accommodation expenses. However, if a time-based billing system is
advocated, a barrister will have to recoup these expenses separately, which
will in turn involve higher administration costs and ultimately, higher costs for
clients.
2.85 Fourthly, many aspects of a barrister’s work are not presently charged to a
client, such as appearances in court in lists to fix dates, call-overs, or for such
matters as uncontested adjournments. However, if time-based billing is to be
introduced, each of these events, among many others, will have to be
separately recorded and invoiced. This will increase the administrative
expense involved and will increase the costs to clients. Fifthly, a barrister may
discharge tasks related to a number of different cases in the same forum, such
as setting a number of cases down for hearing in a single list to fix dates. If
this work is to be billed on the basis of time, it will be very difficult to divide
up the costs between the various matters dealt with. Similarly, a barrister will
often engage in important discussions with counterparts and with instructing
36
solicitors in contexts that do not strictly relate to a particular client’s case. By
way of example, a barrister and solicitor who are acting together for a number
of different clients, would often discuss those various matters in the course of
a single conversation. If each such discussion is to be become billable
according to time spent, this will have an impact on the fees ultimately
charged.
2.86 It is the Bar Council’s submission to the Implementation Advisory Group that
the amount of time expended on a matter is one factor to be taken into account
in assessing the appropriate level of legal costs, and is so reflected in the Code
of Conduct of the Bar of Ireland, but that it should only be one of the factors to
be weighed.71 The Bar Council submits that extreme caution should be
exercised before introducing guidelines for the determination of recoverable
legal costs, on the basis of the time spent on the matter in question. In other
jurisdictions in which time-based billing has become the practice, this system
of billing has received sustained and virulent criticism. Moreover, such a
system of billing would be singularly unsuitable for assessing the work of a
barrister, as explained above. Finally, the Bar Council reiterates, as stated by
Professor Hornstein and quoted by the New South Wales Legal Fees Review
Panel,
“‘One thousand plodding hours may be far less productive than one imaginative
brilliant hour. A surgeon who skilfully performs an appendectomy in seven
minutes is entitled to no smaller fee than one who takes an hour; many a patient
would think he is entitled to more. The dubious value of the time factor as a
standard for legal services has been recognized by many courts: The value of a
lawyer’s services is not measured by time or labour merely…Another factor to
be borne in mind is that when hours become a criterion, economy of time may
cease to be a virtue. Inexperience, inefficiency, even incompetence will be
rewarded. Expeditious termination of litigation will be discouraged - to the
great cost of all concerned’.”72
71
Code of Conduct of the Bar of Ireland (March 13, 2006), Rule 12(1)(a). See further below.
72
Legal Fees Review Panel, “Lawyers costs and Time Billing” (Discussion Paper, November 2004) at
para 3.12, quoting, ‘Legal Therapeutics: The ‘Salvage’ Factor in Counsel Fee Awards 69 Harvard Law
37
Submission 8
2.87 It is the Bar Council’s submission to the Implementation Advisory Group
that the amount of time expended on a matter is one factor to be taken into
account in assessing the appropriate level of legal costs, and is so reflected
in the Code of Conduct of the Bar of Ireland, but that it should only be one
of the factors to be weighed.73 The Bar Council submits that extreme
caution should be exercised before introducing guidelines for the
determination of recoverable legal costs, on the basis of the time spent on
the matter in question. In other jurisdictions in which time-based billing
has become the practice, this system of billing has received sustained and
virulent criticism. Moreover, such a system of billing would be singularly
unsuitable for assessing the work of a barrister.
2.88 The Bar Council notes that there are certain formulations of the criterion of
time spent in the Working Group’s Report which suggest an objective
assessment of the time required should be conducted. The Bar Council
considers that there are many issues regarding the allocation of judicial
resources, the organisation of courts lists, delays in any litigation, among
other matters, which make the objective quantification of time required for
particular steps in proceedings extremely difficult, if not impossible.
2.89 The Bar Council notes the recommendations in Chapter Eight of the
Working Group’s Report that are designed to reduce delays and increase
the predictability of litigation. These recommendations are welcomed.
However, until such recommendations are implemented, and the delays and
uncertainties of litigation are addressed, it is not realistic to attempt to
assign objective timeframes to designed tasks.
Review 658(1956) at p. 660 cited by George Russell Meurer, ‘Value Billing: A Valid Alternative to
Time Billing?’ 55(7) Texas Bar Journal 719(1992).
73
Code of Conduct of the Bar of Ireland (March 13, 2006), Rule 12(1)(a). See further below.
38
Submission 9
2.90 The Bar Council submits that until the structural and procedural factors
that inhibit the efficiency and predictability of the litigation process are
addressed, and the recommendations of the Working Group towards this
end are implemented, it is not realistic to attempt to assign objective
timeframes to particular tasks and steps within the litigation process.
(iii) Value of claim
2.91 The Working Group recommends that,
“Consideration should be given, where the type of action renders this
appropriate, to the value of the claim or counterclaim involved. The question as
to how cognisance of the value of the case may be taken into account should
also be considered. However, in no event should the level of recoverable costs
be directly proportionate to the value of the case.”74
2.92 The Bar Council welcomes this recommendation and refers the
Implementation Advisory Group to the following rule of the Code of Conduct
for the Bar of Ireland: “Barristers may not accept instructions on condition
that payment will be subsequently fixed as a percentage or other proportion of
the amount awarded.”75
Submission 10
2.93 The Bar Council submission to the Advisory Implementation Group is that,
while legal costs should not be fixed as a direct proportion of the value of a
claim, the value of a case and its importance are factors that should be taken
into account in determining a reasonable level of legal costs.
74
Report of the Legal Costs Working Group (November 2005) at para 5.23.
75
Code of Conduct for the Bar of Ireland (March 13, 2006), Rule 12.1(e).
39
(iv) Other factors
2.94 The Bar Council has examined the approaches of a number of other
jurisdictions in relation to the criteria that should be taken into account in
assessing the appropriate level of legal costs.
2.95 The American Bar Association (“ABA”) Model Rules of Professional
Conduct state that a reasonable fee should be assessed having regard to the
following factors:
“(1) the time and labor required, the novelty and difficulty of the questions
involved, and the skill requisite to perform the legal service properly;
(2) the likelihood, if apparent to the client, that the acceptance of the particular
employment will preclude other employment by the lawyer;
(3) the fee customarily charged in the locality for similar legal services;
(4) the amount involved and the results obtained;
(5) the time limitations imposed by the client or by the circumstances;
(6) the nature and length of the professional relationship with the client;
(7) the experience, reputation, and ability of the lawyer or lawyers performing
the services; and
(8) whether the fee is fixed or contingent.”76
2.96 The Australian Law Reform Commission conducted an extensive survey of
other jurisdictions’ approaches to the issue of legal costs and concluded that
legal professional rules should provide criteria for determining reasonable fees
and that these criteria should use as a guide, the ABA’s Model Rules of
76
American Bar Association, Center for Professional Responsibility, Model Rules of Professional
Conduct, Rule 1.5(a).
40
Professional Conduct.77 The Australian Law Reform Commission listed
precisely the same factors as the ABA, as listed above.
2.97 The Standing Committee of Attorney Generals of Australia subsequently
promulgated model provisions for the regulation of Australia’s legal
profession.78 These included a provision that, on a review of legal costs, the
following criteria, among others, could be taken into account in determining
whether the costs were fair and reasonable:
“…(d) any relevant costs agreement;
(e) the skill, labour and responsibility displayed on the part of the Australian
legal practitioner or Australian-registered foreign lawyer responsible for the
matter;
(f) the retainer and whether the work done was within the scope of the retainer;
(g) the complexity, novelty or difficulty of the matter;
(h) the quality of the work done;
(i) the place where, and circumstances in which, the legal services were
provided;
(j) the time within which the work was required to be done;
(k) any other relevant matter.”79
2.98 In New South Wales, the Legal Profession Act 2004, provides that the
following factors may be considered in assessing legal costs:
“…(d) the skill, labour and responsibility displayed on the
part of the Australian legal practitioner or Australian-
77
See ALRC “Managing Justice: A Review of the Federal Civil Justice System” (ALRC 89, 2000) at
paras 4.48 to 4.50. The Law Reform Commission recommended that “these factors are not intended to
be exhaustive of prescriptive, but indicative of the matters to be taken into account” (para 4.49). The
Australian Government, in its Response to the ALRC supported this recommendation.
78
Standing Committee of Attorneys-General, Model Provisions (August 7, 2003).
79
Standing Committee of Attorneys-General, Model Provisions (August 7, 2003), section 1041.
41
registered foreign lawyer responsible for the matter,
(e) the retainer and whether the work done was within the
scope of the retainer,
(f) the complexity, novelty or difficulty of the matter,
(g) the quality of the work done,
(h) the place where, and circumstances in which, the work
was done,
(i) the time within which the work was required to be done,
(j) any other relevant matter.”80
2.99 The Rules of Professional Conduct which govern barristers and solicitors in
New Zealand require that, “A practitioner shall charge a client no more than a
fee which is fair and reasonable for the work done, having regard to the
interests of both client and practitioner.”81
2.100 The Commentary which is attached to the Rules of Professional Conduct
states that,
“Charges must be fair and reasonable in all the circumstances. Practitioners are
referred to the Society's Conveyancing Practice Guidelines. The ‘Principles of
Charging’ set out in the guidelines include:
Charges by a lawyer for professional work shall be calculated to give a fair and
reasonable return for the services rendered, having regard to the interests of both
client and lawyer. Charges shall take account of all relevant factors, including:
(a) the skill, specialised knowledge, and responsibility required
(b) the importance of the matter to the client and the results achieved
(c) the urgency and circumstances in which the business is transacted
80
Legal Profession Act 2004 (in force October 1, 2005), sections 328(7) and 363(2).
81
Rules of Professional Conduct for Barristers and Solicitors (7 th Ed., 2006), Rule 3.01 (New Zealand).
42
(d) the value or amount of any property or money involved
(e) the complexity of the matter and the difficulty or novelty of the questions
involved
(f) the number and importance of the documents prepared or perused
(g) the time and labour expended
(h) the reasonable costs of running a practice.
The relative importance of the factors set out above will vary according to the
particular circumstances of each transaction.”
2.101 In England, the Civil Procedure Rules provide that a court should take account
of the following criteria in determining the appropriate legal costs:
“(a) the conduct of all the parties…
(b) the amount or value of any money or property involved;
(c) the importance of the matter to all the parties;
(d) the particular complexity of the matter or the difficulty or novelty of the
questions raised;
(e) the skill, effort, specialised knowledge and responsibility involved;
(f) the time spent on the case; and
(g) the place where and the circumstances in which work or any part of it was
done.82
2.102 The General Council of the Bar in England has listed the following guidance
to barrister in fixing fees:
“ When a brief fee has not been agreed and is claimed by Counsel in a sum
greater than the product of an hourly rate and the number of hours actually
worked in preparation of the brief, this should be recorded in a note to be
43
submitted with the fee note. Details in the supplementary note should include,
but are not limited to:
(i) The seniority, reputation and relevant expertise of Counsel;
(ii) The complexity of the case;
(iii) The amount of preparation required in advance of the hearing;
(iv) Counsel’s commitment to a fixed hearing date, if any;
(v) The expected length of the case and, therefore, the time reserved
for it in Counsel’s diary;
(vi) The urgency of the matter when Counsel was briefed;
(vii) The amount of work required out of Court and in the preparation
of any kind of written submission during the hearing;
(viii) The importance of the case to the parties or any of them, or to
the public interest.”83
2.103 The Code of Conduct of the Bar of Northern Ireland84 provides as follows:
“A barrister is entitled and obliged to mark a proper and reasonable fee in
respect of each brief and item of work for which instructions have been
accepted and the barrister is entitled to take into account when marking or
nominating such fee all features of the instructions which bear upon the
commitment which is thereby undertaken including:-
(i) the complexity of the issues or subject matter.
(ii) the length and venue of any trial or hearing.
(iii) the amount or value of any claim or subject matter in issue.
(iv) the time within which the work is required to be undertaken.
(v) any other special feature of the case.”85
82
Civil Procedure Rules, Rule 44.5(3).
83
See Bar Council, “Guidance on Counsel’s Fee Notes” at www.barcouncil.org.uk.
84
Code of Conduct of the Bar of Northern Ireland as adopted on March 6, 2003.
44
2.104 In Ireland, the Solicitors’ Remuneration General Order 1960 provided
guidance on the computation of instruction fees. Section 5 of that Order
provides that an instruction fee shall be:
“Such fee as may be fair and reasonable having regard to all the circumstances
of the case, including:—
(a) the complexity, importance, difficulty, rarity or
urgency of the questions raised;
(b) where money or property is involved, its amount or
value;
(c) the importance of the matter to the client;
(d) the skill, labour, and responsibility involved therein
and any specialised knowledge given or applied on
the part of the solicitor;
(e) the number and importance of any documents
perused;
(f) the place where and the circumstances in which the
business or any part thereof is transacted; and
(g) the time reasonably expended thereon.
2.105 In Crotty v. An Taoiseach,86 Barr J. considered the following factors to be
relevant to the computation of legal costs (solicitors’ instruction fees in that
instance):
(a) the magnitude of the case;
(b) the unique and complex nature of the case;
(c) the importance of the case;
85
Code of Conduct of the Bar of Northern Ireland as adopted on March 6, 2003, section 31.11.
86
[1987] I.L.R.M. 400; [1990] I.L.R.M. 617.
45
(d) time spent on the case;
(e) the skill and experience of the solicitors;
(f) the speed of the work done;
(g) the pressure exerted on the solicitor;
(h) the nature and volume of documentation involved;
(i) assistance from the client and/or counsel.
2.106 The Code of Conduct for the Bar of Ireland87 provides as follows:
“Barristers’ fees are based upon work done. Barristers are entitled to charge for
any work undertaken or to be undertaken by them (whether or not it involves an
appearance in court) on any basis or by any method they think fit, provided that
such basis or method is permitted by law and a barrister is entitled to take into
account when marking or nominating such fee, all features of the instructions
which bear upon the commitment which is thereby undertaken or has been
undertaken by them including:
-the complexity of the issue or subject matter;
-the length and venue of any trial or hearing;
-The amount or value of any claim or subject matter in issue provided, however,
that the level of fee should not be calculated solely on the basis of the value of
the case or on a basis directly proportionate to the value of the case;
-the time within which the work is or was required to be undertaken;
-any other special feature of the case.”88
2.107 From a review of the criteria used for determining the reasonableness and
appropriateness of legal costs in the jurisdictions surveyed above, there are a
number of recurring factors. These include the following:
87
Code of the Conduct for the Bar of Ireland, adopted March 13, 2006.
88
Code of the Conduct for the Bar of Ireland, adopted March 13, 2006, Rule 12.1(a).
46
The time spent on the matter;
The labour and effort involved;
The skill, responsibility, and specialised knowledge involved;
The complexity, novelty or difficulty of the issues;
The value of the claim or subject matter;
The importance of the case to the client or in the public interest;
The quality of the work done;
The place and circumstances in which the work is done;
Any time limitations imposed on the lawyers by the client or the
circumstances;
The seniority, experience, reputation and ability of the lawyer.
2.108 The Bar Council considers that each of these factors is relevant and important
in assessing the appropriate level of legal costs. The Bar Council is concerned
that, if all of the relevant considerations are not taken into account in setting
guidelines for recovery of legal costs, the guidelines will neither accurately
reflect the appropriate level of legal costs nor allow accommodation of the
various matters which can affect the cost of legal proceedings.
2.109 The Bar Council considers that the recommendation at paragraph 2.3 of the
Working Group’s Report that the proposed guidelines should encompass such
elements as the appropriate hours expended, the complexity of the proceedings
and the level of the court, is too limited. While it is clear that this list is not
exhaustive, the Bar Council is aware of no reason for curtailing the list of
factors that have hitherto been taken into account in Ireland, as well as in
many other comparable jurisdictions, in determining the appropriate level of
legal costs.
47
Submission 11
2.110 It is the Bar Council’s submission to the Implementation Advisory Group that
the factors that should be taken into account in setting (or applying)
guidelines for recoverable legal costs should encompass, or at least allow
accommodation of, the following:
The time spent on the matter;
The labour and effort involved;
The skill, responsibility, and specialised knowledge involved;
The complexity, novelty or difficulty of the issues;
The value of the claim or subject matter;
The importance of the case to the client or in the public interest;
The quality of the work done;
The place and circumstances in which the work is done;
Any time limitations imposed on the lawyers by the client or the
circumstances; and
The seniority, experience, reputation and ability of the lawyer.
(v) Updating guidelines
2.111 The Working Group recommends that the proposed guidelines should be
regularly updated.89 The Bar Council considers this recommendation to be of
the utmost importance. The failure to update the terms of Appendix W was
identified by the Working Group as having “serious adverse consequences…
on the system of costs recovery”.90 In other jurisdictions, such as New South
Wales and New Zealand, a failure to adequately amend and update scales of
costs was similarly the subject of significant criticism. The Bar Council is
mindful of the fact that the amendment of any guidelines regarding costs is
89
Report of the Legal Costs Working Group (November 2005) at para 7.17.
90
Report of the Legal Costs Working Group (November 2005) at para 2.20.
48
necessary not just to ensure that the amounts are in keeping with market rates,
but also to ensure that the guidelines are not treated as base costs, thereby
encouraging higher costs than those which would otherwise be levied. The
latter danger was identified and materialised, to some extent, in New South
Wales, prior to the deregulation of costs in that jurisdiction. On the other
hand, lawyers in New Zealand have been heavily critical of the level of
recoverable costs, which has been described as “derisory” in some instances.
2.112 The Bar Council submits that the timeframes within which the guidelines
should be updated must be flexible to take account of changes in rules,
procedures and law, as well as economic factors, which may affect the
appropriate level of costs’ guidelines. The Bar Council notes that in New
Zealand and in England, the scales of costs, and the cost guidance,
respectively, are regularly updated and amended. The Bar Council also notes
that any amendments to the suggested or scaled costs are made in consultation
with, and on the basis of information received from, the legal professions.
2.113 The Bar Council submits that the Implementation Advisory Group should
ensure that the proposed guidelines are updated periodically, and that there is
adequate flexibility and resources to ensure that the guidelines may be
changed more regularly, to reflect any changes that affect the level of legal
costs, such as changes in court rules, procedures, laws or other factors.
Submission 12
2.114 The Bar Council submits that any amendment to the proposed guidelines must
be preceded by a process of consultation with the Council of the Bar of
Ireland and the Law Society of Ireland and must involve the input and
participation of both the Bar and the Law Society.
49
CHAPTER THREE LITIGATION REFORM
A. Delay
3.01 The Working Group has identified delays in litigation as one of the factors that
increases the scale of legal costs in Ireland. The Working Group’s Report
therefore contains a number of recommendations that are designed to reduce
such delay. These include the following recommendations:
The more vigilant enforcement of existing time limits;91
Imposition of sanctions for delay in proceedings;92
Restraining the level of adjournments;93
Increasing the use of peremptory adjournments;
The introduction of a rule of interpretation which requires courts “to allot to
individual cases an appropriate share of the court’s resources, while
considering the needs of other cases… the rights of access of individual
litigants to justice must, in reality, be reconciled with the rights of access of
parties to other cases;”94
91
Report of the Legal Costs Working Group (November 2005) at para 8.4 (the Working Group
commented that, “time limits in practice are often ignored as there is not any realistic likelihood that
the delaying party will suffer any penalty for his or her delay.”)
92
Report of the Legal Costs Working Group (November 2005) at paras 8.10 (referring to Order 33,
Rule 33 and noting that, “this provision does not appear to have been relied upon in recent times, if in
fact it ever has been.”) and 8.12 and 8.40 (regarding costs penalties on solicitors).
93
Report of the Legal Costs Working Group (November 2005) at para 8.25.
94
Report of the Legal Costs Working Group (November 2005) at para 8.32.
50
The introduction of rules of court facilitating the supervision of the pace of
litigation and sanctioning delay;95
Encouraging more just, expeditious, and less costly, disposal of cases;96 and
Increased use of “unless orders” in respect of court directions.97
3.02 The Bar Council has no specific submissions to make in relation to these
recommendations. The Bar Council, in its submissions to the Working Group,
emphasised certain inefficiencies that exist in the procedures currently
prevailing before the Irish courts and welcomes any amendments which may
make the system more efficient and more expeditious.
3.03 In this regard, the only reservation which the Bar Council wishes to express to
the Implementation Advisory Group is that certain procedural changes will
increase the steps required, the time pressures and therefore, the costs of
litigation. By way of example, as noted in the submissions to the Working
Group, while the Rules of the Commercial Court do reduce delay in
proceedings, they also place very considerable pressures on barristers and
frequently inhibit counsel’s ability to undertake and discharge other legal
work. The Bar Council submits that the Implementation Advisory Group
should be mindful of the practical, and cost, implications of imposing extra
burdens and compliance requirements on practitioners.
Submission 13
3.04 The Bar Council welcomes any recommendations that have the objective of
making court systems and procedures more efficient and expeditious.
However, the Bar Council also submits that the Implementation Advisory
Group should be mindful of the practical, and cost, implications of imposing
extra burdens and compliance requirements on practitioners.
95
Report of the Legal Costs Working Group (November 2005) at para 8.33.
96
Report of the Legal Costs Working Group (November 2005) at para 8.22.
97
Report of the Legal Costs Working Group (November 2005) at para 8.34.
51
B. Pre-trial costs
3.05 The Working Group examined the rules and practice governing the award of
costs for interlocutory applications. In this regard, the Group noted that courts
rarely fix the costs of interlocutory applications and that, “a party who have
succeeded on a pre-trial application necessitated by a default on the part of the
other party may ultimately fail to recover the costs of that application in the
event that the defaulting party succeeds on the main issue at trial.”98
3.06 The Working Group has therefore recommended that the procedure in the
Commercial Court for determining the liability for the costs of pre-trial
applications should be extended to all proceedings. The Working Group
recommends that the costs of pre-trial motions should be awarded to the
successful party.99 The Bar Council notes that this recommendation is
consistent with the following submission of the Bar Council to the Working
Group: “costs orders at interlocutory or motion stage should not be reserved
but should be awarded and payable by the party in default”.100
C. Estimates of costs
3.07 The Working Group recommends that the court should be empowered to
require parties to produce and exchange estimates of costs incurred at any
stage of the proceedings.101 A similar requirement has been introduced in
England, but only in relation to cases on the “multi-track”. The Bar Council
submits that a careful analysis of comparable jurisdictions and the effect of the
requirement to produce costs’ estimates in such jurisdictions, should be
conducted, before introducing such a requirement in this jurisdiction.
98
Report of the Legal Costs Working Group (November 2005) at para 8.17.
99
Report of the Legal Costs Working Group (November 2005) at para 8.37
100
Council of the Bar of Ireland, Submissions to the Legal Costs Working Group (February 2005) at
para 13.1(w).
101
Report of the Legal Costs Working Group (November 2005) at para 8.41.
52
D. Jurisdictional limits
3.08 The Working Group recommends that “the jurisdictional limits of the courts
be progressively increased and adjusted regularly thereafter, save for personal
injuries cases where the status quo should be maintained for a further period
until a more complete understanding of the dynamics of the Government’s
insurance reform programme is available.”102 The Working Group also
recommends that “consideration should be given to a substantial increase in
the jurisdictional limit of the Small Claims Procedure and that the range of
cases dealt with by means of this procedure should be expanded.”103
E. Mediation
3.09 The Working Group’s Report recommends that the use of mediation should be
encouraged but that the “capacity to enforce mediation may be open to
doubt.”104 The Working Group noted that, “The question of how mediation
can be introduced more widely into the Irish system deserves thought and
discussion, especially in the courts of lower jurisdiction given the tendency of
costs to become disproportionate there.”105
3.10 This position is entirely consistent with the submission made by the Bar
Council to the Working Group that “mediation is probably only appropriate
where both of the parties are receptive to it. Enforced mediation will simply
add another layer of costs to the legal process. Enforced mediation would also
be contrary to the spirit and underlying rationale of mediation.”106
F. Civil legal aid
3.11 The Working Group notes in its Report that a departure from the principle that
“costs follow the event” would undermine the “no foal no fee” system and
102
Report of the Legal Costs Working Group (November 2005) at para 5.41.
103
Report of the Legal Costs Working Group (November 2005) at para 5.43.
104
Report of the Legal Costs Working Group (November 2005) at para 5.35.
105
Report of the Legal Costs Working Group (November 2005) at para 5.37.
106
Council of the Bar of Ireland, Submissions to the Legal Costs Working Group (February 2005) at
para 13.1(u).
53
would result in “pressure for the introduction of a better resourced system of
civil legal aid.”107
3.12 The Working Group also comments,
“The Group is of the view that the Government might give further consideration
to the operation of the free legal aid system to ensure that those without
adequate means are not effectively excluded from using the civil legal system to
vindicate their rights. The Group was strongly of the view that the ‘no foal, no
fee’ system may not adequately address the need for legal services across the
spectrum of issues requiring resolution in the courts.”108
3.13 The Bar Council, in its submissions to the Working Group, suggested that,
“the Legal Aid System should be expanded properly and comprehensively. As
an interim measure pending that development, the Attorney General’s Scheme
should be revamped and should be properly resourced. While there have been
improvements in terms of the backlog and size of barristers’ fees, it remains a
fact that fees recoverable under the Attorney General Scheme are inadequate
and take too long to arrive; the Legal Aid System should be expanded properly
and comprehensively. As an interim measure pending that development, the
Attorney General’s Scheme should be revamped and should be properly
resourced.”109
Submission 14
3.14 The Bar Council welcomes the Working Group’s call for an improved system
of civil legal aid across the spectrum of issues which require resolution in the
courts.
107
Report of the Legal Costs Working Group (November 2005) at para 5.16.
108
Report of the Legal Costs Working Group (November 2005) at para 5.51.
109
Council of the Bar of Ireland, Submissions to the Legal Costs Working Group (February 2005) at
para 13.1(x).
54
G. Court fees
3.15 The Working Group considered the issue of court fees and the possibility of
charging for court time.110 In this regard, the Bar Council wishes to draw the
attention of the Implementation Advisory Group to the importance of the
constitutional right of access to justice and submits that any system of fees that
proposes to impede this right must be very carefully and thoroughly
considered. The Bar Council would welcome the opportunity to make
submissions in the event of the formulation of any proposal to charge litigants
for court time or to introduce similar levels of court fees.
H. Court reform
3.16 The Bar Council considers that there are a number of inefficiencies in the
present court system. The Bar Council wishes to repeat and emphasise the
following submissions, which are designed to enhance expedition and
efficiency in the court system. The Bar Council is of the view that such
changes are necessary before any predictable and fair system of legal costs can
be devised.
“(a) in the first place, it is clearly essential that additional judges
should be appointed. The State of Ontario in Canada has a
population similar to Ireland. It has a similar legal system (a
common law system). However, in that State, there are 64
High Court judges. That is approximately double the number
of High Court judges in Ireland. The Bar Council believes that
the number of High Court judges should be doubled. An
increase in the number of judges is the only way in which
wasted costs of the type discussed above can be eradicated.
There need to be enough judges available to hear cases;
(b) the Bar Council makes a similar recommendation in relation to
Circuit Court judges. There are significant delays in country
circuits. In country areas, circuit judges often have to sit very
110
Report of the Legal Costs Working Group (November 2005) at para 5.52.
55
late at night to get through their lists. In such circumstances,
judges are understandably driven to urging parties and their
counsel to confine the evidence as much as possible. However,
this can lead to a perception by clients that they have not got a
full and fair hearing. In order to provide a fully comprehensive
Circuit Court system, the Bar Council believes that the number
of Circuit judges should be doubled;
(c) the listing system needs to be substantially overhauled. There
is no reason why the allocation of dates should require the
attendance of large numbers of solicitor and counsel or why it
should occupy so much court time. The listing of cases could
surely be undertaken in the relevant court offices;
(d) furthermore, not more than one case should be listed before any
judge for hearing on any day (unless it is known in advance
that the cases are sufficiently short to enable all cases listed
before a practitioner judge can be dealt with by that judge).
However, this system would only work in the even that there
are sufficient numbers of judges to deal with the number of
cases requiring hearings. That is why it is so essential to
appoint a significant number of additional judges.”111
Submission 15
3.17 The Bar Council submits to the Implementation Advisory Group that certain
changes to the manner in which judicial resources are allocated and cases are
handled and listed before the courts, are essential before any predictability of
costs can be guaranteed and before a comprehensive and workable system of
guidelines for costs can be introduced.
111
Council of the Bar of Ireland, Submissions to the Legal Costs Working Group (February 2005) at
para 8.9.
56
CHAPTER FOUR INFORMATION
4.01 The Working Group’s Report emphasises the importance of ensuring that
clients get complete and up-to-date information regarding the cost
implications of their cases.112 The Bar Council concurs entirely with this
objective.
4.02 The Working Group makes detailed recommendations for the introduction of a
revised and expanded client engagement letter, and for the imposition of
effective sanctions for failing to furnish such a letter.113 The responsibility for
furnishing the proposed client engagement letter, as well as the letter currently
required by section 68 of the Solicitors’ (Amendment) Act 1994, lies primarily
on the client’s solicitor.
4.03 With regard to barristers, the Working Group did state that it welcomed the
fact that, “increasingly, solicitors ‘shop around’ in relation to engaging
barristers on behalf of their clients. The Group welcomes this development
and sees merit in solicitors obtaining quotations, where appropriate, from
barristers and other professionals before engaging them.”114
4.04 This recommendation is consistent with the Bar Council’s submissions to the
Working Group, in which it stated, “before retaining counsel, clients and
solicitors should be encouraged to approach a number of barristers to provide
a quotation before deciding which barrister to retain for any particular
purpose.”115
4.05 The Bar Council also refers to Rule 12.6 of the Code of Conduct for the Bar of
Ireland.
112
Report of the Legal Costs Working Group (November 2005) at paras 6.11 – 6.15.
113
Report of the Legal Costs Working Group (November 2005) at para 6.11.
114
Report of the Legal Costs Working Group (November 2005) at para 5.33.
57
“On the taking of instructions to provide legal services, or as soon as practicable
thereafter, a barrister shall on request, provide to an instructing solicitor, or the client
in the case of access under the Direct Professional Access Scheme, with particulars in
writing confirming:-
(a) the actual charges, or
(b) where the provision of particulars of the actual charges is not in the
circumstances possible or practicable, an estimate (as near as may be)
of the charges, or
(c) where the provision of particulars of the actual charges or an estimate
of such charges is not in the circumstances possible or practicable, the
basis on which the charges are to be made.”116
4.06 The Bar Council notes that litigation is an area of practice in which it is often
difficult to predict costs with accuracy. There are many variables, which can
affect the conduct of the litigation, and the work, time and effort required.
The Competition Authority acknowledged this fact in its “Study of
Competition in Legal Services” as follows:
“For contentious matters, it may not always be possible for a barrister to
provide an exact fixed figure in advance. However, he should be able to give
some indication of an hourly rate and the amount of work the case might
involve. A client should know what a barrister is likely to charge before a
solicitor briefs that barrister on the client’s behalf.”117
4.07 It is important to draw particular attention to the concession in the Working
Group’s Report, that in particular cases, it may not be possible for barristers to
furnish quotations. The Working Group cites, as an example of a case in
115
Council of the Bar of Ireland, Submissions to the Legal Costs Working Group (February 2005) at
para 13.1 (a).
116
Code of Conduct for the Bar of Ireland (March 13, 2006), Rule 12.12.
117
Report of the Competition Authority “Study of Competition in Legal Services”
(Preliminary report, Feb 24, 2005) at para 12.2.
58
which such quotations may not be possible, cases where a barrister with a
highly specialised expertise is required.118
4.08 The Working Group also acknowledges that, “given the nature of legal work
in the area of contentious business, some degree of uncertainty as to the
precise amount which will ultimately be chargeable in respect of a legal
dispute is inevitable.”119
4.09 A final point regarding the provision of information on legal costs, is that
barristers generally furnish any such information to solicitors, rather than to
clients directly (with the exception of clients being represented under the
Direct Professional Access Scheme). In other jurisdictions in which there is
detailed regulation of the disclosure of costs to clients, such as New South
Wales, the general approach is that the barrister must furnish the information
to the solicitors, and the solicitors may then incorporate this information into
the costs disclosure which is made to the client. The Bar Council considers
that it is important that this fact be reflected in the formulation of any costs
disclosure obligations. In particular, the Bar Council considers that it is
important that the fact that barristers do not exercise direct control over, and
responsibility for, the provision of information regarding costs to clients,
should be reflected in any rules governing the disclosure of legal costs.120
Submission 16
4.10 The Bar Council submission to the Implementation Advisory Group is that,
while the Bar Council is fully aware of the importance of the provision of
information regarding legal costs to clients, and the role of barristers in that
regard, the formulation of any rules governing such information should reflect
the fact that it is often difficult for a barrister to provide an exact estimate of
legal costs and that such information will generally be furnished to a solicitor,
rather than to the client directly.
118
Report of the Legal Costs Working Group (November 2005) at para 5.33.
119
Report of the Legal Costs Working Group (November 2005) at para 7.6.
120
See further Chapter Eight below, where detailed proposals regarding the disclosure of costs by
barristers are advanced.
59
CHAPTER FIVE COUNSEL FEES
5.01 The Report of the Legal Costs Working Group contains certain specific
recommendations regarding counsel’s fees. These recommendations may be
summarised as follows. First, the Working Group recommends that there is no
justification for a rule that a junior counsel should receive two thirds of the fee
that is paid to a senior counsel. Secondly, the Working Group recommends
that the number of counsel retained should be flexible and that there should be
no requirement to retain both junior and senior counsel for cases in the High
Court.
5.02 Thirdly, the Working Group recommends that brief fees should be broken
down into more detailed components in accordance with the proposed
guidelines. Fourthly, the Working Group recommends that barristers should
only be remunerated for work actually and appropriately done. Finally, the
Working Group makes certain recommendations for the formulation of
guidelines and the factors which should be taken into account, which do not
include the grade or seniority of the legal practitioner. The latter
recommendations were addressed in Chapter Two of these submissions above.
A. Proportion of costs between junior and senior counsel
5.03 The Working Group states in its Report that “it is established practice that
Junior Counsel will, in the vast majority of cases, charge two-thirds of the fee
marked by Senior Counsel on a case.”121 The Working Group further states
that, “No justifiable rationale for this practice appears to exist”122 and that it is
“unacceptable and unfair given its arbitrary nature.”123
121
Report of the Legal Costs Working Group (November 2005) at para 3.19.
122
Report of the Legal Costs Working Group (Novemeber 2005) at para 3.19.
123
Report of the Legal Costs Working Group (Novemeber 2005) at para 2.7.
60
5.04 The Working Group notes that, “its recommendations for a system of
recoverable cost guidelines on the basis of work done will address the cost
implications arising from the present grading structure. For example,… in
circumstances where the Junior Counsel carries out most of the work in a case
where a Senior is also engaged, the Junior could recover higher fees than the
Senior.”124
5.05 The Bar Council, in its previous submissions to the Working Group, set out in
detail the work of a barrister in different areas of practice and the tasks,
responsibilities and functions for which a client may incur barristers’ fees.
The Bar Council wholly agrees with the recommendations of the Working
Group that barristers should be remunerated for all work done. In this regard,
the Bar Council refers to Rule 12.1(a) of the Code of Conduct for the Bar of
Ireland, which provides as follows:
“Barristers’ fees are based upon work done. Barristers are entitled to charge for
any work undertaken or to be undertaken by them (whether or not it involves an
appearance in court) on any basis or by any method they think fit, provided that
such basis or method is permitted by law and a barrister is entitled to take into
account when marking or nominating such fee, all features of the instructions
which bear upon the commitment which is thereby undertaken or has been
undertaken by them including:
-the complexity of the issue or subject matter;
-the length and venue of any trial or hearing;
-The amount or value of any claim or subject matter in issue provided, however,
that the level of fee should not be calculated solely on the basis of the value of
the case or on a basis directly proportionate to the value of the case;
-the time within which the work is or was required to be undertaken;
-any other special feature of the case.”125
124
Report of the Legal Costs Working Group (November 2005) at para 5.29.
125
Code of the Conduct for the Bar of Ireland, adopted March 13, 2006, Rule 12.1(a).
61
B. Number of counsel
5.06 The Working Group states in its Report that “a Senior Counsel does not
usually appear in a High Court case without a Junior Counsel. A client, in
engaging, through their solicitor, the services of a counsel of one level to
conduct proceedings, may in practice also be required to engage a counsel of
the other level.”126
5.07 The Working Group further expresses its concern “that practice and
precedence determine in many cases the number and type of counsel required
rather than the work required to be done.”127 Among the Working Group’s
recommendations in this regard is the following: “a well experienced and
expert Junior might be employed for a full High Court action and recover the
fee that a Senior would traditionally have expected.”128
5.08 The Bar Council refers to Rule 11.3 of the Code of Conduct for the Bar of
Ireland, which provides,
“Clients are never required to retain the services of a Senior Counsel. It is for the
instructing solicitor to decide whether it is necessary or desirable in the interests of his
or her client to brief Senior Counsel and to decide the number of Counsel to be
retained in a case.”129
Submission 17
5.09 The Bar Council submission to the Implementation Advisory Group is that
there is never a requirement that a client must retain the services of a senior
counsel. It is a matter for an instructing solicitor, and the client, to determine
whether to instruct a senior counsel in a matter, and the number of counsel to
instruct in any matter.
126
Report of the Legal Costs Working Group (November 2005) at para 5.28.
127
Report of the Legal Costs Working Group (November 2005) at para 5.31.
128
Report of the Legal Costs Working Group (November 2005) at para 5.29.
129
Code of the Conduct for the Bar of Ireland, adopted March 13, 2006, Rule 11.3.
62
C. Brief fees
5.10 The Working Group recommends that counsel’s brief fee “be abandoned and
be replaced by the guidelines on recoverable costs, deconstructing the fee into
a set of charges for work actually and appropriately done in respect of steps
within a case’s progression.”130
5.11 The Bar Council refers to the inconsistencies and ambiguities in the
description and effect of the proposed “guidelines”, which were considered in
detail in Chapter Two of these Submissions. The recommendation for the
replacement of a brief fee with “guidelines… deconstructing the fee into a set
of charges for work actually and appropriately done in respect of steps within
a case’s progression” is a further variation on the formulation of the proposed
guidelines.
5.12 The Bar Council refers to alternative formulations of the proposed guidelines
in the Working Group’s Report based on an objective quantification of the
time required, such as the proposal that the guidelines would “set ranges for
the maximum number of hours which may be normally recoverable as party
and party costs for particular types of proceedings or steps within
proceedings.”131
5.13 The Bar Council also refers to the analysis conducted in Chapter Two of these
Submissions of the shortcomings and difficulties of any time-based billing
system, particularly in the context of the practice of a barrister. The Bar
Council further refers to the authorities cited in Chapter Two which favour so-
called “event based billing” rather than “time-based billing”.
5.14 In its submissions to the Working Group, the Bar Council described a
barrister’s brief fee as follows: “Although a brief fee is charged as of the first
day of the hearing, it is not designed to remunerate the barristers solely for the
work done by them on that day. It is more particularly designed to remunerate
130
Report of the Legal Costs Working Group (November 2005) at para 5.32.
131
Report of the Legal Costs Working Group (November 2005) at para 7.17.
63
barristers for all of their preparation for the hearing (including their legal
research, their review of all of the papers, the preparation of their strategy for
the examination of witnesses and cross-examination of witnesses, and other
work done by the in the preceding months or years in preparation for the
trial.)”132
5.15 A brief fee may therefore be regarded as an example of “event-based” billing,
which is measured according to the work done, rather than strictly according
to the time spent.
5.16 In England, the introduction of guides for legal fees, included guideline
figures for the summary assessment of brief fees for “fast track” cases in the
Court of Appeal. The guides issued by the Supreme Court Costs Office
further allowed a degree of flexibility in relation to the guides furnished, to
accommodate the relative experience and expertise of the particular barrister.
5.17 The Bar Council submission to the Implementation Advisory Group is that
brief fees are a means of charging legal fees for work done in preparation for a
trial and at the first day of hearing, which encompass the various factors that
are relevant to determining a reasonable fee, such as the time spent, the
complexity, novelty or difficulty of the matter, the expertise of the
practitioner, the time within which the work was required to be done, among
the other factors listed at Chapter Two above.
5.18 The Bar Council submits that a barrister’s brief fee is not the same as a
solicitor’s instruction fee and that brief fees have not been subject to the
difficulties and criticisms to which instructions fees have been subject. A
brief fee is a form of “event-based” billing and is a more efficient and
beneficial means of quantifying a barrister’s work in preparation for, and at
the first day of hearing of, a trial, than a system based on time assessment.
132
Council of the Bar of Ireland, Submissions to the Legal Costs Working Group (February 2005) at
para 2.6.
64
Submission 18
5.19 The Bar Council submits that, in the interests of transparency, consideration
could be given to including a requirement in practice ruling to be issued by
the Professional Practices Committee of the Bar of Ireland that, in marking a
brief fee, a barrister should identify and enumerate the work undertaken in
preparation for the hearing of the matter, such as the legal research
conducted, the procedural matters considered, all papers that were reviewed,
discovery and background material that were examined and considered, the
preparation of strategies, the planning of witness examinations, the outlining
and drafting of legal submissions and factual background documents, and
other such work done by the in the preceding months or years in preparation
for the trial.
D. Work actually done
5.19 The Working Group recommends that legal costs should only be incurred for
work actually and appropriately done. This is consistent with the Code of
Conduct for the Bar of Ireland, which provides in Rule 12.1(a) that
“Barristers’ fees are based upon work done.”
5.20 There is one qualification to this, which is reflected in Rule 12.2 of the Code
of Conduct for the Bar of Ireland as follows:
“In cases where barristers have actually been briefed for the hearing then such
barrister shall, in the event of a settlement resulting from negotiations, be
entitled to charge a brief fee.”
5.21 This rule reflects the fact that, if a barrister is briefed for the hearing of a
matter, he will typically undertake all necessary research, analysis and other
preparation, before any settlement is reached. In most cases, the barrister will
therefore have done most of the work to which the brief fee relates, before
settlement. In these circumstances, it is entirely appropriate and just that legal
fees be charged for the research and other preparatory work which a barrister
has actually and appropriately undertaken in anticipation of the hearing.
65
5.22 Upon being briefed for the hearing of a matter, a barrister will moreover set
aside the time to attend to the hearing of the matter, turning down alternative
work, if necessary. It is therefore appropriate that a barrister be remunerated
for this time.
5.23 Cancellation fees are a feature of many walks of life and cancellation fees for
barristers have been considered in other jurisdictions. In New South Wales,
the Legal Fees Review Panel stated that, “Some barristers charge a
cancellation fee when a matter settles prior to or during the trial in which the
barrister is briefed to appear.”133 The Panel did not recommend the abolition
of such fees, but rather recommended that,
“Guidelines whereby the interests of barristers, who have perhaps refused other
briefs in the reasonable expectation that they will be occupied for the entire
period set down for hearing, are balanced against the interests of clients, who
reasonably expect to pay for work performed, could be developed.”134
Submission 19
5.24 The Bar Council submission to the Advisory Implementation Group is that,
when a barrister has been briefed and prepared for the hearing of a matter
which settles before the commencement of the hearing, the barrister is entitled
to remuneration for all of the preparatory work that was actually and
appropriately done and for the time which was dedicated to represent the
client at that hearing.
133
New South Wales’ Legal Fees Review Panel, “Lawyers Costs and Time Billing” (November 2004)
at para 2.37.
134
New South Wales’ Legal Fees Review Panel, “Lawyers Costs and Time Billing” (November 2004)
at para 2.37.
66
CHAPTER SIX ASSESSMENT OF COSTS
6.01 In its submissions to the Working Group, the Bar Council highlighted a
number of difficulties with the system of taxation of costs as it exists at
present. First, the Bar Council indicated that “the current system of taxation is
quite convoluted and often cumbersome”135. Second, the Bar Council noted
that the system of taxation can be costly and that the court fees constitute a
“very significant additional burden” on a party seeking taxation.136 Third, the
Bar Council referred to the fact that no simple procedure exists for the
resolution of disputes regarding individual items in a bill of costs.137
6.02 Fourth, the Bar Council suggested that an oral hearing is not necessary for
every case in which costs are referred to taxation. Fifth, the Bar Council drew
attention to the anomaly that an objection to the decision of a taxing master is
heard by the same taxing master. Sixth, the Bar Council criticised the fact that
there are too few taxing masters. Finally, the Bar Council noted that the
process of taxation of costs is too lengthy and time-consuming.138
6.03 The Bar Council made certain submissions to the Working Group regarding
the system of taxation of costs, including that more taxing masters should be
appointed; alternatively, that there should be a single costs assessment body;
that there should be periodic review of the rules governing taxation; that the
process of taxation should be simplified; that taxing masters should not review
their own decisions; that there should be a simplified procedure where a small
135
Council of the Bar of Ireland, Submissions to the Legal Costs Working Group (February 2005) at
para 4.5.
136
Council of the Bar of Ireland, Submissions to the Legal Costs Working Group (February 2005) at
para 4.7.
137
Council of the Bar of Ireland, Submissions to the Legal Costs Working Group (February 2005) at
para 4.7.
138
Council of the Bar of Ireland, Submissions to the Legal Costs Working Group (February 2005) at
para 4.7.
67
number of items are in dispute; and that oral hearings are not necessary in
every case.139
6.04 Working Group’s Report adopts many of these submissions. In particular, the
Working Group recommends the following:
The establishment of a legal costs assessment group;140
Assessments by way of written procedures;141
A more simple and transparent system for assessment of costs;142
Only the items in dispute should be assessed;143
Reduction of the fees associated with taxation;144 and
The appointment of an appeals adjudicator to conduct assessment appeals.145
6.05 The Working Group also notes that,
“No express set of taxation policies or guidelines exists to indicate how the
criteria mentioned earlier as governing the exercise of discretion by the Taxing
Master (e.g. complexity, skill required, importance of case to client, value of
claim, etc.) should be applied for particular types of action or application. The
absence of such guidance hampers solicitors in advising clients on the extent of
their likely exposure to costs and renders the process of predicting or settling
costs as an alternative to taxation more difficult. These disadvantages outweigh
any benefit which the current very flexible approach to exercise of judgment
may confer in an individual case.”146
139
Council of the Bar of Ireland, Submissions to the Legal Costs Working Group (February 2005) at
paras 13.1 (h), 13.1(i), 13.1(j), 13.1(k).
140
Report of the Legal Costs Working Group (November 2005) at paras 2.15 and 7.16.
141
Report of the Legal Costs Working Group (November 2005) at para 2.15 and 7.16.
142
Report of the Legal Costs Working Group (November 2005) at para 2.15.
143
Report of the Legal Costs Working Group (November 2005) at para 2.16 and 7.21 – 7.24.
144
Report of the Legal Costs Working Group (November 2005) at para 2.17 and 7.25.
145
Report of the Legal Costs Working Group (November 2005) at para 2.23.
146
Report of the Legal Costs Working Group (November 2005) at para 7.7.
68
6.06 The Bar Council welcomes the changes to the system of taxation of costs
that are recommended by the Legal Costs Working Group. However, the Bar
Council notes the dangers inherent in any attempt to render the assessment of
costs predictable. In this regard, the Bar Council refers the Implementation
Advisory Group to the following statement of the Competition Authority:
“The system of taxation has negative effects on competition. It operates as a
form of specific price regulation for certain services. It can provide a focal point
around which fees may be indirectly fixed, and so reduce fee competition.
Unless the system of awarding costs is reformed, it is not obvious that these
effects can be totally eliminated.”147
Submission 20
6.07 The Bar Council submission is that, while certainty and predictability of costs
are desirable objectives, these objectives must not be pursued at the expense
of competition, and the Implementation Advisory Group must therefore be
cautious in implementing any guidelines for the assessment of costs.
147
Competition Authority, “Study of Competition in Legal Services” (Preliminary Report, February 24,
2005) at para 12.20.
69
CHAPTER SEVEN
LEGAL COSTS REGULATORY BODY
7.01 The Working Group recommends the establishment of a “legal costs
regulatory body”, whose responsibilities will include setting and updating the
proposed guidelines. The Working Group does not indicate the composition
or structure of this “Regulatory Body”.
7.02 The Bar Council notes that similar responsibilities have been imposed on
bodies in other jurisdictions. In England, the Supreme Court Costs Office
drew up the guides for legal costs to be employed in the summary assessment
of costs.
7.03 In relation to counsel’s costs, the Costs Office noted that, “It has not been
possible to publish more specific guideline figures because of lack of
sufficient data” and that “The figures… are based upon figures supplied by the
Bar and in broad terms the figures are averages based on the information
supplied.” This indicates the importance of the involvement of the Bar in any
attempt to formulate guidance in relation to barrister’s fees.
7.04 In New Zealand, the rates that are allowed for a day’s work, for the purpose of
the scales for recoverable costs, were arrived at in consultation with the New
Zealand Law Society and the New Zealand Bar Assocation. It was intended
that the same consultation and review process would take place every year.148
7.05 In New South Wales, the possibility of introducing guidance as to fair and
reasonable costs which may be allowed in a cost assessment was considered.
The Legislation and Policy Division of the Attorney General’s office of NSW
148
See Paper by Justice Robert Fisher, “The New High Court Costs Regime” (November 9, 1999)
(New Zealand).
70
considered the costs assessment scheme and noted that there was no such
guidance.149 It was suggested that, “guidelines should be regularly published
by assessors in order to educate both parties to assessments, the profession and
the public about the fair and reasonable costs in a matter. The guidelines
would be based on the market rates which generally applied to work
performed in certain kinds of matters, and could be developed for different
geographical areas.”
7.06 The Attorney General’s Legislation and Policy Division went on to consider
the appropriate body to draw up such guidelines and concluded,
“A mechanism for setting and reviewing guideline fees could be the
appointment of a panel, consisting of both solicitor and barrister members and
lay members. Neither assessors, nor solicitors or barristers, would be bound by
the guidelines and could vary the amount allowed in any assessment, having
regard to the factors already set out in the Act, including the skills, labour and
responsibility of the practitioners; the complexity, novelty or difficulty of the
matter; the quality of the work done; the place where and circumstances in
which the work was done; and the outcome of the matter.”150
7.07 One example of such guidance may be seen in the Local Court Civil Practice
Note 1 of 2000, which contains guidelines for legal costs.151 It is of note that
these guidelines provide that the guideline amount for counsel fees is “As
disclosed, in a reasonable amount, and as reasonably incurred.” The Bar
Council particularly wishes to draw the attention of the Implementation
Advisory Group to the fact that the guidelines were drawn up jointly by the
Local Courts and by the Law Society of New South Wales.
149
New South Wales Attorney General Legislation and Policy Division, Review of the Legal
Profession Act Final Report: Costs (June 1999)
150
New South Wales Attorney General Legislation and Policy Division, Review of the Legal
Profession Act Final Report: Costs (June 1999)
151
See Local Court Civil Practice Note 1 of 2000 (“Legal Costs”)(22 May 2000) (New South Wales).
These guidelines expressly state, “Legal costs always remain at the discretion of the Court, and the
guideline figures which follow do not diminish that discretion”.
71
7.08 The Bar Council notes that other jurisdictions, which have attempted to
formulate guidelines on legal costs, have required the direct input of the legal
professions. The Bar Council submits that any attempt to fix costs guidelines
in this jurisdiction will require the involvement of the Bar of Ireland.
7.09 The Bar Council moreover notes that the diversity of areas of legal practice in
Ireland, and the differing stages, complexity and issues, relevant to legal costs,
that may arise within each, necessitates the representation on any body
regulating legal costs, of legal professionals from across the spectrum of areas
of legal practice. The Bar Council moreover is of the view that such a body
must include among its members legal professionals who are versed and
experienced in the law and practice governing legal costs in the various areas
of legal practice.
7.10 It is the submission of the Bar Council that the proposed “Legal Costs
Regulatory Body” should have a majority of legal professionals among its
members, reflecting the broad diversity of areas of legal practice, and must
rely on figures and data gathered from persons engaged in the practice of law
in order to ensure the accuracy and efficacy of the proposed guidelines.
Submission 21
7.11 The Bar Council submits that any attempt to fix costs guidelines in this
jurisdiction will require the participation of legal practitioners. It is the
submission of the Bar Council that the proposed “Legal Costs Regulatory
Body” should have a majority of legal professionals among its members,
reflecting the broad diversity of areas of legal practice, and must rely on
figures and data gathered from persons engaged in the practice of law in
order to ensure the accuracy and efficacy of the proposed guidelines. The
Legal Costs Regulatory Body should moreover include among its members
legal professionals who are versed and experienced in the law and practice
governing legal costs in the various areas of legal practice.
72
CHAPTER EIGHT PROPOSALS FOR REFORM
8.01 In this Chapter, the Bar Council advances some final suggestions for the
implementation of the Working Group’s Report. These suggestions, as well as
the submissions made above, are within the scope of the recommendations
contained in the Working Group’s Report and are in furtherance of the
Group’s stated objectives. However, in formulating these models for the
reform of legal costs, the Bar Council is also mindful of, and seeks to avoid
and overcome, the weaknesses and shortcomings identified in previous
chapters of these Submissions.
8.02 The suggestions for reform that are advanced in this Chapter are heavily
influenced by the Bar Council’s view that the provision of information
regarding legal costs to clients and prospective clients should form a central
role in any reform of the law governing legal costs. The Bar Council
considers that transparency is crucial to any successful reform of the rules and
laws governing legal costs.
8.03 The Bar Council recalls the statement by Lord Woolf in the Interim Report on
Access to Justice to the effect that, “[i]f a client knows the basis on which his
own lawyers are charging him, he is in a better position to exercise control
over the costs”.
8.04 The Bar Council also recalls the recommendation by the New Zealand Law
Commission to the effect that,
“Instead of price regulation we suggest a better response is to seek to remove
some of the existing barriers to the efficient operation of the market… By
making more information available to the public generally and to prospective
users of legal services in particular, consumers would be in a better position to
know the costs involved in taking a case to court. They could also be better
informed about the steps required in going to court and the procedure
73
involved.”152
8.05 The Bar Council wholly agrees with these statements and with the Working
Group’s recommendation that,
“the consumer, the individual litigant, should have a central role to play in
controlling costs. Empowering the litigant to have a better understanding of
what is involved in civil litigation and decision processes of a case, and to be
actively involved in this regard – particularly with regard to cost – is an
essential factor in ensuring the effective control of legal costs”.153
8.06 With the objectives of transparency and enhanced information in mind, the
Bar Council makes the following suggestions for the reform of the rules,
laws and procedures, governing legal costs in Ireland. These suggestions
are supplemental to the other submissions that are summarised in Chapter
Nine of these Submissions.
A. Disclosure of information on costs
8.07 The Working Group makes certain recommendations for the amendment of
the content and effect of the letter which solicitors are currently obliged to
furnish to clients pursuant to section 68 of the Solicitors’ (Amendment) Act
1994.154
8.08 The Bar Council considers that barristers also have an important role to play in
the provision of information on legal costs. The Bar Council therefore
proposes a model for the provision of information regarding legal costs by
barristers, which is designed to advance the Working Group’s objectives of
empowering the client. In formulating a suggested model for the imposition
of disclosure obligations on barristers, the Bar Council is mindful of the
experience of other jurisdictions.
152
New Zealand Law Commission, Report 85, March 2004, paras. 121 and 122. See further below
regarding provision of information and recommendations made by the Law Commission in that regard.
153
Report of the Legal Costs Working Group (November 2005) at para 6.1.
74
New South Wales
8.09 In New South Wales, the previous system of regulation of legal costs by
means of fixed scales was replaced by a system based primarily on disclosure
of legal costs. The disclosure requirements were originally introduced by the
Legal Profession Reform Act 1993, amending the Legal Profession Act
1987.155 This Act was amended and the disclosure requirements considerably
augmented when the Legal Profession Act 2004 came into force on the
October 1, 2005. The disclosure requirements which are now imposed on
lawyers in New South Wales include an obligation to disclose to the client the
basis on which the costs will be charged, the intervals for billing, and any
fixed costs that apply.
8.10 A lawyer in New South Wales must also provide, “an estimate of the total
legal costs if reasonably practicable or, if it is not reasonably practicable to
estimate the total legal costs, a range of estimates of the total legal costs and
an explanation of the major variables that will affect the calculation of those
costs”.156
8.11 If the matter in question is contentious, the Legal Profession Act 2004 requires
a lawyer in New South Wales to also disclose an estimate of “the range of
costs that may be recovered if the client or prospective client is successful in
the litigation, and… the range of costs the client or prospective client may be
ordered to pay if the client or prospective client is unsuccessful.”157
8.12 A further matter which must be included in the costs disclosure, is the basis of
charging, and an estimate of, the legal costs of a barrister, if the solicitor
154
Report of the Legal Costs Working Group (November 2005), Chapter Six.
155
Difficulties with, and criticisms of, the original disclosure requirements, such as widespread non-
compliance and unfettered rights to review the estimates upwards, were set out in the “Review of the
Legal Profession Act Final Report” (Legislation and Policy Division, Attorney General’s Department,
June 1999).
156
Legal Profession Act 2004, s 309(1)(c) (New South Wales).
157
Legal Profession Act 2004, s 309(1)(f) (New South Wales).
75
intends to retain the services of a barrister.158 The Bar Council notes that the
barrister is not obliged to disclose costs to the client directly, but must furnish
sufficient information to the solicitor to enable the necessary disclosure to be
made.159
8.13 The form of the disclosure which must be furnished by lawyers in New South
Wales is also governed by the Legal Profession Act 2004. Section 315
provides that the requisite disclosure must be in writing, in clear plain
language, and, if necessary, translated into a language other than English.
8.14 Section 316 of the Legal Profession Act 2004 is an important provision, which
requires that, “A law practice must notify the client in writing of any
substantial change to anything included in a disclosure under this Division as
soon as is reasonably practicable after the law practice becomes aware of that
change.” This is designed to counter the criticism that was made of the regime
in place under the Legal Profession Act 1994, pursuant to which a lawyer was
free to revise the original estimate of costs without making any additional
disclosure to the client.
8.15 There are certain exceptions to the disclosure obligations imposed on lawyers
in New South Wales. By way of example, disclosure is not necessary if the
total costs (excluding disbursements) are likely to amount to less than $750; if
the client is a law firm; if the client is a government minister acting in his
capacity as such; if the client has agreed in writing to waive the right to
disclosure; if the client will not be required to pay the legal costs (such as
where the lawyer acts on a pro bono basis), among other exceptions.160
8.16 In New South Wales, if a lawyer fails to comply with the disclosure
obligations, the client is not obliged to pay legal costs, and the lawyer may not
sue to recover such costs, until the costs have been subject to assessment, and
158
Legal Profession Act 2004, s 310(1) (New South Wales).
159
Legal Profession Act 2004, s 310(2) (New South Wales). This rule that barristers are not obliged to
make the disclosure to clients directly, but must furnish the requisite information to the instructing
solicitors, appears in other Australian jurisdictions which have enacted similar disclosure obligations.
See, for example, the Victoria Legal Profession Act 2004, s 3.4.10.
76
the lawyer must discharge the cost of that assessment process.161 In addition,
a lawyer’s failure to comply with the disclosure requirements “is capable of
being unsatisfactory professional conduct or professional misconduct”.162
8.17 The Bar Council notes that the introduction of the system of costs disclosure
in New South Wales had a significant effect on the number of complaints
arising from legal costs. The New Zealand Law Commission considered the
effect of the disclosure regime in New South Wales and commented that,
“Even if cost does not reduce, consumer understanding and satisfaction should
improve. The New South Wales Law Society reported that compulsory cost
disclosure has led to a reduction in complaints about overcharging from 304 in
1995/96, to four in 1997/98.”163
England and Wales
8.18 In England, the Practice Direction about Costs, Supplementing Parts 43 to 48
of the Civil Procedure Rules (“the Practice Direction”) refers to the duty of
solicitors to make disclosure regarding costs. Section 6 of the Practice
Direction “sets out certain steps which parties and their legal representatives
must take in order to keep the parties informed about their potential liability in
respect of costs and in order to assist the court to decide what, if any, order to
make about costs and about case management.”164 In addition, Practice Rule
15, of the Solicitor’s Practice Rules 1990, states that solicitors shall, “…give
information about costs and other, matters… in accordance with a Solicitors'
Costs Information and Client Care Code.”
8.19 The Solicitors’ Costs Information and Client Care Code 1999 contains detailed
provisions regarding the duty of solicitors’ to inform clients about costs,
including the following:-
160
Legal Profession Act 2004, s 312 (New South Wales).
161
Legal Profession Act 2004, s 317(1) (New South Wales).
162
Legal Profession Act 2004, s 317(4) (New South Wales).
163
New Zealand Law Commission, “Delivering Justice for All” (March 2004) at para 123.
164
Practice Direction, section 6.1.
77
“(a) The solicitor should give the client the best information possible about the
likely overall costs, including a breakdown between fees, VAT and
disbursements.
(b) The solicitor should explain clearly to the client the time likely to be spent in
dealing with a matter, if time spent is a factor in the calculation of the fees.
(c) Giving "the best information possible" includes:
(i) agreeing a fixed fee; or
(ii) giving a realistic estimate; or
(iii) giving a forecast within a possible range of costs; or
(iv) explaining to the client the reasons why it is not possible to fix, or give a
realistic estimate or forecast of, the overall costs, and giving instead the best
information possible about the cost of the next stage of the matter.
(d) The solicitor should, in an appropriate case, explain to a privately paying
client that the client may set an upper limit on the firm's costs for which the
client may be liable without further authority. Solicitors should not exceed an
agreed limit without first obtaining the client's consent.
…(f) The solicitor should also explain to the client how the firm's fees are
calculated except where the overall costs are fixed or clear. If the basis of
charging is an hourly charging rate, that must be made clear.
(g) The client should be told if charging rates may be increased.
(h) The solicitor should explain what reasonably foreseeable payments a client
may have to make either to the solicitor or to a third party and when those
payments are likely to be needed.
(i) The solicitor should explain to the client the arrangements for updating the
costs information as set out in paragraph 6.”165
8.20 The Solicitors’ Costs Information and Client Care Code 1999 moreover
provides that solicitors must keep the client properly informed about costs as a
matter progresses.166
165
Solicitors' Costs Information and Client Care Code 1999 at para 3.
166
Solicitors’ Costs Information and Client Care Code 1999 (as of March 9, 2004) at para 6.
78
8.21 There appears to be no specific obligations in the Code of Conduct for
barristers to furnish information regarding legal costs in England and Wales.
New Zealand
8.22 In the report on “Delivering Justice for All: A Vision for New Zealand Courts
and Tribunals,”167 the Law Commission focused on the importance of the
dissemination and provision of information regarding legal costs. The
Commission emphasised that the “more informed users of legal services are
about the costs involved, the better able they will be to make informed
decisions.”168 The Commission was heavily critical of the lack of obligations
on lawyers to make disclosure about legal costs, noting that, “Currently,
lawyers are not required to provide detailed information about how much their
services will cost.” 169
8.23 The Commission made a number of recommendations regarding the provision
of information about legal costs, including the recommendation that the Rules
of Professional Conduct be amended to place specific requirements on lawyers
in this regard. The Law Commission recommended that lawyers should be
required to provide details of the method of billing, a written estimate of costs,
or a forecast within a possible range of estimates.170 It was also recommended
that lawyers should be required to explain the possible outcomes of the matter
and their likely effect on cost and updates and interim bills as the matter
progresses.
8.24 The Law Commission did acknowledge in this regard that, “The extent to
which this would be appropriate will depend on the level of the claim – the
167
New Zealand Law Commission, Report 85, March 2004.
168
New Zealand Law Commission, Report 85, March 2004, para. 142. The Commission also
commented that if there was enhanced information available, “Even if cost does not reduce, consumer
understanding and satisfaction should improve” (para. 123).
169
New Zealand Law Commission, Report 85, March 2004, para. 124. The Commission did also note
that, “Many lawyers in New Zealand do provide good information to clients, and the Law Commission
is convinced that all lawyers could, at little extra cost and inconvenience, give more information to
potential clients” (para. 132.)
170
New Zealand Law Commission, “Delivering Justice for All” (Report 85, March 2004)
(Recommendation 16).
79
amount of time preparing bills should not be disproportionate nor increase cost
for the client.”171 The Law Commission recommended that “Failure to adhere
to these standards should lead to censure of the practitioner in question, and
should be capable of amounting to misconduct or conduct unbecoming a
barrister or solicitor.”172
8.25 In its response to the Law Commission Report, the Government of New
Zealand referred to the Lawyers and Conveyancers Bill (now the Lawyers and
Conveyancers Act 2006, having been enacted on March 20, 2006). The
Government noted that the Bill provided for a Disciplinary Tribunal to hear
charges against lawyers for matters including misconduct and unsatisfactory
conduct and that a failure to adhere to any fees disclosure requirements in
professional practice rules would be capable of amounting to unsatisfactory
conduct or misconduct.173
8.26 The Government did not agree with the recommendation that the existing
Rules of Professional Conduct should be amended to provide for specific
disclosure requirements on lawyers. The Government stated, “This would be
inconsistent with the general approach of the Bill. The Bill provides the NZLS
with the flexibility to make prescriptive disclosure rules.”174 Section 94(j) of
the Lawyers and Conveyancers Act 2006 (20 March 2006) provides that the
New Zealand Law Society must have rules that include a requirement that
practitioners provide clients in advance with information regarding the “basis
on which fees will be charged”. The Code of Professional Conduct does not
yet appear to have been amended in compliance with this requirement.
Suggestions for reform
8.27 The Bar Council submits that a rule could be introduced requiring barristers to
disclose certain information regarding costs at the time of, or as soon as
171
New Zealand Law Commission, “Delivering Justice for All” (Report 85, March 2004)
(Recommendation 16).
172
New Zealand Law Commission, “Delivering Justice for All” (Report 85, March 2004)
(Recommendation 17).
173
New Zealand Government Response to Law Commission Report 85, para 103.
80
practicable after, accepting instructions to act in a matter. The following is a
model which could be adopted for such a disclosure obligation.
(a) Disclosure to solicitor
8.28 The Bar Council suggests that the costs disclosure obligation would require a
barrister to make the necessary costs disclosure to the instructing solicitor,
who would then bear responsibility for conveying this disclosure to the
client.175 A barrister cannot be directly responsible for the communication of
the costs disclosure to the client. Once a barrister has made the requisite costs
disclosure to the solicitor, he will have discharged his responsibility in relation
to the initial disclosure of costs.
(b) Content of letter of disclosure
(i) Description of work
8.29 The letter of disclosure should contain a description of the work that is
expected to be required for the matter in question. This description should list
the steps that it is anticipated will be necessary in the litigation, such as the
type of proceedings that will need to be issued; any injunctions that may need
to be sought; such applications for discovery, interrogatories or other
interlocutory reliefs as may be necessary; and any other anticipated steps that
may be required.
8.30 Within each of these steps, the tasks that will need to be undertaken should be
set out. This will include a list of the documents that will need to be drafted,
and the court appearances, opinion work, consultations and any other tasks
that are anticipated to be necessary.
174
New Zealand Government Response to Law Commission Report 85, para 105.
175
This is in accordance with the rules considered above which have been introduced in New South
Wales and other Australian jurisdictions such as Victoria. See Legal Profession Act 2004, s 310(2)
(New South Wales) and Legal Profession Act 2004, s 3.4.10 (Victoria).
81
(ii) Estimate of costs
8.31 The letter of disclosure should include an estimate of the overall costs that can
expect to be incurred. If this is not possible, an estimate of the range within
which the costs may fall should be furnished. This estimated range of costs
should include an explanation of the factors which may affect the point within
the range at which the costs will ultimately be set. In this regard, the
disclosure can draw upon the factors referred to in Submission 11 above and
indicate which of these factors may have an impact on the ultimate costs
incurred.
(iii) Allocation of costs
8.32 The Bar Council considers that the disclosure of legal costs should include a
statement regarding the possibility of an award of costs being made at the
culmination, or in the course, of the case. This statement should endeavour to
assess the prospect of recovery of legal costs from the other party or parties to
the litigation and, conversely, the prospect of an order of costs being made
against the client. The statement regarding recovery of costs should moreover
attempt to explain the circumstances and events which may affect the
allocation of costs.
(c) Timing of letter of disclosure
8.33 The disclosure of the expected legal costs should be made before the barrister
receives instructions, or at the earliest possible opportunity thereafter. There
must be accommodation of the fact that in urgent cases, such as cases in which
interim injunction are sought, it will not be possible for the necessary
disclosure to be made before taking instructions.
8.34 Except where it is not possible to do so, due to the urgency of the
circumstances, the solicitor, and client, should have a “cooling off” period to
determine whether to accept the estimate of costs contained in the letter of
disclosure. Solicitors should moreover be encouraged to “shop around” and
82
obtain estimates from a number of barristers, a practice of which the Bar
Council has already expressed its support.176
(d) Updates
8.35 The Bar Council submits that the obligation to make costs disclosure should
include an obligation to provide updates. The Bar Council submits that, in the
interests of empowering the client and ensuring they are kept informed, and in
control, in relation to legal costs, a barrister should send a supplemental
disclosure letter in the following circumstances:
(i) If something occurs within the context of the litigation which has a
significant effect on the costs estimated in the disclosure letter, or upon the
possible allocation of costs;
(ii) If no such event occurs, a barrister should provide costs letters at periodic
intervals, such as every 12 months, to inform the client of the status of the
estimate furnished at the outset.
(e) Exceptions
8.36 A letter of disclosure should not be necessary in every circumstance. By way
of example, if the matter is of a low value (such as matters within the
jurisdiction of the District Court) or if the client agrees in writing, it should not
be necessary to provide a letter of disclosure. The Bar Council welcomes the
views of the Implementation Advisory Group regarding any additional
exceptions which may be appropriate.
(f) Effect of letter of disclosure
8.37 The Bar Council, having considered the systems that have been analysed,
recommended and introduced in other jurisdictions, suggests that a failure to
176
Bar Council Submissions to the Legal Costs Working Group (February 2005) at para 13.1(a).
83
furnish the letter of disclosure, should be relevant to the ability to recover the
costs incurred. This could be achieved by means of a provision in a practice
ruling of the Professional Practice Committee to the effect that costs which
were not disclosed in accordance with the recommendations contained in these
Submissions, should not be recoverable, unless the costs were assessed to have
been reasonable by a costs assessor, court or taxing master, as appropriate.
8.38 This sanction should not however apply, if the barrister can demonstrate that
he did make the requisite disclosure to the solicitor and the solicitor failed to
convey the information to the client. In addition, a failure to make the
requisite disclosure may be taken into account in the taxation (or assessment,
as appropriate) of costs.
(g) Professional Practices Committee
8.39 The Bar Council is very conscious of the fact that any rules requiring
disclosure of costs information should be easy to understand, apply and
enforce. The experience of other jurisdictions (such as that of New South
Wales before the introduction of the Legal Profession Act 2004), demonstrate
that it is important that obligations of disclosure should not be overly complex
and should be readily capable of reform.
8.40 In accordance with the approach proposed in New Zealand and that which is
in place in England, the Bar Council proposes that rules for the disclosure of
information on legal costs should be in included in a practice ruling to be
issued by the Professional Practices Committee of the Bar of Ireland. This
would be mandatory and binding upon every barrister, in accordance with the
Code of Conduct for the Bar of Ireland. In this regard, the Bar Council notes
that in New South Wales where the rules governing disclosure were enacted in
legislation, it became apparent that the rules required amendment and it was
necessary to amend the legislation accordingly. The Bar Council therefore
submits that rules governing the obligation to make disclosure of legal costs
should be contained in a practice ruling to be issued by the Professional
84
Practices Committee of the Bar of Ireland and, if amendments prove necessary
to ensure the efficacy of the disclosure system, this can be achieved by
amendment of such rulings, rather than necessitating the enactment of
amending legislation.
B. Costs Agreements
8.41 The Bar Council notes that the Working Group does not purport to limit the
right of clients and their legal representatives to form agreements regarding
legal costs. The Code of Conduct for the Bar of Ireland provides that, “In all
cases the number of barristers to be briefed and the fees to be charged by each
such barrister shall be a matter for agreement between each such barrister and
the instructing solicitor.”177 According to section 4 of the Attorneys’ and
Solicitors’ Act 1870, solicitors can enter costs agreements with their clients in
contentious matters.
8.42 The Bar Council considers that the formation of costs agreements at the time
of, or shortly after, the acceptance of instructions to act in a matter, should be
encouraged. The view of the Bar Council is that costs agreements advance the
objectives of empowering the client, and favour transparency and
predictability in relation to legal costs, objectives which are advocated
strongly by the Working Group.
8.43 The Bar Council notes that in jurisdictions in which disclosure of costs is
obligatory, the costs disclosure can also form the basis for cost agreements.
By way of example, in Victoria, the document containing the prescribed
information on costs will often also constitute an agreement as to costs. The
Law Society of Victoria has drafted a document entitled “Disclosure of Legal
Costs and Costs Agreement, between a Barrister and Solicitor”, which may
form a precedent for use by practitioners.
177
Code of Conduct for the Bar of Ireland (March 13, 2006), Rule 12.3.
85
8.44 The effect of this approach is that the disclosure of costs to a solicitor,
followed by acceptance by the solicitor and the client, in writing or by
conduct, (such as the furnishing of instructions to act in the matter) of that
disclosure, may be subsequently relied upon by the barrister and solicitor as a
costs agreement.
8.45 The Bar Council considers that the formation of agreements regarding costs at
the outset is a practice that should be encouraged. The Bar Council therefore
advances a draft document which may be used by barristers and solicitors to
fulfil the dual function of providing information on legal costs and constituting
an agreement as to legal costs. This document is attached to this Chapter as
Appendix A.
8.46 The Bar Council proposes that, where such an agreement is formed, it should
govern the costs between the parties and should not be displaced unless the
agreement is challenged by the client and a court or legal costs assessor (or
taxing master, as the case may be) determine the agreement to be unfair and
unreasonable.178
C. “Brief fee”
8.47 The Bar Council repeats the Submissions made in Chapter Five and, in
particular, the following submission at paragraph 5.19 above:-
“The Bar Council submits that, in the interests of transparency, a rule could be
included in a practice ruling to be issued by the Professional Practices
Committee of the Bar of Ireland requiring that, in marking a brief fee, a barrister
should identify and enumerate the work undertaken in preparation for the
hearing of the matter, such as the legal research conducted, the procedural
matters considered, all papers that were reviewed, discovery and background
material that were examined and considered, the preparation of strategies, the
86
planning of witness examinations, the outlining and drafting of legal
submissions and factual background documents, and other such work done by
the barrister in the preceding months or years in preparation for the trial.”
8.48 The Bar Council moreover submits that use of the term “brief fee” which
appears to have been misleadingly associated with the “instructions fee”
charged by solicitors, should be discontinued. The Bar Council considers that
it may be appropriate to refer to the work conducted in preparation for, and in
the first day of, the hearing of a matter could be appropriately described as a
“case fee”.
D. Fee notes
8.49 The Bar Council submits that it is appropriate, and in the interests of
transparency, that a fee note which a barrister sends to a solicitor should
include a description of the work done, and the costs associated with such
work.
8.50 The Bar Council is mindful of the Working Group’s concern that the “lumping
together” that occurs in relation to instructions fees “seriously inhibits
transparency and openness”.179 The Bar Council considers that it may be
appropriate to include a requirement in a practice ruling to be issued by the
Professional Practices Committee of the Bar of Ireland to the effect that the
fee note should include a description of the work done and tasks undertaken
and the fees charged for such work and tasks.
8.51 As noted at Submission 11 above, the Bar Council considers that there are a
number of factors that should be taken into account in setting any guidelines
regarding legal costs and in any assessment of legal costs. The Bar Council
submits that it is equally appropriate that barristers should take these factors
into account in determining the level of fees to charge in an individual case.
178
See, as an example of a similar approach, section 328(1) of the Legal Profession Act 2004 (New
South Wales, which provides that, “On application by a client, a costs assessor may order that a costs
agreement be set aside if satisfied that the agreement is not fair or reasonable.”
179
Report of the Legal Costs Working Group (November 2005) at para 2.4.
87
8.52 In determining the reasonable fee to charge in an individual case, a barrister
should therefore take account of the following factors:-
The time spent on the matter;
The labour and effort involved;
The skill, responsibility, and specialised knowledge involved;
The complexity, novelty or difficulty of the issues;
The value of the claim or subject matter;
The importance of the case to the client or in the public interest;
The quality of the work done;
The place and circumstances in which the work is done;
Any time limitations imposed on the lawyers by the client or the
circumstances; and
The seniority, experience, reputation and ability of the lawyer.
8.53 The Bar Council further submits that the fee notes issued by a barrister should
mirror the factors set out in the disclosure that will be required to be issued at
the time of, or as soon as practicable after, accepting instructions to act in a
matter. It will be necessary for the fee note to set out the factors and
considerations which caused a deviation, if any, from the fees estimated in
such fee disclosure.
E. Guidelines
8.54 The Bar Council repeats its concerns and misgivings regarding the
“guidelines” proposed in the Working Group’s Report, and the inconsistencies
and ambiguities in the formulation of those “guidelines” in the Report.180
8.55 The Bar Council is concerned that, until the reform of the litigation system
recommended by the Working Group has been given effect to, and the
changes and developments sought in Chapter 8 and elsewhere in the Report
have taken place, it is not feasible to assess the costs of litigation on an
88
objective basis. The Bar Council recalls the recommendation at paragraph
2.11 of the Working Group’s Report that,
“the Government should ensure that the level of judicial resources required
to carry out the work of each bench effectively and efficiently is provided.
However, the issue of resources cannot be separated from other relevant
factors impinging on judicial effectiveness such as organisation of
districts/circuits, management of judicial resources and working practices.”
8.56 The Bar Council considers that, while it is true that the issue of resources
cannot be separated from other factors which affect judicial effectiveness, it is
absolutely undeniable that these matters, as well as the overall problems with
delay identified elsewhere in the Working Group’s Report, cannot be
separated from the legal costs which are incurred in litigating within this
judicial system.
8.57 The Bar Council is moreover conscious of the fact that, when other
jurisdictions have introduced elaborate rules governing costs, they have done
so as part of a protracted and complex process of review of overall access to
justice. By way of example, the Woolf Reports181 were the starting points for
the reform process which is still ongoing in England and Wales and the reform
of the law governing the legal profession has been ongoing in New South
Wales since 1987, necessitating numerous legislative amendments.182
8.58 While Ireland can take guidance from other jurisdictions, it must be firmly
borne in mind that these jurisdictions went through extensive and protracted
processes of review of the overall legal landscape. The reform of legal costs
was therefore largely conducted against the background of more extensive
procedural and structural changes within the court systems.
180
See Submissions 1 to 20, as summarised in Chapter Eight of these Submissions.
181
The Interim Report on Access to Justice (June 1995) and the Final Report on Access to Justice (July
1996).
182
See, for example, the Legal Profession Act 1987; the Legal Profession Reform Act 1993; the Legal
Profession Act 2004.
89
8.59 It must moreover be borne in mind that, if the proposed “guidelines” are to
have an effect similar to fixed scales of costs, a concern addressed in Chapter
Two of these Submissions, the experience of other jurisdictions which have
adopted this approach has been mixed, with some reversing the approach
entirely and others limiting the scope of such scales very considerably.183
8.60 These reservations, and the others expressed earlier in these Submissions,
notwithstanding, the Bar Council is aware of the merit of increased
predictability and transparency in legal costs. It is for this reason that the Bar
Council submits the above model for the disclosure of legal costs, the
formation of legal costs agreements and the provision of detailed information
in fee notes, setting out the factors which are relevant to the costs incurred.
8.61 The Bar Council recalls its submission that any guidelines for the calculation
of legal costs must take into account each of the factors listed in Submission
11 above. The Bar Council moreover considers that the fact that each of these
factors will be reflected in the estimate of costs contained in the proposed
letter of disclosure and in the costs ultimately detailed in the fee note, ensures
that these guidelines will be taken into account.
8.62 Finally, the Bar Council submits that the model proposed in this Chapter for
the disclosure and setting of costs, guided by the factors set out in Submission
11 above, is wholly in line with the recommendation of the Working Group
for the establishment of “fee guidelines for each aspect of work done adjusted
to take into consideration the time taken in conducting the action, its
complexity and the jurisdictional level of the action.”184
183
In England and Wales, for example, while the Woolf Reports recommended that fixed costs be
introduced in a broad range of cases, fixed costs were actually only introduced in tightly defined,
limited categories of cases, such as road traffic accidents of a value below £10,000 in which only costs
were at issue.
184
Report of the Legal Costs Working Group (November 2005) at para 5.24.
90
Submission 26
8.63 The Bar Council submits that implementation of costs’ guidelines in the
disclosure of costs and fee notes, taking account of all of the relevant factors
and allowing a subjective application of the guidelines to the facts of each
individual case, will achieve the objectives of certainty, predictability and
transparency more effectively than any fixed or quasi-fixed scales of costs and
is the same in formulation, function and effect as the guidelines proposed by
the Working Group.
91
CHAPTER NINE SUMMARY OF SUBMISSIONS
Submission 1
The Bar Council submits that the Implementation Advisory Group should be vigilant
to ensure the principle that “costs follow the event”, the importance of which is
recognised by the Working Group, is not undermined by excessively restrictive
guidelines. The Bar Council also submits that the principle of equality of arms should
be carefully guarded and protected in the formulation and implementation of the
proposed guidelines. [paragraph 2.08]
Submission 2
In light of the criticisms and failures of fixed scales systems in Ireland and elsewhere,
the Bar Council strongly endorses the Working Group’s recommendation that such
fixed scales should not be introduced. The Bar Council submits that fixed scales are
anti-competitive and are neither desirable nor workable as a means of determining
legal costs. The Bar Council accordingly submits that the guidelines that are
proposed by the Working Group should not have the same, or a similar effect, as fixed
scales of legal costs. For this reason, the Bar Council submits that the Implementation
Advisory Group should ensure that the proposed guidelines do not directly or
indirectly have the same effect as fixed scales for recoverable legal costs. [paragraph
2.31]
Submission 3
The Bar Council submits that, while the context within which the cost guides were
formulated in England is very particular and must be born in mind in assessing that
costs’ system, the costs guidelines of that jurisdiction appear to truly have the effect
of guidelines rather than scales of costs. The Bar Council therefore submits that the
effect (if not necessarily the content) of the English costs’ guidelines should be
92
considered as a useful model by the Implementation Advisory Group. [paragraph
2.41]
Submission 4
The Bar Council reiterates that the proposed guidelines should only be of relevance as
a guide and a means of “informing” the appropriate level of legal costs and should not
have the same, or a similar, effect as scales of fixed costs. [paragraph 2.43]
Submission 5
The Bar Council requests clarification in relation to the “limits” referred to at
paragraph 7.18 of the Report and would welcome the opportunity to make such
further submissions as may be appropriate, upon receipt of the requested clarification.
[paragraph 2.48]
Submission 6
The Bar Council submits to the Implementation Advisory Group that the Working
Group’s Report refers to a number of different possible means of formulating and
implementing the proposed “guidelines”, not all of which are consistent with each
other. While the Bar Council attempts to make submissions in relation to the
guidelines proposed by the Working Group, the ambiguities and inconsistencies in
relation to this aspect of the Report, make it difficult to furnish definitive submissions.
The Bar Council therefore hopes that it will have the opportunity to make more
informed and concrete submissions, when the content, scope and effect of the
proposed guidelines have been further clarified. [paragraph 2.58]
Submission 7
It is the Bar Council submission to the Implementation Advisory Group that it is more
accurate, more workable, and more realistic, to formulate the guidelines in a manner
which encompasses the work actually done in a particular case, rather than relying on
an objective assessment of that work. [paragraph 2.69]
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Submission 8
It is the Bar Council’s submission to the Implementation Advisory Group that the
amount of time expended on a matter is one factor to be taken into account in
assessing the appropriate level of legal costs, and is so reflected in the Code of
Conduct of the Bar of Ireland, but that it should only be one of the factors to be
weighed. The Bar Council submits that extreme caution should be exercised before
introducing guidelines for the determination of recoverable legal costs, on the basis of
the time spent on the matter in question. In other jurisdictions in which time-based
billing has become the practice, this system of billing has received sustained and
virulent criticism. Moreover, such a system of billing would be singularly unsuitable
for assessing the work of a barrister. [paragraph 2.87]
Submission 9
The Bar Council submits that until the structural and procedural factors that inhibit
the efficiency and predictability of the litigation process are addressed, and the
recommendations of the Working Group towards this end are implemented, it is not
realistic to attempt to assign objective timeframes to particular tasks and steps within
the litigation process. [paragraph 2.90]
Submission 10
The Bar Council submission to the Advisory Implementation Group is that, while
legal costs should not be fixed as a direct proportion of the value of a claim, the value
of a case and its importance are factors that should be taken into account in
determining a reasonable level of legal costs. [paragraph 2.93]
Submission 11
It is the Bar Council’s submission to the Implementation Advisory Group that the
factors that should be taken into account in setting (or applying) guidelines for
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recoverable legal costs should encompass, or at least allow accommodation of, the
following:
The time spent on the matter;
The labour and effort involved;
The skill, responsibility, and specialised knowledge involved;
The complexity, novelty or difficulty of the issues;
The value of the claim or subject matter;
The importance of the case to the client or in the public interest;
The quality of the work done;
The place and circumstances in which the work is done;
Any time limitations imposed on the lawyers by the client or the
circumstances; and
The seniority, experience, reputation and ability of the lawyer.
[paragraph 2.110]
Submission 12
The Bar Council submits that any amendment to the proposed guidelines must be
preceded by a process of consultation with the Council of the Bar of Ireland and the
Law Society of Ireland and must involve the input and participation of both the Bar
and the Law Society. [paragraph 2.114]
Submission 13
The Bar Council welcomes any recommendations that have the objective of making
court systems and procedures more efficient and expeditious. However, the Bar
Council also submits that the Implementation Advisory Group should be mindful of
the practical, and cost, implications of imposing extra burdens and compliance
requirements on practitioners. [paragraph 3.04]
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Submission 14
The Bar Council welcomes the Working Group’s call for an improved system of civil
legal aid across the spectrum of issues which require resolution in the courts.
[paragraph 3.14]
Submission 15
The Bar Council submits to the Implementation Advisory Group that certain changes
to the manner in which judicial resources are allocated and cases are handled and
listed before the courts, are essential before any predictability of costs can be
guaranteed and before a comprehensive and workable system of guidelines for costs
can be introduced. [paragraph 3.17]
Submission 16
The Bar Council submission to the Implementation Advisory Group is that, while the
Bar Council is fully aware of the importance of the provision of information regarding
legal costs to clients, and the role of barristers in that regard, the formulation of any
rules governing such information should reflect the fact that it is often difficult for a
barrister to provide an exact estimate of legal costs and that such information will
generally be furnished to a solicitor, rather than to the client directly. [paragraph 4.10]
Submission 17
The Bar Council submission to the Implementation Advisory Group is that there is
never a requirement that a client must retain the services of a senior counsel. It is a
matter for an instructing solicitor, and the client, to determine whether to instruct a
senior counsel in a matter, and the number of counsel to instruct in any matter.
[paragraph 5.09]
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Submission 18
The Bar Council submits that, in the interests of transparency, consideration could be
given to including a requirement in a practice ruling to be issued by the Professional
Practices Committee of the Bar of Ireland that, in marking a brief fee, a barrister
should identify and enumerate the work undertaken in preparation for the hearing of
the matter, such as the legal research conducted, the procedural matters considered, all
papers that were reviewed, discovery and background material that were examined
and considered, the preparation of strategies, the planning of witness examinations,
the outlining and drafting of legal submissions and factual background documents,
and other such work done by barristers in the preceding months or years in
preparation for the trial. [paragraph 5.19]
Submission 19
The Bar Council submission to the Advisory Implementation Group is that, when a
barrister has been briefed and prepared for the hearing of a matter which settles before
the commencement of the hearing, the barrister is entitled to remuneration for all of
the preparatory work that was actually and appropriately done and for the time which
was dedicated to represent the client at that hearing. [paragraph 5.24]
Submission 20
The Bar Council submission is that, while certainty and predictability of costs are
desirable objectives, these objectives must not be pursued at the expense of
competition, and the Implementation Advisory Group must therefore be cautious in
implementing any guidelines for the assessment of costs. [paragraph 6.07]
Submission 21
The Bar Council submits that any attempt to fix costs guidelines in this jurisdiction
will require the participation of legal practitioners. It is the submission of the Bar
Council that the proposed “Legal Costs Regulatory Body” should have a majority of
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legal professionals among its members, reflecting the broad diversity of areas of legal
practice, and must rely on figures and data gathered from persons engaged in the
practice of law in order to ensure the accuracy and efficacy of the proposed
guidelines. The Legal Costs Regulatory Body should moreover include among its
members legal professionals who are versed and experienced in the law and practice
governing legal costs in the various areas of legal practice. [paragraph 7.11]
Submission 22
The Bar Council submits that consideration should be given to the introduction of a
rule in a practice ruling to be issued by the Professional Practices Committee of the
Bar of Ireland requiring barristers to disclose certain information regarding costs to
the instructing solicitor at the time of, or as soon as practicable after, receiving
instructions to act in a matter. The information would include a description of the
steps that are anticipated to be necessary in the litigation (such as the issue of
proceedings, interlocutory applications); the tasks that are expected to be necessary
within each such step (such as drafting, opinions, consultations, court appearances);
an estimate of the costs, or a range of costs; and a statement regarding the possible
allocation of liability for costs during and at the culmination of, the case. The solicitor
and client should have a “cooling off” period within which to consider this estimate
and solicitors should be encouraged to obtain quotes from other barristers. The
disclosure statement would need to be updated in the event of a significant change in
the estimate or, alternatively, at defined periodic intervals. [paragraphs 8.30 to 8.41]
Submission 23
The Bar Council considers that the formation of costs agreements at the time of, or
shortly after, accepting instructions to act in a matter, should be encouraged. Towards
this end, the Bar Council suggests that the disclosure of costs to a solicitor, followed
by acceptance by the solicitor and the client, in writing or by conduct, of that
disclosure, may be subsequently relied upon by the barrister and solicitor as a costs
agreement. The Bar Council advances the document attached at Appendix A as a
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model for such a costs disclosure and costs agreement between a barrister and a
solicitor. The Bar Council proposes that such an agreement should be of binding
effect unless a court, costs assessor or taxing master (as applicable) determines it to be
unfair and unreasonable. [paragraphs 8.46 to 8.47]
Submission 24
The Bar Council suggests that a rule could be included in a practice ruling of the
Professional Practices Committee of the Bar of Ireland requiring that, in marking a
“case fee”, a barrister should identify and enumerate the work undertaken in
preparation for the hearing of the matter and should set out detailed information
explaining, by reference to the relevant factors, any difference between the estimate
contained in the letter of disclosure and fee marked. This Submission is detailed at
paragraph 5.19 in these Submissions. [paragraph 8.49]
Submission 25
The Bar Council considers that it may be appropriate to include a requirement in a
practice ruling to be issued by the Professional Practices Committee of the Bar of
Ireland to the effect that a barrister’s fee note should enumerate the work done and
tasks undertaken and the fees charged for such work and tasks. In marking the fee
note, a barrister should take account of, and explain the relevance of, the factors listed
in Submission 11 of these Submissions. Any deviations between the estimate
contained in the letter of disclosure and the fees contained in the fee note, should be
explained by reference to the relevant factors and criteria. [paragraphs 8.50 to 8.54]
Submission 26
The Bar Council submits that implementation of costs’ guidelines in the disclosure of
costs and fee notes, taking account of all of the relevant factors and allowing a
subjective application of the guidelines to the facts of each individual case, will
achieve the objectives of certainty, predictability and transparency more effectively
than any fixed or quasi-fixed scales of costs and is the same in formulation, function
and effect as the guidelines proposed by the Working Group. [paragraph 8.64]
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APPENDIX A
DISCLOSURE OF LEGAL COSTS AND COSTS AGREEMENT
BETWEEN A BARRISTER AND A SOLICITOR
(Draft Model Disclosure and Agreement)
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DISCLOSURE OF LEGAL COSTS AND COSTS AGREEMENT
BETWEEN A BARRISTER AND A SOLICITOR
This Agreement is made between [INSERT name of barrister] and [INSERT name
of solicitor] this [INSERT day] of [INSERT month] in the year [INSERT year] in
relation to the matter(s) of [INSERT name of matter(s)] (“the Matter”).
Rule ____ of the Code of Conduct for the Bar of Ireland (“the Code of Conduct”)
requires that I (barrister) disclose certain information to you (solicitor) regarding the
legal costs I will charge in relation to the Matter. The Code of Conduct also provides
that we may enter into a costs agreement which sets out the terms on which I offer to
undertake work for you.
If, having read the disclosure information in part A hereof, you agree to the terms on
which I offer to undertake work for you, you can accept my offer in this costs
agreement by either signing the enclosed copy of this agreement and returning it to
me or by continuing to provide me with instructions in the Matter.
A. DISCLOSURE OF LEGAL COSTS
Pursuant to Rule ____ of the Code of Conduct, I disclose the following
information relating to my legal costs in the Matter.
1. Estimated work required
Based on the instructions and documents with which I am presently briefed, I
consider that the following steps may be required in this Matter:
(a) Issue of________ proceedings in _____ Court (drafting of
proceedings, opinion regarding Matter, consultation);
(b) Application for_____________ [injunctive relief] (drafting; [insert
number] court appearances; consultation; possible opinion);
(c) Application for ____________ [other interlocutory relief] (drafting;
[insert number] court appearances; consultation; possible opinion);
(d) [Any other steps that may be required].
2. Estimated legal costs
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Based on the instructions and documents with which I am presently briefed, I
estimate my legal costs will be [INSERT]. This estimate reflects the following
factors:
(a) [Complexity, novelty or difficulty, if applicable];
(b) [Value or importance of matter, if applicable];
(c) [Time that will be required];
(d) [Urgency of the matter, if applicable];
(e) [Any particular skill, expertise, seniority, experience, knowledge as
may be necessary];
(f) [Any other relevant factors which affect the level of the estimate].
The above estimate is based on the work required as I am presently
instructed and it is disclosed to enable you to comply with your disclosure
requirements under the Solicitors’ Amendment Act 1994 [or insert other
legislation as appropriate]. I advise that this estimate is given as an indication
only and I am not bound by it.
Should the scope or nature of my work, or the factors listed above, change in
light of any further instructions I may receive from you or developments within
the Matter, the above estimate may need to be revised.
-OR-
As I am presently instructed, it is not reasonably practicable for me to
estimate my total legal costs. I estimate that the range of estimates of my
total legal costs in the Matter is between [INSERT] and [INSERT]. The major
factors that will affect the calculation of my legal costs are as follows:
(a) [Complexity, novelty or difficulty, if applicable];
(b) [Value or importance of matter, if applicable];
(c) [Time that will be required];
(d) [Urgency of the matter, if applicable];
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(e) [Any particular skill, expertise, seniority, experience, knowledge as may
be necessary];
(f) [Any other relevant factors which affect the level of the estimate].
3. Revisions to estimate
In the event of any events occurring within the litigation, which have a
significant effect on the costs estimated above, I will forward to you an update
of the above estimate.
Subject to any further instructions I receive from you which have the effect of
varying the nature or the scope of the work in the Matter, I will forward to you
an account for work done at the following intervals:
(a) once the work set out above has been competed; or
(b) at the end of [the appropriate period needs to be determined and
inserted here].
4. Allocation of costs
Based on the instructions and documents with which I am presently briefed, I
consider that there is a [insert statement regarding the possibility of recovery
of legal costs from the other party in the Matter and the possibility of an order
for costs being made against the client].
B. COSTS AGREEMENT
1. Work to be undertaken
As presently instructed you have engaged me to [INSERT scope of retainer]
(“Work”).
An estimate of the nature of the Work (and the value of the Work) to be
undertaken by me is set out in A(1) above. The scope of Work may vary
depending on any further instructions I receive from you and other
developments within the Matter.
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2. Fees
I offer to undertake the Work in accordance with the estimate set out in
paragraph A(2) above. You should indicate your acceptance of my rates by
either signing the document below and retuning a signed copy to me. You
may also indicate your acceptance of my rates by continuing to provide me
with instructions in the Matter.
3. Agreement
By signing and returning a copy of this document you agree to be bound by
the terms in it. You may also agree to the terms herein by continuing to
provide me with instructions in the Matter.
SIGNED BY SIGNED BY SOLICITOR:
BARRISTER
PRINT NAME:
PRINT NAME:
DATE:
DATE:
SIGNED BY CLIENT
PRINT NAME:
DATE:
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