Solicitors Code of Conduct

It never ceases to surprise that many solicitors are still failing to provide adequate information regarding legal costs at the outset of a case and to provide the client with regular updates regarding their costs.  The Solicitor’s Code of Conduct was introduced in 2007 and is to be replaced with the Outcome Focused Regulations (OFR) in August 2011, with Rule 2 being promoted to Rule 1 given its importance. However, for the purposes of this article we shall quote the current rules.

In the continuing difficult trading climate, conforming to the Solicitor’s Code of Conduct is vital.  We are receiving an increasing number of instructions from Litigants in Person challenging their solicitor’s costs, and not without just cause for complaint.   It, therefore, seems appropriate to refresh our working knowledge of the Code: 

 (1)  You must give your client the best information possible about the likely overall cost of a matter both at the outset and, when appropriate, as the matter progresses. In particular you must:

(a) advise the client of the basis and terms of your charges;

(b) advise the client if charging rates are to be increased;

(c) advise the client of likely payments which you or your client may need to make to                others;

(d) discuss with the client how the client will pay, in particular:

(i)  whether the client may be eligible and should apply for public funding; and

(ii)  whether the client's own costs are covered by insurance or may be paid by someone else such as an employer or trade union;

(e) advise the client that there are circumstances where you may be entitled to exercise a lien for unpaid costs;

(f) advise the client of their potential liability for any other party's costs; and

(g) discuss with the client whether their liability for another party's costs may be covered by existing insurance or whether specially purchased insurance may be obtained.

(2)  Where you are acting for the client under a conditional fee agreement, (including a collective conditional fee agreement) in addition to complying with 2.03(1) above and 2.03(5) and (6) below, you must explain the following, both at the outset and, when appropriate, as the matter progresses:

(a) the circumstances in which your client may be liable for your costs and whether you will seek payment of these from the client, if entitled to do so;

(b) if you intend to seek payment of any or all of your costs from your client, you must advise your client of their right to an assessment of those costs; and

(c) where applicable, the fact that you are obliged under a fee sharing agreement to pay to a charity any fees which you receive by way of costs from the client's opponent or other third party.

(5) Any information about the cost must be clear and confirmed in writing.

(6) You must discuss with your client whether the potential outcomes of any legal case will justify the  expense or risk involved including, if relevant, the risk of having to pay an opponent's costs.

Two separate cases recently crossing our desks involved a solicitor failing to comply with 1(f) of the code, the client being shocked when confronted with a bill for the other side’s costs. In one of the cases, the liability for costs exceeded £1 million. Throughout, the client had been advised that they had a good case and there was no insurance in place. Not only was no protection afforded the client, breaching 1(g) of the Code of Conduct, but the solicitor was negligent in failing to advise the client properly. 

The other case involved a £15k costs order against the client in a matrimonial case where they had had no realistic prospect of resisting an application in this country on the grounds that proceedings were being pursued in another country as there was no legal jurisdiction abroad.  The solicitor had unnecessarily exposed the client to a costs order. 

We have developed a number of solutions to solicitor own client issues and costs protection via our contacts in the insurance industry. Do not hesitate to contact us to discuss your needs or click here.

Another common breach relates to Rule 2.03 (6). In one particular case a company instructed a solicitor to recover unpaid invoices in the sum of £5k.  The solicitor’s bill totalled £35k.  We were instructed by the paying party to oppose the bill of costs and successfully reduced the bill at a Detailed Assessment hearing to £20k, resulting in a significant shortfall and a loss of £10k to recover the £5k invoice. 

Litigation must always be cost effective. As experts in costs, we have spent a considerable amount of time working with solicitors in relation to budgets and time management, we would be happy to advise you and your firm on this topic, details of our services being found by clicking here.  We are experienced in the service of preparing budgets and costs estimates, the same becoming increasingly popular with Lord Justice Jackson placing particular weight on ways of controlling costs.