Estimates of Costs
We work alongside lawyers from the outset of claims to formulate accurate estimates of legal costs that can be relied upon, relayed to the client and to establish the suitability damages-based agreements and third party funding.
Whilst it is often difficult to tell at the outset what the overall cost of a claim will be, our knowledge and expertise in costs management affords our clients the best possible opportunity of having an accurate estimate of costs from the outset that can be relied upon.
It is important that estimates of costs are accurate, not only because the court is entitled to consider the estimate as a yardstick in determining what is a reasonable level of costs, but also because clients want to be assured that their lawyers are on top of the financial aspects of the case and not simply the legal aspects.
We prepare estimates of costs for multiple purposes, including:
To Provide to the Client
According to Rule 8.7 of the SRA Code of Conduct for Solicitors, RELs and RFLs, clients must receive the best possible information about how their matter will be priced and, both at the time of engagement and when appropriate as their matter progresses, about the likely overall cost of the matter and any costs incurred.
Damages-Based Agreements and Third Party Funding
When evaluating whether legal matters are suitable for damages-based agreements or third party funding, it is important to assess a number of factors, including the overall cost of taking the claim to trial and the likely recoverable costs inter-parties. We can assist solicitors and funders by providing accurate estimates of costs that enable them to establish with confidence whether a legal matter is suitable for these types of funding arrangements. It also helps them to establish an appropriate contingency fee; one that is profitable but also attractive to the client.
Our approach is logical. Firstly, we obtain from our clients an outline of the work that they envisage will be undertaken, the issues that are likely to arise in the claim, the experts and witnesses likely to be required, and details of the risk assessment. With our expertise in costs management, we are then most suitably placed to quantify an accurate estimate of costs.
As opposed to simply providing broad figures to clients with little or no explanation of how they have been reached, we have the expertise to provide an estimate of costs that is broken down into milestones or phases, together with clear underlying assumptions. We can also provide staged estimates of costs, with an overall estimate at a later stage once all the issues have been identified.
As with all estimates of costs, if there are unforeseen developments in the litigation, the estimate may need to be revised. We help our clients by revising the estimate of costs before such costs are incurred.
To discuss how we can assist you with the preparation of estimates of costs, contact us using the details below.
Our deep understanding of legal costs in the full spectrum of practice areas means that our clients always receive legal costs advice unique to the circumstances and challenges of each project.
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We help to address and resolve multifaceted challenges in relation to all aspects of legal costs, tailoring our strategic approach to address the specific objectives of our clients.
Frequently Asked Questions
When should an estimate of costs be increased?
The best approach is always to increase the estimate of costs before the costs are incurred. Clients should be informed immediately if it becomes apparent that the estimate will be, or is likely to be, exceeded. This should happen before undertaking the work that exceeds the estimate of costs.
What happens if an estimate of costs is exceeded?
Where an estimate of costs is given but the costs claimed subsequently exceed the estimate, it does not automatically follow that the solicitor is restricted to recovering the estimated sums. It will largely depend on the explanation for the divergence. Generally, the greater the difference between the estimate of costs and the final bill, the greater the explanation required. However, if there were no unexpected developments in the case and no satisfactory explanation for the difference, the costs may be limited to the estimate.