What are the Benefits of Using a Costs Draftsman Service?
Updated: May 5
A legal costs draftsman is instructed by many different types of clients, including individuals, small and large businesses, and other legal professionals. During the course of civil litigation, they are often instructed to prepare costs budgets for litigants, and these will generally govern the recovery of costs between the parties.
A legal costs draftsman is subsequently engaged in costs-only proceedings, assisting lay clients, other legal professionals and the courts in determining costs to be paid between the parties. Too often, however, legal costs work is carried out by other authorised persons, such as solicitors who do not ordinarily practice costs law, or unqualified practitioners who lack the relevant knowledge and experience of costs law. We consider the benefits of using a costs draftsman service provided by an expert legal costs draftsman.
An ‘Increasingly Complex and Specialised’ Area of Law
Within the Independent Review of Legal Services Regulation Report in June 2020, Professor Stephen Mayson acknowledge that costs law is becoming increasingly complex and specialised.
He noted that unqualified and unregulated practitioners were carrying on non-reserved costs activities, and conducting costs litigation, under the ‘supervision’ of authorised persons who have neither the skills nor the resources to perform this supervision adequately or effectively.
The report found that the scope and level of knowledge of these authorised persons is limited, leading to harmful ‘dabbling’, and that these errors can lead to significant and avoidable shortfalls in costs recovery, to the detriment of the lay client who had incurred these costs.
Using a costs draftsman service from an experienced legal costs draftsman or, even better, a regulated costs lawyer will help to avoid these errors, ensure the pleadings drafted are accurate and compliant with the relevant provisions in the Civil Procedure Rules and obtain the best result for the lay client, whether recovering or opposing costs.
Whilst, according to the 2014 Masters of the Rolls decision and Committee’s report on Guideline Hourly Rates, costs lawyers can recover Grade B or C hourly rates, often in practice the hourly rate of a costs lawyer or legal costs draftsman is less than the conducting solicitor.
We recently prepared a Bill of Costs for a client and they were pleased with our costs draftsman service and subsequently asked whether we could assist with costs budgeting. They said that they were uncertain how their clients would feel about incurring the additional costs of a legal costs draftsman to assist with costs budgeting.
Our hourly rate for a senior costs lawyer for this City of London based client was £140.00. Their hourly rate for the Grade B solicitor who had been undertaking costs budgeting work was £250.00. This meant that they could instruct us to prepare the costs budget, budget discussion report and deal with all other costs management work for almost half the cost to their lay client.
It was also open to our client to claim our time at their Grade B hourly rate as though we were in their temporary employment in accordance with the well-established principles surrounding agents’ fees.
Using a costs draftsman service is therefore invariably cost-effective. At Athene Legal we often apply hourly rates between £120.00 and £140.00 for senior costs lawyers, which is usually less than some City of London firms’ Grade D hourly rates. Furthermore, these costs are often recoverable from the opponent in principal, meaning that the instruction of a legal costs draftsman is generally costs neutral.
It Allows the Solicitor to Focus on What They Do Best
For law firms, instructing a legal costs draftsman allows the solicitor to focus their attention on case management. Solicitors generally have large caseloads that require their full attention and, in such circumstances, it is desirable to delegate the costs management work to a professional with expertise in the same. This is important both during and after the proceedings.
During the Proceedings
During the proceedings we assist our clients with preparation of costs budgets and subsequent costs management work. This allows our clients to focus on case management, including the consideration and preparation of proposed directions and Directions Questionnaires.
Our legal costs draftsman team also prepare statements of costs for interim hearings, mediation and security for costs, again, allowing our clients to focus their attention on preparing for the hearing or mediation.
Once the case has settled, solicitors often prepare statements of costs and attempt to negotiate the costs with the opponent themselves. Sometimes the level of detail provided in the statements of costs produced do not provide the opponent with sufficient information to enable them to formulate their own view on the reasonableness of the costs incurred. This makes reaching an agreement difficult.
If settlement cannot be reached, not only has the conducting solicitor spent between 3 – 10 hours which is unlikely to be recoverable, they then must instruct a legal costs draftsman and incur the cost of preparing a bill of costs for detailed assessment.
At Athene Legal we prepare initial statements of costs for our clients. We do so at a lower hourly rate than our instructing solicitors, and we present the costs in a transparent and concise manner, including breaking down the costs into budget phases where necessary. This improves our clients’ chances of reaching an early settlement of costs.
If costs cannot be agreed based on the statement of costs, we prepare a bill of costs; however, our fees are discounted to offset our fees for preparing the statement. We therefore ensure that it is advantageous for our clients and their lay clients to use our costs draftsman service.
Many legal costs draftsmen agencies have service level agreements with their clients, meaning the turnaround time for costs draftsman work will be quick. On most occasions, outsourcing costs draftsman work to an external costs draftsman service will lead to the work being completed faster than had it otherwise have been undertaken in-house.
Most firms of solicitors also maintain an electronic version of their file and have adapted to new ways of communicating and sharing information due to the pandemic. This means that it is now easier than ever to send files electronically to external costs draftsmen, which helps to improve turnaround time. It also means that if certain information or documentation has been omitted from the initial instructions, it is easy to communicate it to the legal costs draftsman.
Using a costs draftsman service can therefore lead to costs pleadings being prepared and served quicker, which, in turn, improves cashflow.
Costs is becoming an increasingly complex area of law, and this is reflected by the hourly rates available to costs lawyers, which are in line with solicitors with up to four years’ post-qualification experience. Costs is not an area in which legal professionals should ‘dabble’ given the damage that can be caused by errors in the costs pleadings, particularly given that specialist legal costs draftsman consultancies like us adopt lower hourly rates than our instructing solicitors and can turn instructions around in less than seven days.
If you require assistance with legal costs, contact us today to discuss your needs at firstname.lastname@example.org or 020 7459 4843.