Who is counting the costs?

Lawyers cannot be masters of all areas, so when it comes to drafting legal bills, using a law costs draftsperson is the safest and most efficient course of action, says Linda Tsang. Linda Tsang is a freelance journalist.

With all the recent publicity about costs and the continuing negative publicity surrounding legal fees and so-called “fat cat” lawyers, it is more important than ever that solicitors be transparent about their billing.

It is also vital for anyone preparing bills – whether they are in-house or external draftsmen or the solicitors themselves – that they are aware of all the relevant case law and practice to avoid falling foul of complaints or of suffering embarrassing taxation deductions at a later date.

For firms that use external draftsmen, a good place to start is personal recommendation. However, there are other pointers to reputation and reliability and experience, such as membership of the Association of Law Costs Draftsmen. Also check that they use the title “draftsman” or “draftsperson” rather than “costs clerk”, because use of the latter often indicates that they may not be a member of the association.

Membership of the association is not compulsory, but to be a member fairly stringent requirements have to be met and comprehensive training has to be undergone.

Almost 70 per cent of the recognised costs draftsmen in England are members of the association. There are three different levels of membership – fellows, associates and student – which indicates members' experience and examinations they have passed.

The association is a useful reference point for its members and for the firms which make use of the services of its members. Members are up to date on legislative and practice changes in costs generally as well as costs drafting and so can answer queries about costs and taxations. And keeping up to date is imperative – especially for those in-house draftsmen or solicitors who prepare their own bills – in the light of recent cases on taxations, such as Thai Trading v Taylor & Taylor in February and General of Berne Insurance Co v Jardine Reassurance Management and Nederlandse Reassurantie Groep v Bacon & Woodrow, Ernst & Young and Swiss Bank Corporation in April.

The association is also up to date with changes in legal aid practice in terms of costs limitations and can advise on how to make sure that the indemnity principle is not being breached.

As with using any professional service, you should carry out your own research and get references from relevant parties. One costs draftsman says: “Solicitors are not experts in all areas of the law. In view of recent cases on legal aid, on both the civil and criminal side, while many solicitors may specialise in the practice, they are not necessarily expert and up to date on costs law or taxation practice and recent decisions. That is what costs draftsmen and consultants are for.”

He adds: “A solicitor who may only have to attend a taxation once every six months may be spending more time and effort – which could be better employed doing fee-earning work – when a consultant or draftsperson, whose job it is to attend taxations day in, day out, can do it usually for much less cost, in terms of both time and money.”

It may be more practical and more secure to use a local draftsman if the bill to be prepared will involve transporting files and other confidential papers. But you should check that whoever you use has their own secure transportation systems in place.

Depending on who you are instructing, you may want to stipulate that the costs drafting should not be sub-contracted out.

A straightforward drawing up of a bill of costs will usually be charged on a percentage basis (usually in the range of 5-7 per cent). Other work, such as having to prepare objections and/or attending a taxation will usually be charged at an hourly rate. Hourly rates normally range from about £50 in the regions, to about £85-100 in London.

To make sure that both parties are clear as to what the final product will be, there are a number of essential requirements, and these apply to both civil and criminal cases:

the brief should be in writing;

a deadline should be given for preparation of the bill;

the costs draftsman should be informed of the complexity of the case. The solicitor should give a brief outline of the case, including, in particular, anything which may not be obvious from the papers submitted but which may require enhancement of the fees. The briefing solicitor should also retain original documents and take copies of any other papers which they may need to refer to in the interim; and

preferably all of the files for the case should be submitted. Even if the solicitor does not consider certain files or papers are important, the costs draftsman may need them to cover all the “fair and reasonable” costs to be recovered. The files should be kept in good order with the bundles date recorded. Also include attendance notes, pleadings, briefings and instructions, as well as invoices and vouchers. As one costs draftsman advises: “It is no good sending the file and the printout – and certainly no point in sending only the printout, which will just be rejected.” As for the attendance notes, you should try to strike a happy and informative medium between a multi-page diatribe and a two-line summary.

There are also a number of essentials for the law costs draftsmen:

prepare the bills so that everything is included and ensure that the layout makes them easy to read. It is also important that the language used is clear and concise. As one costs clerk puts it: “It should be said more often – stick to plain English, with short sentences, with full descriptions and including all preparation items.”

law costs draftsmen are warned: “never assume that everything is correct or that matters have already been checked. It may even be advisable to assume the worst and advise them to act as soon as possible to rectify matters.” So advise the solicitor promptly and fully if there is anything missing or wrong in a file, or if there is anything that has to be corrected.