“Outdated” solicitors costs and options for reform are to be examined by the Civil Justice Council (CJC).
Announcing the launch of the consultation, the CJC acknowledged comments made by Sir Geoffrey Vos, Master of the Rolls, in the Court of Appeal’s decision in Belsner v. CAM Legal Services Ltd in 2022.
In the written judgment, Sir Geoffrey said the distinction between contentious and non-contentious business in the context of solicitors’ costs was “‘outdated” and in need of “urgent … legislative attention”.
The Civil Justice Council’s (CJC) May 2023 Costs Report reiterated the concerns, and in early 2024 a working group was tasked with identifying the background to the legislation, current regulatory regime and potential options for reform.
A consultation, which will look at reforming Part III of the Solicitors Act 1974, has now been launched to consider the current contentious and non-contentious costs regime and produce a final report with recommendations for reform.
With digitalisation now on the agenda, setting out the regulation of solicitor and own-client costs, including the division in the treatment of contentious and non-contentious costs, has become a priority. Parts of the structure of the current costs regime can be traced back to the 18th century.
Writing in the consultation paper, the CJC notes: “It is complex, formalistic and outmoded. Moreover, its complexities provide perverse incentives for costly litigation about costs, which have been criticised in a number of modern authorities (most notably Belsner).
“The resultant inefficiencies are wasteful of Court time and resources and damaging to consumers and businesses alike. We suggest that the time has come for introduction of a new, clear and simplified system reflecting modern regulatory and business practices.”
The consultation proposes an overhaul of Part III to achieve a much simpler and principles-based statutory code, supplemented by professional conduct rules overseen by the regulator.
It also recommends a process for consumers, small businesses and others within the scope of the Legal Ombudsman scheme to use the simpler scheme, rather than court proceedings, to challenge more modest bills.
The Law Society of England and Wales has welcomed the consultation and is encouraging its members to contribute.
“Rules around solicitors’ costs are unnecessarily complicated and it is positive that the Civil Justice Council are considering reform,” the Law Society’s vice president Brett Dixon said.
“The consultation will impact solicitors as it examines the way they bill their clients, as well as how disputes relating to costs are dealt with in future.
“The Law Society will be responding in full and we urge our members to engage with the consultation.”
The consultation is open now and closes on 16th July. More information and details on how to respond can be found on the Courts and Tribunals Service website.
