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Wigg & Co - Checklist for Solicitors

Solicitors are reminded of the importance of providing accurate costs estimates following the Court of Appeal decision in Cawdery Kaye Fireman & Taylor v Gary Minkin [2012] EWCA Civ 546, [2012] All ER (D) 35 (May).

The Minkin case and previous authorities have fundamental implications for solicitors in terms of costs estimates. Solicitors should carefully consider the following points when preparing costs estimates and retainers :-

  • Retainers should provide clients with an accurate costs estimate, clearly explaining the nature of the firm's engagement and setting out exactly what the firm is undertaking to do. If a client's instructions at the outset are unclear then this should be referred to in the retainer with confirmation that the terms of engagement will follow at a later stage once known.
  • Consider the extent and parameters of the client's instructions in order to decide the appropriate level of detail required in the original estimate and retainer. Consider providing a detailed costs plan setting out specific estimates for each stage of proceedings on a step-by-step basis, allowing for foreseeable events. If unclear instructions are initially received, consider limiting the initial estimate to the foreseeable and anticipated work and tell the client you will provide a more detailed estimate as the matter progresses.
  • Provide clients with detailed and well thought out initial costs estimates combined with regular and prompt revised estimates where necessary. If a client has limited financial resources and has made this clear at the outset, solicitors may struggle to recover costs above the estimate. However if a solicitor has provided reasonable written notice to a client that the estimate is likely to be exceeded and the reasons for this, there is a greater chance the firm will be entitled to argue they should receive the costs in excess of the estimate.
  • Solicitors must keep a close eye on costs as the matter progresses and cross-refer billed costs with previous estimates. Updated estimates should be provided regularly before billed costs exceed previous estimates.
  • If an estimate is exceeded solicitors must carefully consider whether they can justify the increase and provide a full explanation so the client can make an informed decision of the cost-benefit of continuing their case.
  • Bill regularly to keep abreast of costs and provide detailed estimates at each significant stage. If a costs estimate is likely to be exceeded advise the client in writing and give reasonable notice.
  • Solicitors are entitled to suspend work for clients who have not paid their bill in accordance with agreed terms. However solicitors must provide reasonable notice to the client and carefully consider first whether a costs estimate has been exceeded. If an estimate has been exceeded without warning to the client there is a risk that the firm may be held to have unreasonably stopped acting particularly if there has not been an unexpected turn of events which has complicated the case. Solicitors should also consider trying to agree a payment plan with the client.

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2 Aug 2021 | Law Costs Draftsman | Law Costs Drafting