8
Inside this issue: Page 3 How To Beat The Norm-Man! Page 5 Work in Progress – The Undervalued Asset Page 6 Who’d be a Costs Judge? costs in brief I start by making a few basic comments. The law of the land exists primarily to protect the rights of its citizens as individuals in their day to day lives and in their legitimate enterprises and going to Court may be the only way to resolve a dispute or to get or keep something to which they are entitled. www.kain-knight.co.uk Issue No 14 How will Jackson Affect Litigation Funding? ‘There is little point in chasing rainbows!’ Sir Melford Stevenson once said – “For most people embarking on litigation is a major financial hazard, posing a problem of terrifying human dimension”. Solicitors, Counsel and Experts command premium professional fees and if you lose you pay the other sides costs as well as your own. Historically litigation became the luxury, even the indulgency, of the rich individual or the large corporation and access to natural justice has often been denied on the grounds of cost alone rather than on the merits of the case – an injustice in itself. With that background where do we stand on third party litigation funding? Litigation funding has come a long way in the UK since the Conditional Fee Agreements Regulations were introduced in 2000 and the Access to Justice Act was passed in 1999. Since then, and in many ways due to the publicity arising from the funding by IMLF of the Stone & Rolls v Moore Stephens case, the market has developed substantially as new players have emerged and the range of product offered has expanded. Solicitor firms, Barristers and Forensic Experts are all now increasingly aware of the benefits and helpful disciplines that funders can bring to claims. I should make it clear that litigation funding as discussed in this article means funding of major commercial or insolvency related claims, and not personal injury or medical negligence claims. It is worth noting that litigation funding has existed in other jurisdictions in the world at least as long as it has been around in the UK. Australia has a well developed funding market, the US has established contingency fee arrangements as well as third party funding, and funding is emerging in Canada. Funding has existed in Germany, Switzerland and the Netherlands for a substantial period of time. However each jurisdiction has its own characteristics and legal system, and therefore its own product offering. Let us explore the characteristics of the UK market together, the products available and how they interact. I will comment at the end on the opportunities and challenges for Funders arising from Lord Justice Jackson’s recent report on the costs of litigating in England and Wales. It is by now well established that a Solicitor is required under rule 2.03 of the Solicitors Client Code to advise a litigant at the outset of a claim as to the options open to the client to fund the costs of litigation. Those options include, inter alia, Conditional Fee Agreements’s (“CFAs”), insurance cover and third-party funding. We think it is good practice for the client to request certain additional information from the Solicitor at the outset, including an accurate and comprehensive estimate of the costs required to take the action all the way through to the end of trial. It is most certainly not in the client’s interests to get part way through the process only to discover that it cannot afford to fund the claim through trial. This is all the more important as the complexities of litigation lead to cost overruns more often than they lead to cost underruns. Such an estimate should be comprehensive, including Barristers costs, Experts costs, disclosure costs, security for costs (whether by way of deposits in Court or otherwise), potential for Adverse Costs Orders along the way, VAT and the Defendant’s costs if the claim is unsuccessful. Also the creditworthiness of the Defendant should be assessed at the outset, as there is little point in chasing rainbows! In terms of coverage and interaction of funding products, you will find that they can interact together or they can stand alone. The decision as to what mix to put in place belongs to the client, helped by the advice from the Solicitor. The Solicitor can advise on what choices are available, but the client should always be aware that the choice is theirs. After the Event insurance (ATE) will cover the client for Adverse Costs Risks, and usually the client’s own Barrister’s and Expert’s fees up to the policy limit.

Kain Knight InBrief 14

Embed Size (px)

DESCRIPTION

Law Costs Newsletter

Citation preview

Inside this issue:

Page 3How To Beat The Norm-Man!

Page 5Work in Progress – The Undervalued Asset

Page 6Who’d be a Costs Judge?

costs in brief

I start by making a few basic comments. The law of the land exists primarily to protect the rights of its citizens as individuals in their day to day lives and in their legitimate enterprises and going to Court may be the only way to resolve a dispute or to get or keep something to which they are entitled.

www.kain-knight.co.uk

Asset

costs in brief

www.kain-knight.co.uk

Issue No 14

How will Jackson Affect Litigation Funding?

‘There is little point in chasing rainbows!’

Sir Melford Stevenson once said – “For most people embarking on litigation is a major financial hazard, posing a problem of terrifying human dimension”. Solicitors, Counsel and Experts command premium professional fees and if you lose you pay the other sides costs as well as your own. Historically litigation became the luxury, even the indulgency, of the rich individual or the large corporation and access to natural justice has often been denied on the grounds of cost alone rather than on the merits of the case – an injustice in itself. With that background where do we stand on third party litigation funding?

Litigation funding has come a long way in the UK since the Conditional Fee Agreements Regulations were introduced in 2000 and the Access to Justice Act was passed in 1999. Since then, and in many ways due to the publicity arising from the funding by IMLF of the Stone & Rolls v Moore Stephens case, the market has developed substantially as new players have emerged and the range of product offered has expanded. Solicitor firms, Barristers and Forensic Experts are all now increasingly aware of the benefits and helpful disciplines that funders can bring to claims. I should make it clear that litigation funding as discussed in this article means funding of major commercial or insolvency related

claims, and not personal injury or medical negligence claims.

It is worth noting that litigation funding has existed in other jurisdictions in the world at least as long as it has been around in the UK. Australia has a well developed funding market, the US has established contingency fee arrangements as well as third party funding, and funding is emerging in Canada. Funding has existed in Germany, Switzerland and the Netherlands for a substantial period of time. However each jurisdiction has its own characteristics and legal system, and therefore its own product offering. Let us explore the characteristics of the UK market together, the products available and how they interact. I will comment at the end on the opportunities and challenges for Funders arising from Lord Justice Jackson’s recent report on the costs of litigating in England and Wales.

It is by now well established that a Solicitor is required under rule 2.03 of the Solicitors Client Code to advise a litigant at the outset of a claim as to the options open to the client to fund the costs of litigation. Those options include, inter alia, Conditional Fee Agreements’s (“CFAs”), insurance cover and third-party funding. We think it is good practice for the client to request certain additional information from the Solicitor

at the outset, including an accurate and comprehensive estimate of the costs required to take the action all the way through to the end of trial. It is most certainly not in the client’s interests to get part way through the process only to discover that it cannot afford to fund the claim through trial. This is all the more important as the complexities of litigation lead to cost overruns more often than they lead to cost underruns. Such an estimate should be comprehensive, including Barristers costs, Experts costs, disclosure costs, security for costs (whether by way of deposits in Court or otherwise), potential for Adverse Costs Orders along the way, VAT and the Defendant’s costs if the claim is unsuccessful. Also the creditworthiness of the Defendant should be assessed at the outset, as there is little point in chasing rainbows!

In terms of coverage and interaction of funding products, you will find that they can interact together or they can stand alone. The decision as to what mix to put in place belongs to the client, helped by the advice from the Solicitor. The Solicitor can advise on what choices are available, but the client should always be aware that the choice is theirs. After the Event insurance (ATE) will cover the client for Adverse Costs Risks, and usually the client’s own Barrister’s and Expert’s fees up to the policy limit.

How will Jackson Affect Litigation Funding? continued . . .

2

The premium can be made contingent upon success and deferred, or it can be paid in cash up front. You may think it odd to pay up front when you do not have to, but we recommend that quotes are obtained for both types of premium in order to clearly establish the client’s options. Deferred and contingent premiums can be substantially larger in quantum than cash or part-cash premiums, and in addition deferred premiums can alter the dynamics of a pre-trial settlement discussion (bear in mind that the vast majority of claims settle before trial). The last point to bear in mind here is that insurers insure risks, they do not provide cash during the life of the claim (except perhaps for Adverse Cost Orders). Turning to CFAs, these enable Solicitor firms to work on a partially or wholly discounted fee in return for earning an uplift upon success. Many Solicitors’ firms are now willing to offer this product to their clients. However, the client and Solicitor should have a clear discussion up front about the recoverability of any uplift, as it may be the courts will not permit the uplift to be paid by the losing party meaning that the client must fund it from damages. Lastly, third-party litigation funders can offer to fund all of your costs as they arise in the litigation, including the costs arising from loss. Third-party funders very often work on claims where ATE policies and CFA’s are also deployed – the three are not mutually exclusive. At the end of the day it is for the client to choose what kind of funding is required and then to engage with the parties. It is helpful that many cases have run their course in the UK now and the outcome experiences have been learned.

Each type of funding has its own applicability. CFA’s and ATE insurance probably have the widest range of coverage, although the impact of the Jackson report may impact on this as I set out below. The reason they have a wider range of coverage is because the cost of the arrangement (the uplift or the premium) are under present law and the Civil Procedure Rules recoverable from the Defendant upon success (see the Access to Justice Act 1999). Third-party funding is focused on a narrowly defined type of case, being claims (usually

commercial or insolvency related) with solid damages in excess of £3m, with a creditworthy Defendant and very strong legal merits. The reason third-party funding is focused on these kinds of claims is that they have the strongest probability of producing an attractive investment return for the funder, damages for the Claimant and a reasonable uplift on success for the Solicitor.

Let’s look at an example. Smith Enterprises Limited has a claim against Megatron Inc in respect of a breach of contract, which their Solicitor and Barrister advise them has very strong legal merits. The contract specifies English law. Damages are estimated by the Finance Director at £5m, and the costs of running the claim through trial at £1m.

The directors of Smith Enterprises are aware that Megatron has almost unlimited cash resources and probably an insurer to support the claim. Smith Enterprises has cash resources, but £1m would represent a substantial drain on those resources to the detriment of the overall business and its development. Smith Entreprises like the fact that ATE insurance is available, and that their Solicitor (a partner in a well-respected

UK national firm with a good track record in this area of litigation) is prepared to work on a part-CFA and to prepare a comprehensive cost estimate to take the claim through trial. However they decide that they do not wish to drain any of their cash resources and that they will enter into an arrangement with a third party funder to underwrite all of the costs of pursuing the claim – advancing cash as required by the estimate. The funders work with the Solicitor to ensure that the estimate covers the eventualities under CPR (strike-outs, security for costs etc). The diagram below shows how the proceeds of a successful claim could be divided up:

The recent publication of Lord Justice Jackson’s review into the costs of litigating in England and Wales will most likely bring changes to the funding options presently available to clients. Some of these, if implemented, will be beneficial to clients and funders in the long run and some of them will not. The major points to consider for major commercial litigation claims are:

to consider in terms of reducing the costs of litigation. In respect of mass claims, professional firms can assist clients and Solicitors in administering large groups of Claimants, and this is often the case in, for example, the recent air cargo settlement www.Forensicsolutions.com. A second area is the costs of Forensic Experts. In the Factortame case financial Experts were able to perform their services in return for payment derived from a percentage of the proceeds of the claim. This type of innovative practice has not often been explored or taken up by the expert community, nevertheless it is an area worth exploring in respect of large commercial claims. In these kinds of claims the costs of disclosure and Forensic Experts can reach 40% to 50% of the costs of the claim, and therefore exploring ways of managing and controlling these costs at the outset are strongly advisable from a client point of view.

All in all, the third party funding market is developing and will, we believe become an integral part of the litigation environment.

Derek Patterson, Director, IM Litigation Funding

3

The most obvious way would be to increase hourly rates. Even if Jackson’s plans fall flat a general review of hourly rates is something that all Solicitors should be undertaking in any event.

From my experience too many Solicitors are just not pushing for higher rates. There is still the tendency to accept guideline rates that are being offered without a whimper! At a recent Detailed Assessment a Solicitor Advocate who had handled a complicated dispute throughout was restricted to the guideline rate for a Grade A fee earner. He probably deserved more but did not present any evidence to support his case leaving the

District Judge with little alternative but to allow the Guideline rate.

It must be remembered that the Guideline Rates are for Summary Assessments only. They were introduced in 1999 to help Judges, who had little experience in dealing with costs, assess costs at the conclusion of hearings lasting no more than one day. If, however, you appear before any Costs Judge in the Supreme Court Costs Office they will tell you that the Guideline Rates are just one of the factors that they will take into consideration. So how can a Claimant Solicitor achieve a higher hourly rate?

Prior to CPR in 1999 the mechanism for assessing hourly rates was for the Solicitor to apply an “A” figure to a “B” figure. The “A” figure being the expense of time and the “B” figure to take into consideration all of the factors apart from time that are often referred to as the Seven Pillars of wisdom, such as complexity, novelty, importance to the client etc. The “A” and “B” figure is not entirely dead. In the case of Higgs v Camden Health Authority (2003) EWHC 15 (QB) (2003) 72 BLMR 95 a nine year old Claimant received £3.5 million pounds for being seriously damaged during the first 35 minutes of his life.

How To Beat The Norm-Man!

If most of the Jackson Recommendations come in, then Claimant Solicitors are going to have to find new ways of increasing inter party costs.

• The potential introduction of contingency fee arrangements – this will be a valuable addition to the range of client funding options. The present CFA arrangement, as noted by Lord Justice Jackson, focuses lawyers on incurring billable hours because every billable hour increases their potential uplift. This takes no account of the damages achievable in the claim, which is the client’s ultimate goal. A contingency fee, which is calculated as a share of the potential client damages, encourages the Solicitor to calibrate its investment against the outcome achievable for the client, which we think is a good thing.

• The losing Defendant no longer be required to pay the CFA uplift or the ATE insurance premium – this basically means that clients who enter into CFA’s or ATE need to carefully consider the economic proposition, since they will no longer be able to pass the cost of the arrangement on to the Defendant.

• Funders should commit to a code of practice – this is a positive step and one which we feel will contribute to the continuing development of the industry. It should

also remove to a large extent the historical problem of champerty and maintenance.

• Funders should be required to pay all of the costs of the losing party if the funded Claimant loses – we agree with this, and our practice is that we have historically funded these costs in full. We have found that the expert advice of professionals like Kain Knight is very valuable in situations like these.

Funding works well in many different circumstances for large commercial claims, whether the client simply does not have the cash to spare or whether they would like to de-risk. Clients very often litigate maybe once or twice in their lives, and it is usually if not always a worrying and expensive process. By joining with a funder, who is in effect a multiple litigant, the client can remove the financial risk and share some of the worry and pain of running the claim. This is a valuable option for any claimant to know about and decide upon.

In closing we draw your attention to two intriguing areas which are less well known but are nonetheless options for a client

4

It was held that the Guideline Rate was of little relevance. The Courts looked back at the “A” and “B” factors. The Claimant Solicitors were looking for an hourly rate of £300. The Court upheld that rate by representing an “A” figure of £150 plus a “B” figure of £150 per hour. (100% uplift) Many Defendant Costs Draftsmen still look at the “A” and “B” figure to calculate what is a reasonable hourly rate by starting with the Guideline Rate and adjusting it. It is believed that when calculating the composite rate the powers that be took the local expense of time and applied a 50% mark up. So by adding a different % gives an increased rate. For example by taking the Guideline Rate of say £300 it is easy to work out the “A” figure of £200 and adding the 50% “B” figure of £100 gives the composite rate of £300. If you take that “A” figure of say £200 per hour and then apply a 75% mark up that equates to £350 per hour and by applying a 100% that would give you £400 per hour. The “A” and “B” figure is still there today but you need to find justification for applying it. In the case of Jones v Secretary of State for Wales (1997) 2 ALL ER 507 QBD it was accepted that a Solicitor who specialises in a specialist field is entitled to receive a higher hourly rate than those Solicitors in his local area. In the case of Cox v MGN Ltd 2006 EWHC 1235 QBD, 2006 ALL ER D 396 (May) the Court gave some useful guidance. They said “if you wish to take yourself OUT OF THE NORM you have to provide the Court with evidence to enable you to do so. You may have a niche practice, and you may be able to persuade celebrities that you are the Solicitor to go to what ever rate you choose to charge them, but without evidence that your overheads are out of the ordinary, there is no basis for holding that Jones and the Secretary of State should apply.”

So what evidence do you need to show that your overheads are out of the ordinary? The simplest way is to produce by way of a statement showing that your expenses are greater than your average Solicitor in your town or city. If we go back to pre 1999 this was quite simple. You would get your Accountant to prepare an independent calculation based on the old cost of time calculation and identify areas where those expenses are out of the norm. I know of one Solicitor who regularly attends seminars around the world to gain knowledge and contacts in his field. His accounts clearly show that that his expenses far exceed those of the average Solicitor in his town. Whilst most Solicitors are modest about their achievements when it comes to justifying their hourly rates modesty must fly out of the window. A Solicitor must demonstrate that they have expertise. Another of my clients produces a statement clearly showing off his expertise. He is able to produce a schedule of all of his eighteen reported cases. Some are law reports from the House of Lords and Court of Appeal others were reported in the Times, The Supreme Costs Office and even the Leicestershire Mercury. He also gives details of the articles that he has written and has had published, his consultancy work and expert evidence and the recommendations from Clients, Barristers and even Court officials. But what about the old Wraith argument of your local Solicitor I hear you say? I do not think location need be as important as it used to be. At one time it was deemed so important that one city firm changed their address from the front door to the back door, giving them a City of London postcode. At a recent Detailed Assessment of it was raised that the Solicitors were outside the City walls of London. They were in fact some 12 yards from the boundary.

Costs Judge Wright had to decide whether they were entitled to a “City rate” or a Central London Rate. I successfully argued that it was the work and not the location that he should consider. I pointed out that at least 6 large “ City” firms were now in very expensive offices but were in fact outside the City walls including Clifford Chance, Norton Rose and Reynolds Porter Chamberlain. Quite rightly in my opinion the Master accepted my submission that City work should attract City rates This was an important step and it may well be that the test is not a geographical location one but what type of work the Solicitor was undertaking. Not all work done in the City attracts City rates. See King V the Telegraph Group 2004 EWCA CIV 613 2004 All ER D 242 (May) Defamation work was not regarded as City work. In conclusion it is about time that Claimant Solictors started to think carefully about their hourly rates and how they can persuade Defendants, if not the Courts, that they are worth more than the Guideline rate.

Michael KainChairman

How To Beat The Norm-Man! continued . . .

5

Work in Progress – The Undervalued Asset

Yet the management of this asset is a core part of any business. The implications of carrying WIP on cash flow are generally understood. What is more problematic is the effect of WIP on the asset value of the business, particularly in any retirement of a principal, sale of a firm or merger.

The Accountants were first to realise that the measurement of billing could be based on time. It has taken the legal profession some additional time to catch up. Now that it has we are being told that the charges are too high and fixed fees combined with global settlements are the way forward.

Measuring WIP has become more exact with the implementation of time recording. That said even the best fee earners are ‘losing’ time. This, in many firms is coupled with the exemption from time recording in property or conveyancing departments. The end result is that not only is work not billed but also, whilst the tax bill may be reduced, when a principal wishes to retire their stake in the business may be considerably undervalued. That is a situation that can be echoed on the sale or merger of a firm and can also lead to squeeze on the ability to borrow to fund the firm, with lenders taking a pragmatic broad brush approach to WIP in the absence of any sound valuation.

In this article we examine the impact of unrealised WIP on cash flow and the value of a practice

Cash FlowTo take a notional P & L:

Income 1,750,000

Direct Costs 700,000

Gross Profit 1,050,000

60%

Overheads 612,500

net Profit 437,500

25%

The income of the firm is £4,794 per day. It costs £3,595 per day to run the firm. At 90 days the firm is funding WIP of £431,506, which in this example almost matches the annual profitability. During the same period staff have to be paid and overheads met totalling £323,550. Extending the WIP days increases the problem.

In a recent survey carried out for Kain Knight whilst 50% of firms agree with their clients that they will bill monthly less than 30% actually do, thus unnecessarily increasing the collection of WIP.

PI DepartmentsIn PI departments working on CFAs there is a double whammy. The average time from receipt of instructions to conclusion of a case is, reviewing the Kain Knight statistics, between 14 and 18 months. When the firm pays a referral fee, where the PI department constitutes 25% of the firm and its income,

the WIP profile is:

Income 437,500

Direct Costs 175,000

Gross Profit 262,500

60%

Overheads 153,125

net Profit 109,375

25%

The WIP based on 16 months totals £583,333. Referral fees distort the equilibrium of this model and a more likely scenario is:

Income 437,500

Direct Costs 90,000

Gross Profit 347,500

79%

Overheads 153,125

Referral fees 87,498

net Profit 106,877

24%

This allows for an average of £3,000 profit costs per case and a referral fee of £600. Predictable costs will further distort this, but will realistically be balanced by a reduction in referral fees (one can but hope).

The requirement for a disciplined approach to the recording of time and billing and collection is obvious. Efficient firms will have targets for recording chargeable time, the recovery of chargeable time and billing. All too often Kain Knight find that even where there are targets work that is billable is left in filing cabinets to gather dust. Busy fee earners are trained to deal with clients and their problems; they want to get on with the next case and not worry about costs.

Over recent years even the most unsophisticated firms have had to record and value work in progress, if only for the purpose of being taxed

6

Who’d be a Costs Judge?

Work in Progress – The Undervalued Assetcontinued . . .

The Loss of TimeFirms now set targets for the recording and recovery of time. Achieving the target becomes the objective for many fee earners. Then there is the inevitable loss of the odd phone call (that bloody man ringing just as I need to get to Court). These combine to reduce the recorded WIP on the file. At Kain Knight we believe that even the best time recorders loose between 10 and 15% of their time. We provide statistical reports to clients and these bear out the proposition:

Recorded WIP v Actual

Firm Recorded WIP

Actual WIP Variation

Firm A £110,000 £175,000 159%

Firm B £170,000 £205,000 121%

Firm C £71,000 £95,800 135%

Total £351,000 £475,800 135%

The statistics are illustrative of a quarter’s examination of the bills prepared by Kain Knight for three firms. Analysis by fee earner showed that in Firm A there was a high billing fee earner who was not recording time adequately. Whilst this produced unexpected profit (and saved in year tax) there is a clear problem when a calculation of the business is required.

Firm B figures are a more typical example of the variation that Kain Knight expects to see.

Firm C figures are those of an individual litigator who billed on an ad hoc basis, and in accordance with what was felt reasonable, without reference to time recorded or to the Partners whose money he was giving away.The net result in each case was that the WIP figure was wrong.

Who’d be a Costs Judge?

Costs Masters were first appointed in the 16th century. Their function and work load varied over the years but as most Solicitors only dealt with property matters, litigation was something that very few could afford and thus the role of the Taxing Master was limited.

Life began to change after 1945 with the return of Solicitors from the services, the introduction of the Legal Aid Scheme, great prosperity and social change. Far more Solicitors had little or no inherited money and they were willing to undertake what ever legal work their clients needed.

By 1973 the number of Taxing Masters increased to eight which remains the number today. Taxing Masters were given the title Costs Judges in 1999 but are still addressed as “Master”, even the female Cost Judges.

Master Church lasted one day in 1877, although it is not clear why that was so. Chief Master Hughes-Onslow jumped out of a third floor window in 1932 and upon regaining consciousness a few hours later, dragged himself back to his flat where he turned the bath on and slashed his wrists. Chief Master Gibbon swam out into the Mediterranean in 1952 and was never seen again.

It’s a tough job but someone has to do it!

Balance Sheet ImplicationsThe implications for a firm on a retirement, sale or merger when valuing the business are substantial. To examine the problem let us consider a two Partner firm where the equity is equal and one principal is to retire:

Recorded WIP v Adjusted

Year Recorded WIP

Adjusted WIP

Variation Loss to Retiring Partner

Firm A £110,000 £175,000 £65,000 £32,500

Firm B £170,000 £205,000 £42,000 £21,000

Firm C £71,000 £95,800 £50,000 £25,000

Average £117,000 £158,000 £52,300 £26,150

It must be borne in mind that these figures deal in the main with litigious matters where time recording and recovery are a well developed necessity. High Street practices that rely on conveyancing and do not time record in that department will provide an even greater discrepancy and increased adverse effect on the Principal’s capital account.

ConclusionIt is axiomatic that the realisation of WIP is one of the key elements, with the collection of fees, in maintaining a positive cash flow. It is also true that the valuation of WIP in Solicitors’ practices has historically been an art rather than a science. Bringing these together Kain Knight have developed a specialism in preparing bills (which has been core business for 35 years) and in providing accurate, independent valuations of WIP for retiring principals and firms involved in mergers or sales. The result for the firm is increased billing coupled with faster realisation of WIP, a win/win situation on the day to day running of the practice and a true reflection of the worth of the firm on a retirement, merger or sale.

Anthony AbrahamsGroup Managing Director

7

Kain Knightfunding

KAIN KNIGHT are pleased to announce the launch of the new “ADVANCED COSTS FACILITY” in conjunction with ST HELENS LEGAL FUNDING.

This new facility will be available to new and existing clients specialising in: • Personal Injury

• Medical Negligence

• Criminal Defence

• MOD

• Financial Irregularity

This unique facility represents a major breakthrough in solving cash flow issues and poor liquidity experienced by a growing number of law firms due to outstanding costs.

Key features include;

• Fast and easy to use

• Simple documentation

• Does not impact on existing bank facilities

• Payout within 48hrs

• No personal guarantees

• No personal credit searches on partners

• No set up costs

• No minimum case load required

• No need to accept lower offers for early settlement of costs

If you would like to know more about this service then please contact Michael Kain of Kain Knight on 0800 678 3714 and quote reference ACF/SHF.

New officeBringing our expert knowledge of law costs to the Midlands in 2010.

To find out how you could significantly maximise recovery of costs and receive expert advice

Call us NOW!Tel: 0121 616 0233 and speak to Hector Harewood the Team Leader

Your costs questions answered

Our Costs Helpline is proving to be very useful to Solicitors up and down the country so we have decided to share some of the questions and answers with you.

(Q) Are the costs of the client attending Barristers conferences and Solicitor meetings during the course of the claim recoverable as a disbursement in the bill or should they go into the Schedule of Loss as Travel/Miscellaneous Expenses?

(A) In response to your line of enquiry, we can confirm that it pursuant to R v Legal Aid Board Area Office ex p Eccleston [1998] 1 WLR 1279 and the principles established in Atkins v Johnson Mathey and Co (1970)(Unreported November), a Litigant cannot recover the costs for attending upon his own legal advisor.

With most opposing Draftsman aware of the cited authorities, it is considered unlikely that the costs of the client attending Barrister’s Conferences and Solicitors

meetings will be recovered in the event of a Detailed Assessment. As a result, it may be appropriate at this stage to claim expenses in the Schedule of Loss and if not recovered there seek the same in a future Bill of Costs.

(Q) I have been asked to seek a Part 8 Declaration for a complicated Consumer Credit Act Claim (as to whether a credit card agreement is unenforceable). The balance on the card is just over £3,000. Does this mean we can only claim fixed (Fast Track) costs or because it is Part 8 declaratory relief would costs be assessed?

(A) Having looked at CPR Part 45.2 it would appear that this Claim would be subject to Fixed Costs as set out in the tabular form.

1, 2 and 4 PriorsLondon RoadBishop’s StortfordHertfordshireCM23 5EDTel: 01279 755552Fax: 01279 755936DX: 50405 Bishop’s Stortford

Carpenters’ Hall 1 Throgmorton Avenue London EC2N 2JJTel: 0203 215 1011Fax: 0207 374 6265DX: 138760 Cheapside 2

Regis House9, Dane John WorksGordon RoadCanterburyKentCT1 3PPTel: 01227 786499Fax: 01227 786665DX: 5310 Canterbury

1, Victoria SquareBirminghamSB1 1BD

Tel: 0121 616 0230Fax: 0121 616 0555DX: 715357 Birmingham 78

contact us: Head Office: Also at:

Disclaimer Consistent with our policy when giving comment and advice on non-specific issues, Kain Knight cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems it is recommended that professional advice be sought from your normal contact.

Another new division for the Kain Knight Group

8

Why not sign up for our free monthly e-zine which will let you know of any ground breaking costs new as it happens.

Contact Penny Ridoutt by email at: [email protected]

Very rarely will you see us“blowing our own costs trumpet”. Recommendations have been the life blood of our Company over the years and we would like to extend our thanks to those of you who have kindly recommended us in the past.

However…. It is now Company policy to thank the “recommenders” if you have occasion to sing our praises to a colleague and they instruct us. If so please ask them to let Penny Ridoutt know as we would really like to send you a token of our appreciation.

Joke of the day...The other day I bought myself some sensible walking boots and a little rucksack, and went up to the lake district.. Walked for about 5 miles, stopped and sat on a stone wall and had a flask of coffee. Then I walked for another 5 miles and had a biscuit and then I ……

Sorry I’m rambling

Monthly e-zine“Send a Present To a Friend”

Established in 1976, Kain Knight’s aim has always been to help Solicitors maximise their costs recovery through a complete, integrated costs service. To this end Kain Knight now has its own dedicated advocacy department, Kain Knight Advocacy.

Kain Knight Advocacy is based in Kain Knight’s central London office, near to the Senior Court Costs Office, with excellent transport links to the rest of the country. Our Advocates accept instructions to appear in Applications and Detailed Assessment hearings throughout England and Wales and will provide you with a detailed written report of the outcome of your hearing within 24 hours.

Our Advocates are legally trained, have undertaken Kain Knight’s rigorous in-house training and have extensive practical advocacy experience in the High Court and County Courts nationwide.

Whether or not Kain Knight has been involved in the preparation and presentation of your bill, Kain Knight Advocacy is dedicated to achieving the best result for you on Detailed Assessment so why not take this opportunity to find out more. To book a hearing, or for any general enquiries, please contact Vicki Kain-Smith on 0800 678 3714.

KAIN KNIGHT ADVOCACY: a cost effective solution to your Detailed Assessment needs

We are pleased to announce the establishment of Kain Knight Advocacy, a dedicated costs advocacy service based in the prestigious Carpenter’s Hall in the heart of London