Costs conundrums in court

Costs lawyers have hit back after several “ambush” challenges to their right to conduct costs litigation in court.

The Association of Costs Lawyers (ACL) said costs lawyers have, on several occasions, been met by challenges to their right to conduct litigation. These were based on the fact costs lawyers are regulated on an individual not an entity basis, and may be employed by a non-regulated organisation or be in partnership with a non-regulated individual.

The ACL has obtained counsel’s opinion from Roger Mallalieu of 4 New Square confirming that costs lawyers have an absolute right as conferred on them by the Legal Services Act 2007 to conduct costs proceedings, regardless of the circumstances in which they are retained or employed. The association is keen to hear from costs lawyers who may have experienced such a challenge, with a view to establishing a precedent.

Sue Nash, ACL chair, says: “There is no basis in law for these challenges. They are probably part of the technical, tactical challenges made generally post-Mitchell, but they are often done as an ambush, being raised at a hearing. They have been dismissed but there has been no ruling on it. We are concerned to head these off at the pass.”

The Costs Lawyers Standards Board is currently consulting on proposals to introduce entity regulation next year. 

Meanwhile, the Court of Appeal heard three linked appeals on Lord Justice Jackson’s civil costs reforms this week, which could potentially reset the dial on the Mitchell costs sanctions decision.

NLJ columnist Professor Dominic Regan, who assisted Jackson LJ in his costs review, says: “I am utterly certain that the Mitchell guidance will be recast. 

“Lord Dyson MR said late on Monday afternoon that the evident confusion warranted this. All members of the court stated that ultimately one had to look to the Rules. For example, trivial/serious form no part of CPR 3.9.

“The new, firmer approach is not going to be abandoned but greater clarity ought to avoid silly points and satellite litigation. It was appreciated that paranoia over slips and the lack of co-operation was damaging.

“Sir Rupert [Jackson] was keen to emphasise the need to look at all circumstances of a case. Yes, the explicit factors are important but not the be all and end all.”