For most clients, or potential clients, there are two inescapable questions:

• If I lose will the solicitors come after me for their costs?
• If I win, will the solicitors take a chunk out of my damages to pay their costs?

If we could a categorical one word answer to these two questions our lives as solicitors would be a lot easier. Sadly this is simply not possible. Our Terms & Conditions of Business do aim to answer these two questions, as well as many other questions relating to costs.

But the truth is that even though the rules relating to the payment of solicitors’ costs have been brought more up-to-date, absurdly ancient legal principles still control how we are paid.

The key legal concept is known as the indemnity principle. It is the source of considerable debate by lawyers and academics. It may not be from the Dark Ages but it is certainly from the time before typewriters existed, let alone computers. It is a legal concept more applicable to quill pens and ink wells. Nevertheless, as solicitors regulated by the Solicitors Regulation Authority, with a book of Professional Conduct Rules 100s of pages long, we are stuck with it for the time being!

Without going in to all the interminable details, a simplified answer to the two questions is:

• If we fight the case and lose, we will not ask you, the client, for our costs
  unless
  we have lost because you, the client, did not act in good faith (we were misled or we were told us lies).

  If this happens, we shall certainly want to be paid our costs and we shall pursue the payment of our costs by all proper means. Although this does happen once in a while, it is very rare indeed.

• If we win the case, the other side pay our costs – which means that unless something has gone wrong, or there are very good reasons that we have brought to your attention, we will not charge any of our costs against your damages.

A further consideration is the operation of Legal Expense Insurance (LEI). It will be a very unusual case when there will not be in place either LEI which was provided by the motor insurer, household insurer, or broker, or After The Event Insurance (ATE) that we have arranged.

The purpose of LEI or ATE is to protect against the risk of having to pay legal costs whether you win or lose the case.

Article posted on Wednesday, February, 9th, 2011 at 3:25 pm

Have your say!