Client Care and Costs

Question 1

Whats the guidance of info of costs?

Answer 1

No guidance, Solicitor should expressly explain how fees are calculated & when they are likely to be charged

Question 2

If precise figure not possible, it will be wise for Solicitor & client to agree with either:

Answer 2

(a) celling figure - alone which S’s cost cannot go, without clients permission
(b) Review date when parties will revist the cost position

Question 3

What must S not forget to include in a hourly rate or Quote?

Answer 3

VAT

Question 4

How could a solicitor provide a competent level of service?

Answer 4

Discussing whether the potential outcome of the matter are likely to justify the expense or risk involved

Question 5

what is the client care letter?

Answer 5

After first interview S will provide details of what work will be carried out, fee structure …

Question 6

Consumer Contract Regulations?

Answer 6

Solicitors’s need to ensure that if they are likely to enter into contracts in different types of circumstances (on & off permises) their standards letters contain any additional into required under the Regulations
- Legal Aid contract does not fall within Regulations

Question 7

Why is a diction made between ‘contentious business’ & ‘non-contentious business’?

Answer 7

When considering whether client can challenge the bill of a solicitor

Question 8

Why is the difference between ‘contentious business’ & ‘non-contentious business’?

Answer 8

contentious business - Work done in relation to proceedings, starts once proceeding have been issues

non-contentious business - Involves legal matters where there is no dispute or disagreement between parties e.g commercial drafting work

Question 9

Options available for solicitor’s fees?

Answer 9

• Hourly rate
• Fixed fee
• Variable fee
• Other methods - shares

Question 10

What is the variable fee? and give examples?

Answer 10

Charge a fee which varies according to the outcome of the matter.
Conditional fee agreement -> no win, no fee
Damage based agreement

Question 11

What kind of legal work cannot be subject to a conditional fee agreement?

Answer 11

Any criminal work or family proceedings

Question 12

What does conditional fee agreement provide?

Answer 12

Client may not be liable to pay their solicitor’s fees, they will usually have to pay disbursements such as court fees, barristers’ fees and VAT. The client may also have to pay the opponent’s costs

Question 13

What does Damage based agreement provide? And what are the rules?

Answer 13

if client recovers damage, the solicitors fee is an agreed percentage of those damages

Cannot stipulate payment exceeding 50% of the total sums recovered by the client, including VAT

In personal injury cases, there is a cap of 25% of the general damages recovered.

Question 14

Payments in solicitor account for contentious business and non contentious business?

Answer 14

Contentious business - solicitor may require client to pay a reasonable sum to solicitor on account of cost. If client does not pay within reasonable time, solicitor may terminate retainer

Non contentious business - no statutory right, where solicitor requires money on account before starting a matter, solicitor should make this requirement of the retainer

Question 15

What must be included in the solicitors bill?

Answer 15

• Bill must contain enough information for the client to be satisfied that the bill is reasonable, and also provide details of the period to which the bill relates.
  
• They must be signed by the solicitor or an authorized employee, or accompanied by a covering letter
  
• Delivery methods for bills include hand delivery, postal service, or email with client consent

Question 16

What is interim bill?

Answer 16

Solicitors may choose to invoice clients for work completed before a matter concludes, especially in prolonged cases like litigation.

Interim bills may be issued periodically throughout the matter to keep clients updated on costs.

Question 17

What are the 2 types of interim bills?

Answer 17

• statue bills
  -bill on account

Question 18

When may the statue bill arise even though it is rare?

Answer 18

2 ways it may rise: 
- Issuing bills during a “natural break” in lengthy proceedings has some legal backing, but defining what constitutes a natural break is unclear. Therefore, relying on this for statute bills should be avoided except in very clear cases.

- by agreement with the client, with the Law Society recommending this right be explicitly reserved in the retainer. Solicitors should specify payment time limits and reserve the right to terminate the retainer if bills are not paid.

Question 19

Whats the advantage and disadvantage of bill on account?

Answer 19

advantage
It does not need to represent the final figure for costs in respect of the work covered by it, so that when preparing the statute bill at the end of the matter the solicitor can assess a fair overall costs figure for all of the work done since the start of the retainer.

Disadvantage
unlike with an interim statute bill, a solicitor is unable to sue the client for non-payment of such a bill, and the client cannot apply to have the bill assessed. If the client does not pay the bill on account within a reasonable time then in contentious business the solicitor may terminate the retainer

Question 20

Interests on ‘contentious business’ & ‘non-contentious business’?

Answer 20

• non-contentious matters, a solicitor may charge interest on an unpaid bill from one month after its delivery, provided the client has been notified of their right to challenge the bill. The interest rate must not exceed that payable on judgment debts, currently set at 8%.

contentious matters, a solicitor can charge interest on unpaid bills if explicitly reserved in the retainer or agreed upon later by the client. Alternatively, if the solicitor sues the client for non-payment, the court can award interest on the debt under specific legislation.

Question 21

Can a solicitor enforce payment?

Answer 21

Enforcement of costs recovery typically requires waiting one month after bill delivery, except in exceptional circumstances like client departure or bankruptcy, where the High Court may allow immediate action.

Question 22

when may a client apply for court to asses the bill?

Answer 22

Both contentious and non-contentious proceedings, a client can request the court to assess a bill, commonly known as ‘taxed’.
This request must be made within one month of bill delivery. If not made within this timeframe, the client can still apply within 12 months but will need court permission.

Question 23

When must a cost officer inform the SRA?

Answer 23

When they reduce the amount of the costs by more than 50%

Question 24

What should a solicitor do if they have properly accounted to the client for a finical benefit received (commission)?

Answer 24

They could
- pay it to the client
- offset it against the fees
- keep it where the client has agreed to this