Costs Estimates

Question 1

Costs Information
1. Rule 1.5(c) SRA Transparency Rules 2019 - to provide

Answer 1

Costs Information
1. Rule 1.5(c) SRA Transparency Rules 2019 - to provide experience and quals of anyone carrying out the work, & their supervisors

Question 2

Quotations and Estimates – Q&Es not explicitly referred to in Sols rules
2. Para 8.7 CoC for Solicitors, RELs and Para 7.1 RFLs & SRA CoC for Firms - provide

3. SRA Transparency Rules 2019 –
4. The Law Society’s position –
5. Ombudsman Guidance -

Answer 2

Quotations and Estimates – Q&Es not explicitly referred to in Sols rules
2. Para 8.7 CoC for Solicitors, RELs and Para 7.1 RFLs & SRA CoC for Firms - provide best possible info on likely overall price- at time of engagement/as matter progresses
3. SRA Transparency Rules 2019 – Make clear if client to make payment themselves (inc. out of damages). Some info must be available on website e.g. costs information under Rule 1 must be clear (e.g. probate fees), accessible, prominent on website
4. The Law Society’s position – Inform C immediately if estimate likely to be exceeded. To be bound by estimate? - Court will determine on case-by-case basis
5. Ombudsman Guidance - C should never be surprised by the bill and be crystal clear on charging structure

Question 3

Costs Lawyers
6. Principle 3.4 CL CoC (2018) – Explicit – must:-
- .
-
-
-
-
7. If work in house for SRA or CILEx Regulated firm - required to

Answer 3

Costs Lawyers
6. Principle 3.4 CL CoC (2018) – Explicit – must:-
- provide new clients with costs estimate.
- be in writing and
- set out details of the charging structure
- inform client if costs’ estimate becomes inaccurate
- inform of right to complain
7. If work in house for SRA or CILEx Regulated firm - required to comply with their requirements.

Question 4

Quotes v Estimates
8. Quotation = .
9. Estimates may

Answer 4

Quotes v Estimates
8. Quotation = fixed price.
9. Estimates may turn into quotations. To avoid risk, always treat a qualified estimate as a fixed price quotation

Question 5

Exceeding Quotations
10. Wong v Vizards - Ct will look at

11. Leigh v Michelin Tyre –
12. Garbutt v Edwards -
13. Mastercigars Direct Ltd v Withers LLP -
14. ## Key points On appeal:-

Tip on reliance…
15.

Answer 5

Exceeding Quotations
10. Wong v Vizards - Ct will look at whether any satisfactory explanation for breach. 15% margin for error on the facts of the case.
11. Leigh v Michelin Tyre – Estimate a factor to be considered/a yardstick in determining what was reasonable.
12. Garbutt v Edwards - Failure to give estimate - merely to consider whether this increased the costs over what they would have been if an estimate had been given
13. Mastercigars Direct Ltd v Withers LLP - Estimate had not been updated. Court held that retainer subject to s.15 SG&SA1982 - implied for reasonable remuneration.
- Where cost estimate exceeded - did not follow that would be restricted to recover estimate. Q was “what in all the circumstances is it reasonable for the client to be expected to pay?”
14. Key points On appeal:-
- estimate is not a quote - entitled to reasonable remuneration for work done (s. 15 SG&SA 1982;
- Ct may ‘have regard to’ estimate and is factor in assessing reasonableness
- No basis for permitting a margin on top of the amount of the estimate. Rather, the greater the margin by which exceeds the estimate, the greater the explanation needed;
Tip on reliance…
15. The longer an estimate is left unrevised, the more risk there is that C will come to rely heavily on it

Question 6

Costs Budgeting
16. CPR PD 44 para 3 - where CMO need to

No CMO? Need to

Answer 6

Costs Budgeting
16. CPR PD 44 para 3 - where no CMO and > budget by 20% or more, must provide a Statement of Reasons.

No CMO? Need to show good reason to depart

Question 7

Fixed Costs
17. Sols limited to FRCs unless
18. At outset, prudent to identify

Answer 7

Fixed Costs
17. Sols limited to FRCs unless written agreement that section 74(3) of the Solicitors Act 1974 does not apply.
18. At outset, prudent to identify probability of a shortfall to C as a result of fixed costs (or, for example, the proportionality test).

Question 8

Complaints
Some reasons client may wish to complain:
*
*
*
*

Answer 8

Complaints
Some reasons client may wish to complain:
*not being kept informed;
*inaccurate costs estimates;
*failure to file a budget on time and the applicable sanction;
*inaccurate or restrictive budgets

Question 9

Applications C can make
*
*
*
*

Answer 9

Applications C can make
* an application for delivery of a bill;
* an application for further information;
* an application to set aside a contentious or non-contentious business agreement;
* an application for assessment.