As you are most likely aware, the Minister for Justice has recently published the Legal Services Regulation Bill 2011. Please click on this link to obtain a full copy of the Bill.
Parts 9 and 10 of the Bill deal specifically with Legal Costs and makes for some very interesting reading. The Taxing Masters’ Office is not to be abolished but rather it is simply morphing into what will be known as the Legal Costs Adjudicators’ Office. The Legal Costs Adjudicators will have all the powers currently held by the Taxing Masters and whilst they have a number of extra duties in terms of preparing business plans and reporting to the Minister on a yearly basis, the “Adjudication” process is broadly in line with how Taxations are currently conducted.
However, in addition to the existing powers and Rules of Taxation, the Legal Costs Adjudicator will apply without any discretion what will most probably be known as “the 15% Rule”. You may be aware currently of the “One-Sixth Rule” (Order 99 Rule 29 (13) RSC, which states any costs taxed on a Solicitor and Own Client basis, or any taxed costs are payable out of a liquidation or any fund or estate, if reduced by one-sixth or more will result in the Solicitor presenting those costs paying for the costs of Taxation including Stamp Duty at 6% and any opposition fee that may arise. It is proposed to extend this to normal Party and Party Taxations and the discretion which the Taxing Master currently has to apply or waive this rule will be removed. It is only right for this rule to apply to Solicitor and Own Client costs etc, however it may cause some difficulties, not to the Solicitors or Counsel or any expert witnesses, but to the Client, who is now restricted on what costs he or she can seek to recover on a party and part basis, which is very different from any other type of costs.
However on a positive note, it is interesting that a Solicitor no longer has to issue legal proceedings in the Courts to recover fees from their Clients and/or former Clients. A Solicitor will be entitled under the new Act if it comes into force, to simply set his/her Bill of Costs (drawn pursuant to Rules of Court) down for Adjudication before the Legal Costs Adjudicator. This is great news in the sense that the matter of recovering fees has become more simplistic, less costly, and furthermore saves the client and/or former client from any additional costs Order being made against them.
The practice that Junior Counsel is allowed a brief fee at two-thirds of the fee marked and/or taxed by Senior Counsel will now be outlawed and the Adjudication process will have to assess those fees on a fair and reasonable basis.
In terms of appealing the Legal Costs Adjudicator’s ruling, the current procedure of lodging Objections and Written Submissions will be abolished and it would simply be a matter of going before the relevant Court by way of Notice of Motion. Whilst this removes an extra layer of work in terms of lodging Objections back to the same Taxing Master it does open parties to a further Order for Costs by the Courts if an Appeal is undertaken.
These are just some of the main issues arising in terms of legal costs under the proposed Bill and whilst a Bill of Costs still has to be prepared pursuant to the same Rules of Court, the Taxation process which will now be known as an Adjudication process will broadly be the same. However the Chief Legal Costs Adjudicator will be obliged under the proposed Bill to actually publish the results of Adjudication the and reasons for same, which is something the current Taxing Master is not obliged to do by legislation.
If you have any further queries, please do not hesitate to contact McCann Sadlier and we will be happy to discuss the proposed Legal Service Regulation Bill with you.