Costs Information to the Client | LPC Help

3.1 Costs Information to the Client

Our experts have prepared these LPC notes on costs and the information you should give your clients under the Solicitor’s Code of Conduct 2007. If you would like one of our LPC-qualified experts to prepare a fully custom essay or an LPC coursework assignment for you, click here to place your order. Our LPC-qualified team can also draft clauses and contracts for you.

Solicitors are required, upon instruction, to give the client a realistic view as to the likely costs of pursuing their particular case and the options available for funding it. Obligations in this area are placed upon solicitors by virtue of the Solicitor’s Code of Conduct 2007.

The code of conduct sets out mandatory rules that solicitors are required to follow. Since the Code has statutory force, breach of any of the provisions are treated extremely seriously. A solicitor in breach of the Code may be required to pay damages and may face disciplinary measures including a fine, suspension or being struck off. In addition, a client may bring an action in negligence.

The Solicitor’s Code of Conduct 2007 – Rule 2

Rule 2 sets out the information that solicitors are required to give to their clients in relation to costs.

Rule 2.03 (1)

This requires the solicitor to advise clients of the basis of their fees and charges. They must be kept informed of any rate increases as well as being told about any payments that will need to be made to others, for example, expert witnesses.

Solicitors are required to discuss with their client how they intend to pay. This should include consideration of whether the client is eligible for public funding and if not, whether their costs can be met by other means such as insurance or whether they can be paid for by an employer.

The client’s costs are not the only consideration, however, since they may be required to meet some or all of the costs of the other side. Again, this may be covered by insurance but otherwise, they should be advised of the possibility of taking out insurance to cover this eventuality.

Clients should further be advised that there are circumstances when a solicitor may be able to exercise an equitable charge or lien over the case file. This will entitle the solicitor to retain the file until full payment has been made .

Rule 2.03 (2)

If the solicitor is acting for a client under a Conditional Fee Agreement (CFA), they are obliged to explain to the client, both upon instruction and as the need arises, the circumstances under which the client will be required to pay their costs. If a solicitor wishes to seek payment from their client, they must inform them of this and in addition, the client must be told that they have a right to an assessment of the costs being sought.

Rule 2.03 (3)

If the client is publicly funded, the solicitor is required to explain to them when the client may be liable to pay their own costs, the nature of the statutory charge, the client’s duties to pay contribution and the consequences of not doing so. They must also be advised that even if they win the case, a costs order may not be made against the other party or alternatively, even if a costs order is made, the other party may not be able to afford to pay them.

Rule 2.03 (4)

The client should be informed, in the event that a solicitor agrees to split their fees with a charity, the client must be informed that this is the case.

Rule 2.03 (5)

All information pertaining to costs must be clearly confirmed in writing.

Rule 2.03 (6)

The risks of litigation in relation to costs must be discussed with the client, namely whether a case is worth pursuing in terms of whether the outcome will ultimately justify the risk and likely expense. Clients should be informed about the risks of having to pay the other side’s costs.

Rule 2.03 (7)

A solicitor may be exempt from Rule 2.03 (1) and 2.03 (5) if they can show that it was inappropriate in the circumstances to meet the requirements. In practice, this usually arises with regards to in-house solicitors or those carrying out repeat work for clients on previously agreed terms.

Practical Considerations Under Rule 2.03

The requirements of Rule 2.03 mean that solicitors should discuss fees and funding at their first meeting with the client. The client should be advised that generally, litigation is very expensive and that the usual rule is that the loser pays the winner’s costs. In line with the overriding objective, the client should be advised of alternative methods of dispute resolution. Similarly, proportionality should be kept in mind at each stage of the case and regular cost benefit analysis should be carried out.

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