Solicitor’s Failure to File Statement of Costs Risks Negligence Claim

A recent case in the High Court, before Mr Justice Mostyn in Kuznetsov, R (On the Application Of) v London Borough of Camden [2019] EWHC 3910 (Admin), has held that a solicitor’s failure to file a statement of costs before a hearing, meant that his client was not able to recovery the costs of his litigation. The case serves as a warning to solicitors, as in circumstances where a solicitor fails to file a statement of costs before a hearing or trial, and their client suffers loss as a result, then there are grounds for a professional negligence claim against the lawyer.

Solicitors are highly regulated and owe their clients a contractual, statutory and tortious duty of care to act in their best interests. We understand as lawyers where solicitors go wrong and where solicitors fail to act in their client’s best interests to effectively act upon their client’s instructions.

We specialise in providing expert legal advice on professional negligence claims against solicitors and all members of the legal profession.

Professional negligence claims against members of the legal profession tend to be complex in nature and argument. Professional indemnity insurers will often instruct a specialist City of London law firm to defend claims vigorously and therefore it is essential to take legal advice at the outset from our expert professional negligence team.

The facts

The claimant had sought judicial review of decisions taken by the defendant, the London Borough of Camden, that he did not qualify for the allocation of housing under Part 6 of the Housing Act 1996. This judgment considered the application made by the claimant for the court to reconsider a decision by Upper Tribunal Judge Markus QC, sitting as a High Court judge, on 27 September 2019 made on paper (that is to say without a hearing) dismissing the claimant’s application dated 23 May 2019. That application of 23 May 2019 sought to set aside a costs order made on 16 May 2019 whereby the claimant was ordered to pay the defendant’s costs summarily assessed in the sum of £11,614.20.

Solicitor’s failure to file a statement of costs

The judge found that in circumstances where the court is charged with a duty to bring closure by summary assessment, and where there is a positive duty to file a Form N260 Statement of Costs, the legal advisers failed to do so.

In relation to the costs of today, the hearing being listed for one hour (possibly shorter but definitely not more than a day), the London Borough of Camden should have been well aware that the court would endeavour, as is its duty under CPR PD 44 para.9.2(b), to summarily assess, and it cannot summarily assess unless Form N260 is filed 24 hours beforehand. Paragraph 9.5 says:
“(1) It is the duty of the parties … to assist the judge in making summary assessment of costs in any case for which para.9.2 above applies, in accordance with the following sub-paragraphs.”
Then it says what it must do. Then it says:
“(3) The statement of costs should follow as closely as possible Form N260…”
That has not happened.
It is my practice in such circumstances, where the court is charged with a duty to bring closure by summary assessment, and where there is a positive duty to file a Form N260, the legal advisers having failed to do so they, having made that bed, must lie in it and they will not get an award of costs. In relation to today there will be no order as to costs.

Mr Justice Mostyn in Kuznetsov, R (On the Application Of) v London Borough of Camden [2019] EWHC 3910 (Admin)

Download the High Court Judgment

Sanctions for failure to file statement of costs or costs budget

The solicitor’s failure to file a statement of costs before the hearing, meant that his client was not able to recovery the costs of his litigation. Where clients suffer a loss as a result of a solicitor’s error, then there are grounds for a professional negligence claim against the lawyer.

Common Examples of Solicitor Negligence

Examples of common claims against solicitors, barristers, patent attorneys and licenced conveyancers include:

  • Failing to provide correct legal advice: a claim can be brought if a lawyer has provided a negligent legal opinion, relied upon by a claimant, which has led to personal or financial loss.
  • Failing to fully investigate or properly evidence the claim: solicitors and direct access barristers may be negligent in not gathering all pertinent information to ensure a claimant’s case is successful e.g. by not obtaining witness statements which supports the version of events.
  • Failing to fully warn the client on the risks: for example a solicitor will be negligent if a specific risk warning that a tax avoidance scheme might fail.
  • Missing a limitation date leading to a claim becoming time-barred: if the original claim had merit, then a claimant is entitled to pursue the errant solicitor or law firm for their loss of chance of success in the claim.
  • Failing to comply with a court order or deadline: if your claim has been struck out by the court after your solicitor or barrister breached an order of the Court (e.g. an unless order), then you may have a claim against the legal professional for poor performance of the litigation.
  • Poor performance of instructions: failing to adequately investigate title to property when acting for the buyer of a property; failing to advise on burdens affecting a property e.g. restrictive covenants, adverse rights burdening the property, failing to register a mortgage/debenture at Companies House if acting for a buyer client company.

Can I challenge my solicitor’s bill?

In addition, unlike many other law firms, we have an experienced legal costs team, who specialise in challenging the reasonableness of bills/invoices rendered by your previous solicitor. We find that in many professional negligence claims, clients are not happy with the service they have received and in tandem the price that they have paid for the sub-standard work completed.

If you consider that your bill (i.e. invoice) is overpriced for the work that you instructed to be done, our expert costs team can help you to understand the reasonbaleness of the bill(s) and if appropriate, challenge the bill in addition to any professional neglgience claim.

Can I challenge my solicitor’s bill and start professional negligence proceedings?

This is a relatively contentious area. Challenging a bill is commenced in the Senior Courts Costs Office (SCCO), whereas commencing professional negligence proceedings (if the claim is for more than £100,000) is in the High Court.

One of the Court’s overriding objectives in the Civil Procedural Rules is to save time and expense. The Court generally do not condone claimants commencing parallel proceedings and if costs proceedings are commenced in the SCCO, and the pre-action protocol for professional negligence is ongoing, the SCCO will likely order a stay of the costs proceedings in order to enable the parties to comply with the pre-action protocol for professional negligence. However, this varies depending on the individual facts of a case.

No win No fee for solicitor and own client costs disputes

We specialise in costs disputes at the Senior Courts Costs Office (SCCO) proceeding under the Solicitors Act 1974. That is why we can offer a no win no fee agreement to clients once we have had sight of the relevant papers (and ideally a detailed bill of costs). This means you do not have to pay us anything should your solicitor’s bill not be reduced.

We will advise you on the merits of reducing your solicitor’s invoice. Discuss the merits of early protective without prejudice settlement offers. We draft Points of Dispute (for clients) and Points of Reply (for solicitors). We will Represent you at any directions hearing, preliminary issues hearing and the detailed assessment hearing before the SCCO.

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We are a specialist City of London law firm made up of Solicitors & Barristers operating from the only law firm based in the Middle Temple Inn of Court adjacent to the Royal Courts of Justice. Our team have expertise in advising on claims for compensation against professionals that have fallen below the standard expected, which causes clients financial or personal loss. We are experienced in bringing successful claims against negligent solicitors, barristers, financial advisers, surveyors, valuers, architects, tax advisers and IFAs.

LIMITATION ACT 1980 – WARNING

The Limitation Act 1980 sets out strict statutory deadlines within which you must bring litigation claims. Your legal rights will become irreversibly time-barred if you fail to take legal action (or defend a claim on time). Therefore, you should seek specific legal advice about your legal dispute at the very first opportunity so that you understand the time you have left. Failure to take advice or delay in taking action can be fatal to your prospects of success.

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