A report from Just Costs solicitors derived from a study of 120 cases it dealt with, claims that Lawyers are exceeding their costs budgets in Civil law cases and overspending in the vast majority of cases.
Spending overruns affected nearly 90 per cent of cases where costs management orders have been made since they were implemented, with overspending on every phase of civil litigation.
The total amount overspent across all the cases was £456,500, with the largest single amount being over £31,000. “Major overspends” were most prominent at the case management conference and ADR phases.
The type of case included personal injury, clinical negligence and commercial, and the size of budgets ranged from just under £30,000 to over £300,000.
“There is a clear failure to comply with the civil procedure rules and keep within the ordered amount on a phase-by-phase basis,” said Phil Bradbury, of Just Costs Solicitors.
Bradbury said that the findings demonstrated a serious “lack of understanding” of the rules by lawyers and other legal profession fee-earners. “It is still a common misconception,” he said, “that if you are within your total agreed budget figure, but out on a phase-by-phase basis, then you are fine to proceed with your case. The rules clearly state this is not correct.”
Lawyers are notoriously bad at costs budgeting, which is why the rules were introduced. Clearly, the best way of avoiding excessive legal costs is to mediate at an early stage in proceedings and take back control.