Legal Ombudsman - May 2012

From what I see as ombudsman, the part I’m not yet convinced about is the latter. While costs feature in the complaints we see more than any other single area, we aren’t overrun by people who know their rights and demand that they are enforced. Instead, we see a lot of confused and upset people who simply wish to know where they stand. And I’m including a few lawyers in that – it’s very possible to receive a complaint about costs even when the legal advice you’ve provided is pukka.

So that is why, a few weeks back, the Legal Ombudsman published its first thematic feedback to the legal profession; about costs. We wanted to focus on the sorts of issues we are commonly seeing in the cases we look at. So we published some research on the trends in costs complaints, together with guides for lawyers and consumers about how to avoid costs complaints. The response was very gratifying: not only was the print coverage reasonably extensive – and very receptive – but the traffic on our website told us it was a worthwhile exercise, with the guides being downloaded at a significant rate. Nor was it just the print media who took the issue up: I also found myself spending the entire day dashing from TV to radio, from interview to interview.

Image problem

Spending hours in studios answering questions about my experience of the legal profession threw two things into stark relief. First, while there is still a huge amount of respect and admiration for what some lawyers do, there is a real issue about the image of lawyers and money. There were a number of occasions when I was being invited by the interviewer to buy into a popular belief that you can’t trust lawyers’ approach to money, that some of the profession are only interested in how much profit they can squeeze out of a client or a case. Second, barristers featured not at all in the debate; in the vast majority of the interviews I did, the words “lawyer” and “solicitor” were used interchangeably. Not one interviewer either on or off air raised the issue about how barristers approach charging.

Of course, it is true that costs complaints about barristers are very much a minority issue. That is for pretty obvious reasons. Direct access covers relatively few cases. Since the vast majority of legal service users get to a barrister via a solicitor, the bulk of costs negotiations – and therefore costs complaints – are with that branch of the profession. Even where issues of barrister costs arise, the intervention of the chambers and clerks process somewhat distances the barrister from the issue.

But none of this says that such costs problems don’t arise. Take these cases:

Miss A’s story

Miss A instructed a barrister to represent her in a criminal law case. At their initial meetings, the barrister set out an estimation of costs, which Miss A felt she could afford, particularly since the barrister was reputable and she wanted the best possible representation. However, as the case progressed Miss A received two invoices, the first of which included extra costs for services that hadn’t been alluded to in her initial consultation. The second invoice also charged Miss A for a service she had already paid for. Unfortunately, she hadn’t asked for a receipt when she made the payment.

Not only were the costs becoming muddled but Miss A felt the barrister was generally providing a substandard service in any case. She complained to the barrister who denied any wrongdoing and eventually she brought her complaint to us.

Following an investigation it was clear that the barrister had underestimated the costs slightly and that he had charged Miss A twice for the same thing. We instructed the barrister to refund £200 to cover the payment Miss A had been erroneously asked to pay and also waived an additional £150 costs, which were not accounted for in the initial estimate.

Mr B’s story

Mr B instructed counsel to represent him in an employment litigation case. Costs were estimated at the start of the case and Mr B asked his barrister to proceed on this basis. Following a successful case Mr B was awarded compensation by a third party, which the barrister recovered on Mr B’s behalf.

Further work was then required to enforce the judge’s decision. Mr B didn’t expect that any further work would be required and was subsequently reluctant to spend more money on the barrister. Mr B claimed that the possibility of enforcement was not mentioned when the original estimate was made.

As neither the barrister nor the complainant could agree on reasonable costs from this point they drew up a compromise agreement in order to proceed. However, at the end of the case Mr B complained to the Legal Ombudsman since he felt he had been misled by his barrister.

An investigation found that the cost advice given could have been clearer, although it was unrealistic for Mr B to believe that the barrister would have conducted enforcement work for no additional cost. The barrister was asked to pay Mr B £150 compensation for poor cost advice.

Moving goalposts

The point about these cases is that, even though barristers may have negotiated a fee at the outset, this was only the beginning of the process. By definition, most barristers are involved in cases involving litigation, the most volatile and least predictable of legal activities. Whereas lawyers dealing with, say, volume conveyancing or will writing can negotiate a fixed fee in the confidence that they will not prove far wrong in practice, those dealing with crime and divorce do not have it so easy. Things change, and when things change, so will costs. And if you have negotiated a fee upfront, it is no good issuing a significantly different bill at the finish of the case and expecting the client to pay up without a word. Many will pay. But just as many will exercise their right to challenge, particularly if the case has not gone the way they hoped.

Lessons for lawyers

So what are the lessons? In our guidance for lawyers, we suggest some principles which you can adopt if you want to avoid complaints (and all the cost associated with responding to those complaints, to say nothing of the potential criticism from my office). Not all of these will apply to barristers. But there are two easy steps you can take:

Be utterly explicit in what your service will cost, is costing, might cost and has cost. So many of the complaints about costs which we deal with could have been avoided had the lawyer just made more of an effort to tell the client how much the bill was likely to be. So give an estimate up front, but make sure that the client knows how that estimate might be affected if things go in a different direction. And when things do change, let the client know how that impacts on the likely cost of your service. Don’t do work in the expectation that the client knows already what the implications are for their bill; tell them and get their agreement.

Give your client choices.Law is expensive and while you may understand how easily bills can spiral upwards depending on the choices they make, your clients may not know (or, just as commonly, may not want to know – part of a lawyer’s job is often to save clients busy pursuing “a point of principle” or letting emotion overrule their brain from racking up a bill they just can’t pay). If you come to a fork in the legal road, tell them and inform them about the financial risks involved in their choice of direction. If they make the wrong decision, so be it, but they need to make that decision in an informed manner.

Barristers’ publications these days are full of learned articles discussing new financial models. Financial literacy is an increasing currency of the Bar. But in your exploration about how you make the Bar’s finances work more effectively, you need also to think about how you bring some of that financial acumen into improved service for your clients?

Adam Sampson, Chief Ombudsman and Chief Executive of the Legal Ombudsman.