ACL proposes online portal for disputes resolution

The Association of Costs Lawyers (ACL) has proposed an alternative method to address lower-value costs disputes in the legal sector, arguing against the reliance on the Legal Ombudsman (LeO). The ACL suggests a pre-action protocol facilitated through an online portal where a panel of specialist lawyers makes preliminary decisions. This approach, they believe, would lead to more efficient and informed resolutions.

Highlighting the issues with the current methodology, the ACL expressed concern over the proposed overarching principle stating that costs should be ‘fair and reasonable’. They warned this principle risks creating a disconnect with the existing inter partes assessments. Their formal response to the Civil Justice Council’s consultation on reforms to the Solicitors Act 1974 pointed to a “fundamental lack of data” regarding solicitor-client assessments, which is critical to inform proposed changes.

The ACL emphasised that a primary goal should involve establishing "a readily understood, cohesive and streamlined procedure for the assessment of solicitor-client costs" rather than vague terminology. They proposed that the pre-action protocol requires early transparency and disclosure, stating “Members of our working group agreed that often solicitor and client disputes arose due to a lack of knowledge,” indicating clients may not always be informed about fee estimates or retainer agreements.

The CJC's recommendation that all costs disputes under £50,000 be managed by the LeO was met with scepticism from the ACL, which suggested that the LeO “lacks the requisite expertise and capacity to deal with costs assessments." Instead, they advocated for the creation of an online portal, similar to the Official Injury Claim portal, enabling parties to exchange information and proposals for settlement, thereby streamlining the dispute resolution process.

For unresolved disputes, the ACL proposed that qualified lawyers should provide preliminary determinations, with complex cases referred to court. In scenarios where parties contest these determinations, they recommended utilizing the current provisional assessment regime. The ACL cautioned against broadening the ‘fair and reasonable’ principle, explaining that “it significantly departs from the scope of the current Act and is contrary to orthodox jurisprudence.”

Furthermore, the ACL warned that extending this principle to contractual terms could inadvertently escalate the volume of solicitor-client assessments, suggesting instead that “Solicitors should be able to agree and rely upon specific contractual terms with prospective clients.” This would ensure clarity and maintain competition within the legal services marketplace.

In addition to these recommendations, the ACL outlined necessary changes to the Solicitors Regulation Authority (SRA) Code of Conduct, particularly pointing out its current neglect of practicalities related to costs. They also warned against introducing mandatory alternative dispute resolution (ADR) for costs disputes exceeding £50,000 without addressing the inherent imbalance faced by unrepresented clients.

ACL Council member Amy Dunkley remarked on the urgency for updating the Solicitors Act, stating “there is no doubt that the Solicitors Act needs updating but our analysis of the consultation paper shows omissions that need to be addressed”. She called for more action on the proposed model of a pre-action protocol that the ACL believes could be implemented without unnecessary delays.

Dunkley concluded by urging caution as the CJC considers potential changes to the statute, emphasising that “the Solicitors Act 1974 consolidates case law that has built up over 200 years.” The complexities of legal costs, she argued, require carefully constructed reforms, and the ACL remains available to assist in the process.