There have been a significant increase in costs in the last few months. The Solicitors Regulation Act, 2015 was brought into operation in December 2019 and SI584/2019 (costs) is the relevant statutory authority on the matter.
The most significant changes include:
Legal Costs Adjudicators – the Taxing Master is now the Chief Legal Costs Adjudicator and he is assisted, at present, by one Legal Costs Adjudicator. There are plans for the addition of a third Legal Costs Adjudicator in the near future.
Tender/lodgement – the paying party can now tender, if a qualified party, or lodge, if not, monies in satisfaction of the plaintiff’s costs. This must be done within 21 days of receipt of the Notice of Adjudication. If the tender/lodgement is not beaten the plaintiff (in most cases) must pay the defendant’s costs (in most cases) from the date of the tender/lodgement. If monies were lodged into court, the balance will be returned to the party who lodged the monies.
New format bill – a bill for Adjudication must now be in the format as set out in SI584/2019 i.e. it must be broken up into four distinct sections as follows:-
Section A – pre proceedings work
Section B – work from commencement of proceedings to trial/settlement date
Section C – work carried out during the court of trial/settlement and up to determination of proceedings
Section D – post settlement work
Each section details not only the professional fees that were incurred during the relevant timeframe, it also details counsel’s fees and expert fees incurred during the same period.
Scheduled items – now referred to as Scales of Costs, these have been simplified and are set out in Appendix W of the new rules.
Increased level of professional fees – the Adjudicators are now obliged to allow fees in respect of work carried out pre-proceedings and also post-settlement work (Sections A and D). It is still the norm for parties to discuss the professional fee on the basis of one combined fee for all work done, due to the introduction of pre and post-settlement work allowances in Sections A and D, an increased level of fees is now being sought and on Adjudication, separate fees will be allowed for each section. Owing to the Covid19 restrictions, there haven’t been very many Adjudication stats however more have filtered through of late and to give you a flavour of the allowances on Adjudication please note the following:-
Section A – generally €2,500 – €3,500 is allowed; if the matter was very complex a higher fee would be achieved, but generally this seems to be the allowance.
Section B – this section deals with the bulk of the work from issuance of proceedings up to trial/settlement stage. This will obviously vary enormously between cases and the usual 10% + €6,500/€7,500 “rule of thumb” should be applied with additional allowances in respect of contributory negligence, multiple injuries, motions, unusual accident circumstances, additional defendants and so on.
Section C – deals with the briefing of counsel for settlement/trial, attending court for talks/trial, attending pre-trial consultation, attending for the order. €2,500 seems to be the allowance and naturally this would increase if the matter ran to a full trial, in which case you would want to allow €1,500 – €2,000 per day from day 2.
Section D – the post-settlement work which includes work in respect of taking up the settlement monies, taking witnesses off standby, gathering and collating fees notes and instructing a costs accountant. This fee is being allowed at €500 or thereabouts, increasing obviously if it was for example, a catastrophic injury case where a significant number of experts would be involved.
Contribution towards Costs Accountants’ Fees – the paying party must now contribute towards the fees of the successful party’s costs accountant. The level of contribution is running at 50% of the costs accountant’s fees. The usual basis on which a costs accountant will mark his/her fee is 10% of the agreed professional fee. So essentially, the contribution is 5% of the agreed professional fee that the paying party would be responsible for. In addition, it is anticipated that a further €500 would be allowed for the cost accountant in attending court for the adjudication. There would be similar costs implications if submissions are directed or if there are additional days in court for the adjudication.
Adjudication without an Oral Hearing – We have been receiving some requests for consent to adjudication without an Oral Hearing. These adjudications will be dealt with by Adjudicator O’Hanlon. There will be no representation on behalf of the Defendant at all at these adjudications and in the circumstances, it seems that it would not generally be prudent to consent to adjudication without an oral hearing.
If you enjoyed this article or have any more specific questions, you can contact Aileen Dolan, (Partner, Hayes McGrath LLP) or your usual relationship manager at Hayes McGrath LLP. This guidance document provides general information only and does not constitute legal advice.