Alan Shatter (Dublin South, Fine Gael) | Oireachtas source

I move amendment No. 190:

In page 80, between lines 35 and 36, to insert the following:
“Application for adjudication of legal costs

94.(1) In a case where a person is ordered by a court, tribunal or other body to pay, in whole or in part, the legal costs of another person, the person whose legal costs are to be paid by reason of that order shall furnish a bill of costs to the person who is the subject of the order to pay the legal costs, in a form and manner consistent with—
(a)the terms of the order,
(b)this Act, and
(c)any rules of court relating to the preparation and furnishing of bills of costs in a case to which this subsection refers.
(2)Where a person who is the subject of the order to pay costs receives a bill of costs prepared in accordance with subsection (1), that person may, having attempted to agree the bill of costs with the person referred to in subsection (1), apply to the Chief Legal Costs Adjudicator for adjudication on any matter or item claimed in the bill of costs.
(3)Where a person in whose favour the order to pay costs has been made issues a bill of costs prepared in accordance with subsection (1), that person, having attempted to resolve any dispute regarding the bill of costs with the person who is the subject of the order, may apply to the Chief Legal Costs Adjudicator for the bill of costs or any matter or item in the bill of costs to be adjudicated upon.
(4)Where a legal practitioner provides a bill of costs in accordance with section 92*to his or her client and the client considers that any matter or item or the amount charged in respect of any matter or item in the bill of costs is not properly chargeable, taking account of the provisions of this Act, and any rules of court relating to costs payable to legal practitioners by clients, the client may apply to the Chief Legal Costs Adjudicator for the bill of costs or any matter or item in the bill of costs to be adjudicated upon.
(5)(a)Where a legal practitioner provides a bill of costs in accordance with section 92*to his or her client and the bill of costs or any part thereof remains unpaid on the expiry of a period of 30 days from the date on which the bill of costs was provided, the legal practitioner may apply to the Chief Legal Costs Adjudicator for the bill of costs or any matter or item in the bill of costs to be adjudicated upon.
(b)Where a barrister has, in accordance with section 92(8)*, provided a bill of costs to a solicitor, and the bill of costs or any part thereof remains unpaid on the expiry of a period of 30 days from the date on which the bill of costs was provided, the solicitor concerned may, with the consent of the barrister, apply to the Chief Legal Costs Adjudicator for the bill of costs or any matter or item in the bill of costs to be adjudicated upon.
(c)An application to the Chief Legal Costs Adjudicator pursuant to paragraph (a)or (b)may not be made after the expiry of 12 months after the date on which the bill of costs concerned was provided to the client under section 92*.
(6)Where the legal practitioner applies for adjudication pursuant to subsection (5), the legal practitioner shall indicate whether or not he or she is aware of any dispute regarding an item in the bill of costs and if so aware the matter to which the dispute relates.
(7)Subject to subsection (8), an application to the Chief Legal Costs Adjudicator by a client pursuant to subsection (4)may not be made after the expiry of 6 months after the date on which bill of costs concerned was provided to the client under section 92*, or 3 months from the date of payment of the bill of costs, whichever first occurs, so long as the bill of costs is in a form and manner consistent with—
(a)this Act, and
(b)any rules of court relating to the preparation and provision of bills of costs by a legal practitioner to a client.
(8)Where a bill of costs has been provided by a legal practitioner to his or her client and the legal practitioner has agreed to accept a lesser amount in discharge of the bill of costs which lesser amount is paid, neither the legal practitioner nor the client may make an application to the Chief Legal Costs Adjudicator for adjudication of the bill of costs under this section.
(9)A legal practitioner who has provided a bill of costs in accordance with section 92*to his or her client may apply ex parteto the High Court or to a Legal Costs Adjudicator for the abridgement of the period of 30 days referred to in subsection (5)and, where it appears that it is just to do so, the Court or the Legal Costs Adjudicator, as appropriate, may grant an abridgement of that period.
(10)Rules of court may make provision for—
(a)the giving of notice of the application for adjudication to other parties or to such other persons as the Chief Legal Costs Adjudicator shall direct,
(b)the furnishing of documents, records and vouchers to the Chief Legal Costs SECTION 94 Adjudicator or to other parties to the adjudication,
(c)the circumstances and manner in which written submissions are to be provided for the purposes of an adjudication, and
(d)the steps that may constitute an attempt, by a person referred to in subsection (2)or (3), to agree a bill of costs, and the certification by a Legal Costs Adjudicator that the person has made such an attempt.
(11)An application under this section shall be in a form specified by rules of court or, as the case may be, under section 105(1).”.
This amendment relates to section 94 and provides for applications for the adjudication of legal costs to a legal costs adjudicator. It is primarily intended to make improvements to the flow and practical workability of the section. The key amendment is found in subsection (5) which now includes subparagraphs that provide for a solicitor to make an application to the adjudicator in relation to a bill of costs provided by a barrister, which bill remains unpaid in whole or in part by their mutual client. This is in recognition of the fact that usually the business flows from the client to the solicitor to the barrister and not directly from the client to the barrister. Therefore, it makes sense that the solicitor should be able to make applications where this is the case. This will not be true in all cases as there is some direct access to barristers by clients such as architects, engineers, etc. Subsection (10) includes a couple of small additions to allow for rules of court to provide for the manner in which written submissions may be provided and the steps that may constitute an attempt to agree a bill of costs before having recourse to the adjudicator.
On section 95,some duplication has been removed and some minor improvements are being made to the text. The section continues to provide for the matters to be ascertained by the adjudicator in the course of an adjudication such as what work was actually undertaken by the legal practitioner, what would constitute a reasonable fee for that work, how long it took to do the work and whether it was appropriate in the circumstances that a charge was made for the work concerned.
Section 96 provides for the powers of the legal costs adjudicator to inspect documents, summon and examine witnesses, apply to the High Court for the enforcement of a summons and to adjourn hearings so that disputes may be referred to mediation or another informal resolution process, where appropriate. A new addition to the section, which had been intended at the time of publication of the Bill, is a provision that adjudications shall continue to be held in public unless the adjudicator is of the opinion that it is in the interests of justice that part or all of the hearing should be heldin camera. Discretion is also being given to the adjudicator to conduct an adjudication without an oral hearing where it is expedient and in the interests of justice, but only with the consent of the parties.
The Chairman will have received a note from the Bills Office in relation to changes that had to be made to cross references withinsection 97. I trust those references are now in order. The section provides a detailed framework for the hearing and determination of legal costs adjudications. It includes a provision that the determinations will be made subject to the legal costs principles set out in the Schedule. It provides that fees for disbursements and other fees must be furnished with receipts and other documentary evidence and that any item not previously flagged to the client in the notice of costs will not generally be chargeable by the legal practitioner. In a departure from the current taxation process, the section also provides that the adjudicator shall write a report of the adjudication, setting out his or her reasons for the determination upon the request of a party or where it is considered to be in the interests of justice. The latter is intended to bring greater transparency and consistency to the legal costs process.
Section 98 provides for the effect of a legal costs adjudicator’s determination, including a modernised version of the long established, so-called “one-sixth rule” whereby the costs of the adjudication process will be charged against any legal practitioner who is found to have issued a bill of costs that is determined by the adjudicator to be at least 15% higher than it should be. I have received written representations from lawyers’ representatives asking me to increase that margin to at least 20% but I am of the view that 15% is appropriate and fair, representing as it does a less than 2% tightening of the traditional margin. The key amendments being made to this section are: the insertion of a 20-day grace period before the adjudicator’s determination becomes final, which I will discuss further later; an amendment to clarify that the 15% rule applies only to legal costs charged by a legal practitioner to his or her own client, as opposed to “party & party” costs; and the insertion of a new subsection to allow for the costs of the adjudication to be offset against the aggregate amount owed to the legal practitioner as determined by the adjudicator.
The possibility of a referral of a question of law to the High Court in the original section 99 remains unamended. Section 100 is entirely new and is inserted here to reflect current practice in the Taxing Master’s office whereby an objections procedure allows the Taxing Master to briefly reconsider disputed legal costs determinations. This is a commonsense filtering mechanism which works well in practice and helps to keep the number of referrals to the High Court lower than they would otherwise be. This, of course, is desirable. Parties seeking to utilise this mechanism must do so within 14 days of the determination, thus ensuring that proceedings are not drawn out.
Section 101 provides for a review of a determination of a legal costs adjudicator. This is a slightly amended version of the original section 100 of the Bill as published. The key change is a change in terminology from "appeal" to "review" to accurately reflect the process intended by this section, which gives the court power to confirm the determination of the adjudicator, to remit the matter to the adjudicator for another determination in line with the court’s decision or to substitute its own determination for that of the adjudicator. The only other change is the insertion of a new subsection (5) to carry over the "test" already provided for in section 27 of the Courts and Court Officers Act 1995, but inadvertently omitted from this Bill, whereby the High Court must first be satisfied that an adjudicator has erred in his or her determination to the extent that it is unjust before the High Court will allow a review of that determination.
The original sections 101 and 102 in relation to privilege and the power for the chief legal costs adjudicator to specify the form of documents required for the purposes of this Part, have not been amended. Sections 106 to 109, inclusive, of the original Bill are standard, transitional provisions to ensure a smooth hand-over from the Taxing Master’s office to the new office of the legal costs adjudicator. The only amendments here are found in section 106 and are purely technical in nature.
Amendment No. 198 is the final amendment.Schedule 1 of the Bill provides for the principles relating to legal costs to be applied by legal costs adjudicators when making determinations on disputed bills of costs. The key principles are that only those costs that have been reasonably incurred and are reasonable in amount will be permitted. In considering what might constitute a "reasonable amount", the adjudicators will consider a number of relevant factors, including, for example: the complexity and difficulty of the legal work concerned; any relevant skill or specialised knowledge applied; the amount of time and labour spent on the work; and the number and complexity of the documents that were required to be drafted or examined. The key changes made to this Schedule from the published Bill are the deletion of subparagraph 1(c), which was recommended for deletion by those with expertise in the legal costs area, and the deletion of the original subparagraphs 2(l) and (m), which are considered unnecessary. The latter have been replaced with a new subparagraph 2(l) to cover the use of outside expertise in the legal services provided and whether such costs were necessary and reasonable.