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Counting the cost: lawyers warned over budgeting failures

View profile for Casian Sala

Counting the cost: lawyers warned over budgeting failures


Few lawyers have faced the post-Jackson legal landscape with total equanimity. The demands of keeping litigation costs down have proved an enduring preoccupation (not to say problem) for firms keen to ensure they don’t fall foul of the requirements – and yet deliver the highest possible standards of service for the client.


Not for nothing is the infamous ‘Precedent H’ costs budget document frequently referred to as ‘Preparation H’ – after all, it’s quite the sore point, and requires piles of paperwork (sorry).


A new survey conducted by Just Costs Solicitors demonstrates the importance of putting costs budgeting high up the agenda. It found that more than two thirds of the 912 commercial litigation partners surveyed reported incurring costs above the agreed budget level – but only 1 in 10 submitted the required application to revise the budget above the previously agreed cap.


Reasons for the increased costs are legion, of course: the most often-stated being ‘developments in litigation’ and ‘simple overspend’ (you don’t say). Paul Shenton, who oversaw the survey, spoke to the Gazette. “This research suggests the majority of solicitors are either unaware that a mechanism exists for budgets to be revised or believe any such application will automatically fail, so there is no point pursuing it.”


But, of course, there are inevitable consequences both for firm and for client. “If clients are paying, win or lose, this is a potential professional negligence issue. If law firms are limited to what they can recover, they are effectively working for free.”


Keen to obviate this risks, courts are sending out warnings to lawyers that a failure to conduct litigation within the agreed budget will result in costs being irrecoverable – effectively, a loss to the client.


Crucial to effective costs budgeting – not least keeping within the confines of the agreed budget – is close partnership working with litigation support partners such as the professionals at Legastat. A number of legal tech innovations have done much to cut back on costs, and the effective use of these innovations can stand between a lawyer and a potential professional negligence case.


The use of eDiscovery tech can vastly reduced the burden (and cost) of time spent on painstaking discovery, and eDisclosure and digital bundle innovations have proved transformative for the hard-pressed practice.


But it’s crucial to engage with litigation support professionals at the earliest stages of drawing up the budget – and well in advance of submitting Precedent H documentation. At Legastat, we understand the need to balance the demands of post-Jackson costs budgeting requirements with delivering the best possible service for clients – and are ready to work with you now.