Overcharging, Lawyer Speak and Customers

How far is it that lawyers have to go when explaining the component parts of a legitimate bill to ensure that their “customer” understands what they will be paying for?

Up until March 2011 the Legal Ombudsman had been contacted 38,155 times.  Of those emails, letters and phone calls, there were 3,768 accepted complaints for further investigation.  The statistics on the Legal Ombudsman website informs us that 10% of those complaints were in relation to “excessive costs”.  More recent statistics are not readily available but we are told that this figure has now increased by some 20% and complaints in relation to excessive costs account for one third of the complaints received.

The Chief Legal Ombudsman Tuesday morning, on the BBC Breakfast show, labelled words and phrases such as, “plus VAT plus disbursements” as confusing “lawyer speak”.  Is this truly obfuscatory language?

The birth of the Legal Ombudsman marked a clear shift in the relationship between client and lawyer.  This was particularly notable from the Ombudsman’s early press releases talking of lawyers and their customers.  This notion of a lawyer having a customer as opposed to client was, and remains, a foreign concept to many in practice.  However, an ever increasing number of complaints being lodged and investigated by the Ombudsman suggests that lawyers should be willing to acknowledge the tested words of Gordon Selfridge, “the customer is always right” …maybe sometimes, at least!

So how far is it that lawyers have to go when explaining the component parts of a legitimate bill to ensure that their ’customer’ understands what they will be paying for?

The SRA Code of Conduct prescribes certain outcomes that must be achieved by those in practice.  The Code states that clients are to receive the best possible information, both at the time of engagement and when appropriate as their matter progresses, about the likely overall cost of their matter.  Warning a client about payments for which they may be responsible, in addition to their lawyer’s fees, is one of the indicative behaviours of having achieved the ’best possible information’ outcome.

Disbursements, for I cannot imagine ’plus’ or ’VAT’ as being confusing, are such additional costs.  Lawyers would do well to explain by way of examples what such disbursements may be.

From what the Ombudsman was saying, it seems to me however, the main gripe of the client is related to significantly higher than expected final bills received in relation mainly to litigious matters.  Sadly, this area of the law, more so than most others, is notoriously difficult to predict.  An estimate of fees based on hourly rates is quite often the only option available to offer.  Disbursements, such as Counsel’s fees, can again only be predicted to an extent.  What if the matter settles at the first hurdle?  What if the matter settles on the steps of the court?  What if the matter goes to trial?  It is near impossible to predict the course of litigation.

In these challenging economic times, it is understandable that clients want as accurate an estimate of their lawyer’s costs as possible.  And in these challenging economic times, it is understandable that clients will want more bang for their buck, but the fact remains that lawyers are not psychics and there is only so much that can be predicted.

Ezra Smith, trainee, Howard Kennedy