TERMS OF BUSINESS
SOLICITORS’ CODE OF CONDUCT 2011 CHAPTER 1
INFORMATION AND TERMS AND CONDITIONS OF BUSINESS
SOLICITORS’ CODE OF CONDUCT 2011 CHAPTER 1
INFORMATION AND TERMS AND CONDITIONS OF BUSINESS
1. PEOPLE RESPONSIBLE FOR YOUR WORK
The solicitor responsible for dealing with your work will be [David Grinstead] and he may be helped by [Joanna Gates] and [Natalie Bennett]. The secretaries who may be able to deal with your queries and who will be pleased to take any message for you are Allison Robinson and Irene Craig. We will try to avoid changing the people who handle your work but if this cannot be avoided, we will tell you promptly of any change and why it may be necessary.
2. WHAT WORK IS COVERED BY THESE TERMS AND CONDITIONS
All work necessary in representing you in the above-named matter.
3.1 Abbreviations and Basis of Charging
When we say:
“fees” we mean the charge we make for our time spent working on
“disbursements” we mean the “out of pocket” expenses we must pay on your behalf in dealing with your matter
“costs” we mean the aggregate of the fees and disbursements that you are liable to pay us
“merits” we mean the legal strengths and weaknesses of a claim or defence and not to the moral attractiveness (or unattractiveness) of a claim or defence
Our fees will be in a pre-agreed fixed amount or calculated by reference to the time we spend doing work for you. This will include meetings with you and others; telephone calls; reading and working on papers; correspondence (including e-mails); preparation of detailed costs calculations; and time spent travelling away from our office when necessary. Routine telephone calls, letters and e-mails in and out are charged as 6-minute units of time. We may arrange for some of this work to be carried out by persons not directly employed by us. In some instances, we will consider (i) fixed fees; (ii) fixed fees with a “collar and cuff”; and (iii) success fees (usually in combination with (i) and (ii)).
3.2 Hourly rates
Our current hourly rates are set out below. We will add VAT to these at the rate that applies when the work is done. At present, VAT is 20%
D Grinstead £300
J Gates £190
N Bennett £125
Paralegals/secretaries carrying out chargeable work £90
The hourly rates are reviewed periodically to reflect increases in overhead costs and inflation. Normally the rates are reviewed with effect from 31st March each year. If a review is carried out before your matter has been concluded, we will tell you about any variation in the rate before it takes effect.
Solicitors must pay out various disbursements such as stamp duty, company formation agents fees, barrister’s (counsel) fees, Court fees and expert fees. We have no obligation to make these payments unless you put us in funds.
3.3 Billing arrangements
To help you budget, we will send you interim bills at appropriate intervals, whilst your matter is in progress. We will send you a final bill at the end of the matter or termination of this agreement.
It is normal practice to ask clients to make payments on account of disbursements. We will tell you how much we need on account of costs as your matter progresses. When we put these payments towards your bill(s), we will send you a receipted bill. We will offset any payments on account against your final bill, but it is important that you understand your costs will (very) probably be more than any payments on account.
Payment is due within 14 days of our sending you a bill. If you do not pay the bill within this time, we will charge interest on the bill at 4% a year over the base rate from time to time of Nat West Bank Plc on a daily basis from the date of the bill.
If our interim bills are not settled on time or you reject our advice on an issue fundamental to the conduct of your matter, we will not be obliged to continue working on your matter even though this may be to your prejudice and we will have the right to stop representing you, whether you instruct other solicitors in our place or not.
If you have a query about a bill, please tell the person primarily responsible for dealing with your matter straightaway.
3.4 Fixed Costs & Estimates
It may not be possible to give with precision an estimate or forecast of the time we are likely to spend dealing with your mater (particularly if it is a dispute) and therefore your costs; most likely, because we do not know nor can we reasonably anticipate, all the twists and turns that the matter may take.
We hope to agree a fixed fee (particularly for matters that are not disputes) or be able to give useful estimates about your costs for stages of your matter. We will give you estimates as and when we can. We will inform you if significant additional work becomes necessary, for example, owing to unexpected difficulties or because your requirements change significantly during the matter.
We will consider agreeing a ceiling on our fees. This we will mean that no matter how long we spend working on your matter, we will not charge more for our fees than the agreed ceiling. If that ceiling is reached, we will then require your agreement to an increased ceiling. The ceiling applies only to our fees and to our fees must be added VAT and disbursements. Unless stated to be, a ceiling is not an estimate of what our fees will be to the end of the matter.
In matters that are not disputes, we will consider, if you wish, agreeing a “collar and cuff” on our fees, or even success fees. On a “collar and cuff” arrangement, it is agreed that if the time spent charge would result in fees of, for instance, 25% more or less than the suggested fixed fee, then the fees would be calculated on a time spent basis - an arrangement between us and you that we will both “take the rough with the smooth unless it is very rough or very smooth”.
We will not incur any disbursement of over £500 (plus VAT) for which there is a fixed charge without obtaining your prior consent. Barristers and experts usually accept instructions only on the basis that their fees will be calculated by the time they spend doing what they are instructed to do. If a barrister’s or expert’s fees are likely to exceed £3,000 (plus VAT), we will tell you this and in appropriate circumstances attempt to agree a ceiling for the fees. However, you will be liable to pay the fees of the barrister or expert whatever those fees are, provided any estimate we gave you of the fees was reasonable.
3.5 Electronic payments
The account details you need to make electronic payments to us will be made available on request:
NatWest Bank Plc Client Account No: XXXXXXXX Sort Code: XXXXXX
Please quote your name as a reference for the payment.
Cybercrime Alert: Bank Details
Please be aware that there is a significant risk posed by cyber fraud, specifically affecting email accounts and bank account details. PLEASE NOTE that our bank account details WILL NOT change during the course of a matter, and we will NOT change our bank details via email. Please be careful to check account details with us in person if in any doubt. We will not accept responsibility if you transfer money into an incorrect account.
[Sections 4, 5 and 6 are only relevant if your matter is a dispute]
4. COSTS BETWEEN YOU AND THE OTHER PARTY - IF YOUR MATTER IS A DISPUTE
4.1 The basic rule is, “the loser pays” i.e. the loser must pay a contribution towards the costs of the “winner”, as well as paying their own costs. But, the Court has a wide discretion over the costs orders that it makes and may depart from the basic rule for a host of reasons, including the pre-proceedings conduct or dishonesty of the “winner”, even though such conduct or dishonesty had no effect on the eventual outcome. Costs shifting will usually only come into play where the dispute ripens into court proceedings i.e. where the claimant abandons a claim, or the defendant unambiguously concedes the claim, it will not be open to the “winner” to start court proceedings for the sole purpose of obtaining an award of costs.
4.2 A client is not entitled to recover costs for work done by the client (this includes employees and directors of a company where the client is a company) in preparing a case; giving evidence; or giving instructions.
4.3. The Courts are increasingly keen to make issue-based costs orders, so that where a claimant or defendant is only partially successful, it will recover a percentage of their costs; the percentage fixed to reflect the degree of success achieved in the issues in the case.
4.4 The usual award of costs is that the contribution towards the costs of the “winner”, is assessed (if not agreed) by a costs Judge on the “standard basis”. On the standard basis, only costs for work strictly necessary to advance or defend a case will be recoverable. A costs Judge will only allow hourly rates that they consider reasonable. As a rule of thumb, the “winner” will secure an award on a standard basis assessment equal to 2/3rd of its actual costs. This will leave the “winner” (assuming the “loser” pays the contribution ordered) having to pay about 1/3rd of their own costs; these costs are usually referred to as “irrecoverable costs”.
4.5 Cases allocated to the multi-track will involve the filing of costs budgets. Cases on the fast track may not. Where costs budgets are filed, the Court will on an assessment consider the costs budgets. The Court may, at any time, make a Costs Management Order (“CMO”) in which it will record the extent to which the budgets are agreed between the parties, or record the Court’s approval of a budget. If a party’s costs (claimed on assessment) exceed the amount specified in a CMO (or, if there is no CMO and the costs exceed the budget by more than 20%), the excess may not be recoverable from the paying party.
4.6 For the purposes of costs some interim applications are treated as giving rise to costs liabilities independent of any future outcome at a trial. So, if an interim application by the Claimant is rejected, it is likely the Claimant will be ordered to make payment towards the costs of the Defendant and vice versa. On interim applications, it is now the usual practice of the Court to immediately assess the contribution towards the costs of the “winner” on the interim application, which the “loser” on the interim application, is required to pay: the summary assessment taking place immediately at the end of the hearing of the interim application. A summary award of costs is a “pay as you go” order and so must be satisfied straightaway by the “loser” on the application.
4.7 In exceptional circumstances (for instance where a party has behaved wholly unreasonable or dishonestly), the “loser” may be ordered to pay a contribution towards the costs of the “winner”, assessed on the “indemnity basis”. The costs Judge is unlikely to reduce the hourly rate agreed between the “winner” and their solicitors, when assessing the amount of costs, the “loser” must pay. Frequently the upshot of an assessment of costs on the indemnity basis is that the “loser” is ordered to pay a contribution that matches, or nearly matches, the full liability of the “winner” for costs i.e. there is little in the way of irrecoverable costs. Doubt whether work was reasonably necessary to advance or defend a claim, will be resolved in favour of the “winner”.
4.8 The Civil Procedure Rules (“CPR”) which govern (civil) Court proceedings in England, contain provisions relating to costs aimed at promoting the settlement of disputes. One of these provisions in the CPR is Part 36, which sets out a non-exhaustive code for Claimants and Defendants to make offers to settle. Making a Part 36 Offer should not be interpreted as a sight of weakness. A well-judged Part 36 Offer is a powerful weapon, whether made by a Claimant or Defendant.
4.9 Part 36 offers are (automatically) made on a “without prejudice” (“WP”) basis and, therefore, may not be disclosed to the Court until the end of the case when they may be referred to in argument about costs. If a Claimant makes a Part 36 Offer, which is then bettered at trial, the presumption is that the Defendant will be ordered to pay additional amounts in relation to the Claimant’s damages (financial compensation) and costs on the indemnity basis from the date of the Part 36 Offer. Conversely, if a Defendant makes a Part 36 Offer, which the Claimant fails to better at trial, the presumptions are that:
(a) the Claimant is entitled to the damages awarded - the Claimant cannot accept the Defendant’s (higher) Part 36 Offer;
(b) the Defendant must pay a contribution towards the Claimant’s costs on the standard basis up to the date of its Part 36 Offer (and pay their own costs up to that date); and
(c) the Claimant must pay the Defendant’s costs on the indemnity basis from the date of the Defendant’s Part 36 Offer (and pay their own costs from then on).
The “teeth” Part 36 gives to a well-judged Part 36 Offer by a Claimant, encourages Claimants, to make early Part 36 Offers if convinced the claim has strong merits.
4.10 The basic rule “loser pays”, applies in the civil courts for employment contract claims. However, it does not apply in the Employment Tribunal (“ET”). If a litigant is successful in bringing or defending a claim before the ET, they will not necessarily benefit from an order that the unsuccessful litigant pays their costs. Nevertheless, the ET has a discretion to order costs contributions. The ET may award costs (broadly) for two reasons. Firstly, because of the way the proceedings are conducted by a litigant. If the ET decides conduct was “vexatious, abusive, disruptive or unreasonable”, in how they conducted (all or part of) their claim or defence, this may result in a costs order. Secondly, where a claim or defence is pursued with “little or no reasonable prospect of success”. In this connection, deposit orders may be important. If at a preliminary hearing (“PH”), it seems to the ET that any claim or allegation or response has little or no reasonable prospect of success, an order may be made requiring the party (“paying party”) to pay a deposit of up to £1,000 as a condition of continuing to advance the claim or allegation; and failing to pay the deposit in time will result in
case is lost the allegation or argument being struck out. If at the (full) hearing, the ET decides against the paying party on the claim or allegation, there are likely to be two consequences: (i) the deposit will be paid out to the non-paying party; and (ii) the paying party should be treated as having acted unreasonably in pursuing the allegation or argument, triggering the discretion of the ET to make a costs order.
4.11 The costs regime in the ETs differentiates between costs orders that might be made in favour of legally represented parties (“costs orders”) and those made in favour of unrepresented parties (“preparation time orders”). Under a preparation time order there will be no award for any time spent at a hearing and the hourly rate for the unrepresented party is likely to be confined to no more than £30 an hour and subject to a cap of £20,000. Costs orders are not confined in this fashion, but usually will only require assessment on the standard not the indemnity basis (see 4.4 and 4.7).
5. CFAs & DBAs - POTENTIALLY RELEVANT TO YOUR MATTER IF IT IS A DISPUTE
You may have heard of Conditional Fee Agreements (“CFAs”) and Damages-Based Agreements (“DBAs”). CFAs and DBAs may be used in disputes.
5.1 CFAs. A CFA is an agreement between a lawyer and client, which provides for the lawyer’s fees to be payable only in specified circumstances. Generally, if the client loses the case, the client will not be liable to pay the fees that are subject to the CFA (“conditional fees”). If the client wins the case, by settlement or at Court, the client must pay the fees, including the conditional fees and a “success fee”. A success fee is an additional amount payable to the lawyers over and above the amount that would normally be payable if there was not CFA. It must be calculated as a percentage uplift on the amount that would be payable if there was not CFA; and that percentage uplift cannot exceed 100% (of what the fees would ordinarily be). A partial (or discounted) CFA is permissible; some fees are payable (but calculated on a reduced time cost value rate) even if the case is lost, but the success fee (if the case is won) will be less than otherwise would be the case.
CFAs became very important in relation to personal injury work. For straightforward personal injury cases, it was (and in many instances still is) possible to obtain after-the-event (“ATE”) insurance for low premiums. In some instances, third party funders pay the premium for the ATE insurance, (or the solicitors pay it), or the ATE insurers agree to defer payment until the end of the case. It is these types of CFAs, which you may have seen advertised online, on television and in newspapers.
Before 1st April 2013, the success fee and the premium for the ATE insurance could be recovered from the “loser”. This changed on the 1st April 2013 (despite the outcry from lawyers for personal injury claimants). The success fee and the ATE insurance premium are no longer recoverable from the “loser” and must be paid by the “winner” for all CFAs. Even though the success fee and ATE insurance premium may no longer be “shifted”, a claimant (or defendant) must inform the opponent about the existence of any CFA and ATE insurance.
5.2 DBAs. A DBA is a type of contingency fee agreement between a lawyer and a client. The client will make a payment to the lawyer if the client wins by settlement or adjudication by the Court, “a specified financial benefit” (usually damages paid by “loser”). The amount of the payment will be determined as a percentage of the “specified financial benefit”. If the case is unsuccessful, the lawyer is generally not entitled to be paid. Since 1st April 2013 DBAs may be used in almost all types of dispute. Before then, DBAs were only allowed in cases in the employment tribunals. It is anticipated that most DBAs will be supported by ATE insurance.
The uncertainties regarding DBAs; for instance, it is unclear if a defendant can enter into a DBA. It is also unclear if a partial (or discounted) DBA would be valid (some fees being payable even if the case or the success fee being less than it ordinarily would be). The take-up of DBAs in disputes in the ordinary courts has been very slow.
5.3 Summary. It is important to appreciate that the client’s liability for success fees (CFA) and a percentage of the “specified financial benefit” (DBAs) is not conditional on recovery of any money from the opponent. The (contractual) obligation of the client to pay the success fees or a percentage of the “specified financial benefit”, is triggered by the order (or agreement if there is no Court order) embodying or creating the relevant liability of the other side. The risk of the opponent not paying out sits with the client.
If you want us to consider a CFA or DBA with you please tell us.
6. ASSISTANCE WITH COSTS & FUNDING OPTIONS - IF YOUR MATTER IS A DISPUTE
6.1 You are not entitled to Public Funding (what used to be called Legal Aid) to cover your legal representation in your dispute.
6.2 Unless you tell us otherwise, we act on the basis you do not have any before-the-event (“BTE”) insurance which may cover any of our costs, or the costs of the other side. If you have any doubts or queries about whether you have any relevant legal expenses insurance cover, please provide us with a copy of the policy or policies, so that we may advise further. BTE insurance never operates retrospectively: BTE insurers will only meet costs incurred after the claim under the BTE insurance has been accepted.
7. INTEREST PAYMENT
Any money received on your behalf will be held in our client account. Subject to certain minimum amounts and periods of time set out in the Solicitors’ Accounts Rules 2011, interest will be calculated and paid to you at the rate from time to time payable on Nat West Bank Plc’s designated client accounts. The period on which interest will be paid will normally run from when we receive funds, until the date of issue of any cheque drawn on our client account.
8. STORAGE OF PAPERS AND DOCUMENTS
8.1 We are entitled to keep all your papers and documents while there is money owing to us for your costs. In addition, we will, if you wish, keep your file (with all the papers we hold relating to your case) in storage for not less than 6 years. After then the file will be stored on the understanding that we have the right to destroy it, or to make a charge for storage if we ask you to collect the file and you fail to do so. We will not of course destroy any documents such as Wills, Deeds and other securities which you ask us to hold in safe custody; no charge will be made to you for this storage unless prior notice in writing is given to you of a charge to be made from a future date.
8.2 We may:
(a) charge you for retrieving a file or documents from storage, or storing files or documents beyond the minimum storage period recommended by the Solicitors’ Regulation Authority,
(b) create digital images of all or part of your file and destroy the hard copy of the file.
9. LIMITED COMPANIES
Where the client is a limited company, the signature of a director and/or controlling shareholder accepting these terms and conditions will amount to a personal guarantee of our fees and disbursements. We may request further guarantees and if the request is refused, we may end this agreement and insist on immediate payment of all costs.
10. JOINT AND SEVERAL
Where these terms and conditions of business are signed by or on behalf of a partnership, or otherwise by or on behalf of more than one person, liability for our fees and disbursements is deemed to be the joint and several liabilities of the partners or the persons signing it and any demand for payment made or notice given by us to any one or more of the persons so jointly and severally liable is deemed to be a demand made or notice given to all such persons.
11. TAX ADVICE
Any work that we do for you may have tax implications. We do not accept responsibility for giving any advice to you on tax, unless we specifically and in writing accept and acknowledge this responsibility. If you have any concerns about any tax implications of your matter, please raise those concerns with us. If you ask for tax advice relating to your matter and we are unable to give that advice, we may be able to obtain appropriate advice, either from a tax barrister or accountant.
12. IDENTITY AND DISCLOSURE REQUIREMENTS
12.1 We may refuse to act for you if you fail to supply appropriate proof of identity for yourself or
for any principal you represent.
12.2 We will not be liable for any loss, damage or delay arising out of our compliance with anti-
money laundering or “know your client” laws and regulations that bind us.
13. COMMUNICATION BETWEEN YOU AND US & GDPR
13.1 We are confident of providing a high quality of service. However, if you have
any queries or concerns about our work for you, please take them up first with the person primarily
responsible for your case. If that does not resolve the problem to your satisfaction, then please take it
up with the firm’s senior partner.
13.2 All firms of solicitors are obliged to attempt to resolve problems that clients may have with the service provided. It is therefore important that you immediately raise your concerns with us. We value you and would not wish to think you have any reason to be unhappy with us. We have a formal complaints procedure and details of this are available on request. If the complaints procedure fails to resolve your problem, you may ask the Legal Ombudsman to consider the complaint. The Legal Ombudsman may be contacted by telephone on 0300 555 0333, email at or, alternatively write to, Legal Ombudsman, PO Box 6806, Wolverhampton WV1 9WJ. Usually, you will need to bring a complaint to the Legal Ombudsman within six months of receiving a final written response from us about your complaint.
13.3 We will aim to communicate with you by such a method as you want. Unless you withdraw consent, we will communicate with others when appropriate by email, but we cannot be responsible for the security of correspondence and documents sent by email.
13.4 The General Data Protection Regulation (EU) 2016/679 (“GDPR”) requires us to tell you that we:
(a) may hold your personal data;
(b) will process your personal data to provide legal services to you and for ancillary tasks, for instance, creating and updating client records and carrying out anti-money laundering checks;
(c) may also give your personal data to third parties, but only to provide you with legal services and discharging legal and professional obligations imposed on us - we will not sell your personal data, or give it to third parties for their sales or marketing activities
13.5 For more information about how we may use your personal data (in accordance with the GDPR) please look at the privacy notice on our website (www.binghammansfield.com). Signing and returning these Ts & Cs is consent to us processing (using) your personal data in the ways described here and in the privacy notice.
14. CONSUMER CONTRACTS (INFORMATION, CANCELLATION AND ADDITIONAL CHARGES) REGULATIONS 2013
Under the Consumer Contracts (Information, Cancellation and Additional Charges) Regulation 2013 for some non-business instructions, you may have the right to withdraw without charge, within 7 working days of the date on which you asked us to act for you. However, if we start work with your consent within that period you lose that right to withdraw. Your acceptance of these Ts & Cs will amount to such consent. If you seek to withdraw instructions, you should give notice by telephone, e-mail or letter to the person named in these terms of business as being responsible for your work. The Regulations require us to inform you that the work involved may take more than 30 days.
15.1 Our liability for breach of contract and/or in negligence is limited to the maximum of our
indemnity insurance which is currently £5m.
15.2 Our liability for breach of contract and in negligence will rest with the company and not with
any director, employee, or shareowner, who might otherwise be liable.