What the law says about legal costs

If you find yourself with a legal bill that is higher than you expected, what can do about it? The answer is: quite a lot.

Solicitors operate under strict statutory constraints about their costs. As soon as they have been instructed by you, your solicitor is required to send information on costs. This forms the basis of your contract.

The contract is governed by the Solicitor’s Costs Information and Client Care Code 1999. Cost information must not be inaccurate or misleading and your solicitor is required to write to you in English, not legalspeak.

Your solicitor must give you the “best information possible” about your likely costs, which includes either fixing a fee, giving a realistic estimate of the likely costs, or explaining to you the reasons why it is not possible to fix or give a realistic estimate.

It must also be explained to you that you may set an upper limit on the firm’s costs for which you, the client, will be liable without further authority.

Unless you have agreed a fixed fee, you must be told what hourly rate your solicitor will charge. They cannot charge you more than this unless the letter makes it clear that the rates can be increased.

Your solicitor must also discuss how and when any costs are to be met, and write to you at least once every six months telling you what the costs are to date and, where appropriate, deliver an interim bill. They must also write immediately if circumstances leading to their previous quote have changed.

All this information should be contained in one of the first letters your solicitor sends you.

The Law Society is the body that enforces these rules, and cost arguments form a huge amount of the caseload of its consumer complaints service. Many of these cases fall into three common categories.

A huge number of solicitors send unsigned bills with little or no details of work done, for which they cannot sue

• There is a difference between the figure given in the initial letter and the final bill. The law allows the solicitor a margin of 15% above their quoted or estimated figure. If the final bill is more than this, the Law Society will reduce the bill to the estimated figure plus 15%.

• The client feels the service it received was below standard. The client will need to complete a Law Society complaints form after they have raised their query under your solicitor’s complaints procedure. The Law Society can award compensation of up to £15,000.

• The client receives a series of bills during the case and feels a bit ripped off. The rules here are quite complicated but most solicitors in their terms and conditions state that these interim bills are “bills on account” and that at the end of an action they will send you a “final bill”, which must take into account the interim bills on account. This is important, as you have rights to challenge your solicitor’s charges.

You have a right within one month of delivery of a final bill in non-contentious matters to ask your solicitor for a remuneration certificate. The Law Society will go through the solicitor’s file to ensure that the charge is “fair and reasonable”. They can, and often do, reduce the fees you have been billed.

Under the Solicitors Act, you have one year from the date of delivery of your bill to challenge it in court, but you must succeed in getting it reduced by at least 20% to avoid paying court fees or the solicitor’s costs of defending their bill.

Your solicitor can sue for an unpaid bill, but again there are rules governing this. A solicitor’s bill must be signed and delivered to you, and be endorsed with your rights to a remuneration certificate and Solicitors Act assessment, before they can sue. A huge number of solicitors send unsigned bills with little or no details of work done, for which they cannot sue.

It sounds too good to be true but, in law, a solicitor’s contract is “an entire contract”, so must be completed entirely.

So, even if your solicitor has sent you interim bills along the way, unless it has fulfilled its contract totally, it will have to pay you back every penny you have paid unless it has included a clause in the terms and conditions of business to ensure that his contract is not an “entire contract”.