Managing director of Hettle Andrews Claire Russell offers further advice on the risks facing Costs Lawyers who fail to secure adequate Professional Indemnity Insurance (PII). If you’re a Law Costs Draftsman, you will find this worth reading too…

As a practising Costs Lawyer or Law Costs Draftsman, you should be aware of the increasing variety of claims that can be brought against you. ‘Is your livelihood at risk?’

[link] set out the case for Professional Indemnity Insurance (PII) for costs lawyers.

However, that article only touched on a small number of possible causes that can result in a claim, and it’s important to be fully aware of the most common risks you face. Now, Claire Russell, managing director of leading insurance broker Hettle Andrews, sets out a list of a number of other potential issues that can catch the costs lawyer unawares.

These risks include, but are not limited to:

  1. Loss caused by delays
  2. Missing key timetabled dates
  3. Misstating the amount a client would recover
  4. Incorrect interpreting Confidential Fee Arrangements (CFAs)
  5. Omitting parts of cost schedules
  6. Cost sanctions imposed not complying with the times imposed by the court
  7. Legal cost draftsman negligence*
  8. Failure to serve points of dispute on time
  9. Missing a hearing date
  10. Failure to file and serve Precedent H costs budget in multi-track matter

*Note: Costs draftsman negligence could involve omitting costs from any bill that the claimant has an entitlement to. For example, missing or incorrectly claimed success fee and/or disbursements. While the bill should always be checked by a solicitor or partner of the firm, it is the responsibility of the draftsman to correctly prepare the bill.

What is ‘Precedent H’ and how does it affect me?

In April 2013, the Jackson Reforms saw CFAs dispensed with and the government brought in new reforms for civil litigation funding and costs. These changes meant that defendant and claimant solicitors alike on litigated cases now have to prepare cost budgets for the courts before the costs are incurred.

This is known as Precedent H under the civil procedure rules within the courts and it covers pre-action costs, issues/statements on the case, case management conferences, disclosure exercises, witness statements, expert reports, pre-trial review, trial preparation and costs, as well as settlement.

If a cost draftsman is instructed to assist with the preparation of a Precedent H costs budget and gets it wrong such that the solicitors’ costs are ultimately a lot higher upon conclusion of the action, they risk only recovery of the Precedent H capped amount. Solicitors may then seek to recover any shortfall.

This is a developing area of the new approach to costs and currently only applies to litigated cases. However, on complex litigation, the risks of getting it wrong could prove very expensive.

Some of the most effective risk management strategies are the simplest: adhering to timetables and fully understanding the client’s expectations are key, but a solid insurance policy placed by a trusted and proven broker will help to secure the interests of you and your firm.

If you would like to find out more about managing your risks more effectively please contact Claire via email at