When a costs order is made in your favour it may be an order for the paying party to pay the full costs of the application or alternatively it could be simply to pay the costs of a specific issue or a certain hearing. Whichever order is made you will need to ensure that you claim the relevant costs from the paying party and know what can then be claimed from the legal aid agency.
You are able to claim higher rates from a paying party than those claimable from the fund as the indemnity principle does not apply in publicly funded cases. If, in your client care letter, you have set out the rates you would charge should costs be recovered from the other side then these can be used; if not then local guideline court rates should be applied. The costs you are claiming against the paying party are not limited to your costs limitation; however you are unable to claim anything that is outside the scope limitation of your certificate.
When a costs order is made in your favour in a case covered by a legal aid certificate attempts will need to be made to recover those costs. This could be by way of negotiation on a breakdown of costs or by proceeding to a full 6 column Bill of Costs. The bill includes three columns for work that is only being claimed from the fund (at prescribed legal aid rates) and the other 3 columns set out work being claimed from the paying party (at private rates). The bill is then served on the paying party as set out in Practice Direction 47.
The paying party has 21 days to serve points of dispute in response to the bill; following receipt of the points the usual inter partes assessment procedures are then followed and if the matter proceeds to assessment any legal aid only costs will be assessed by the Court at the same time.
If the paying party fails to serve points of dispute and have not in the meantime agreed to settle your costs you will need to obtain a default costs certificate. This certificate will need to be served on the paying party and a further attempt made to recover the costs. When preparing the 6 column bill the Costs Draftsman will have prepared a Schedule of Inter Partes Costs at Legal Aid Rates. If costs are not recovered from the paying party then all of the work done will need to be assessed at legal aid rates and the costs claimed from the fund. If costs claimable from the paying party are recovered, the remaining legal aid only costs can be claimed from the fund (this does not apply when a fixed fee scheme applies – see below). If these costs are over £2500 they will be assessed by the Court otherwise they are assessed by the LAA on a CLAIM2 form.
Fixed Fee Cases:
The process differs in cases subject to a fixed fee scheme insofar as you have the following choice:
Where costs have been ordered for only part of the case it is often likely that option 2) will be the best option. Unfortunately this means that you are not getting any benefit from obtaining the costs order as all your costs are being claimed from the fund in the same way as if no order had been obtained. It is important however to obtain costs orders where possible as part of your duty to protect the fund and it also is of benefit to the client in cases where the statutory charge arises.
Should you require any assistance of further information please contact your local office
Thursday 18th February 2016
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