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New legal costs obligations under the Legal Services Regulations Act

06 May 2020
The Legal Services Regulations Act came into effect on 3rd December 2019. This introduced new obligations for the Legal Practitioners, and established the position and obligations of the Legal Costs Adjudicator (formerly known as the Taxing Master).

Adjudication of costs

Party and party costs can be recovered when an order is granted by the court – by way of judgment or ratifying settlement. Parties are not entitled to an adjudication of costs for a settlement which has not been ratified by the court.

When an adjudication of costs on the party and party basis takes place, the Legal Costs Adjudicator will allow all costs necessary or proper for attaining justice or for enforcing or defending the rights of any party. However, the onus is on the party claiming costs to show that the costs claimed are proper and reasonable (Dunne V Fox [1999] 1 IR 283; Minister for Finance v Goodman [1999] 3 IR 333.)

In Cafolla V Kilkenny and Others [2010] IEHC 24, Ryan J. provided an excellent summary on the adjudication of costs by the Legal Costs Adjudicator: "[Section 27] prescribes a new approach for the Taxing Master in assessing costs. Where previously the main focus in a taxation was on comparisons with other cases, particularly when it came to major items such as instructions and brief fees, s.27(1) and (2) of the Act now focus on the work that was done in a case by solicitors, barristers and expert witnesses and mandate the Taxing Master to examine the nature and extent of their work in order to evaluate the claims in the bill of costs"…."the different types of work have to be specified and the time spent on them detailed"….."What this comes down to, as I see it, is that the Taxing Master is asked to inquire of the solicitors claiming the costs what work they did, who in the firm did it, how much is charged for or what was the appropriate rate and how long the work took are the most elementary inquiries in evaluating work"…"The section has been examined in a series of cases and the law can be considered to be settled in this area."..." This applies to the work of a solicitor giving rise to his claim for his instructions fee and also work of counsel". Ryan J. went on to say "In this case, the disputed costs are a very large sum of money and it is entirely legitimate for the defendants to want know why they have to pay that much and how the figure was arrived at. The more general and non-specific the assessment, the more difficult it is for any reviewing body such as this court to decide whether the task has been done properly. The essence of transparency is to enable everybody to understand what has been done and why ".

To discuss this issue in more detail, please contact Michael Ryan, Head of Legal Costs (Ireland).

Further Reading