Petition calls for proportionate costs rule to be enforced

Petition calls for proportionate costs rule to be enforced

Family lawyer and mediator Mary Banham-Hall, who has launched a petition calling for the proportionality rule to be made to work, says that when legal fees reach 20% of the value of the dispute litigants should be automatically referred to an accredited mediator to hear how mediation can resolve disputes, before the level of costs may prevent an agreement.

The legal profession must restore value to the services it offers clients and mediation could be its salvation.

The Family Procedure Rules 2010 and Civil Procedure Rules 1998 require costs to be proportionate to the issues, but lawyers are stuck between a rock and hard place. Professional guidance frowns on 'unbundling' legal services to limit what tasks the lawyer does, and thereby control costs, and tells us that charging less for less does not relieve us from an onerous duty of care. Our insurance premiums reflect these burdens, yet we are supposed to compete in a de-regulated market against the unqualified and uninsured, with Joe Public ricocheting between us and the cowboys, comparing us on price. Mad, isn't it?

Lawyers are destroying their markets trying to deliver within an antiquated broken system, not fit for purpose. There is no brake. The proportionality rule is ineffective, so we must give it meaning and make it work, as lawyers are blamed when it fails. This might seem common sense, but ‘bonkers’ cases like the recent dispute between two neighbours over £4K worth of plumbing costs which racked up £300K of legal fees (and still going!) are destroying the public's trust in lawyers and thus the market for their services.

Compulsory referral to mediation once 20% of the value of the dispute is reached would result in a faster and cheaper resolution using fewer financial, emotional and professional resources. While this may reduce legal fees per case, it would help restore vital value for customers for resolution services and thus protect the market for those services, by making them more affordable, faster and more user-friendly. If we don't do this fast, lawyers may be increasingly excluded from litigation, and something we do not want may evolve to finish off what many litigation lawyers are trained to offer.

The Ministry of Justice has decided to close 84 courts in a cost-saving drive for its own coffers. But apart from making life even more difficult for litigants and lawyers, it is hard to see how this measure could improve the state of the law in our country. In fact, these changes, coupled with rocketing court fees and court delays and inefficiencies, are contributing to the legal profession falling into disrepute. Our erstwhile clients are increasingly seeking to represent themselves and avoiding lawyers altogether - often with very poor results indeed!

The Jackson reforms in 2014 were supposed to transform litigation and embed mediation at its heart. This failed, not because mediation has failed but because it has not been given a chance to work.  The Jackson reforms were too vague. Yet there is already a clear precedent in the no-win no-fee cases where lawyers charge 30-40% of value for their services. Clients understand and use this system. That is what they pay for a completed case. So a referral to mediation once costs reach 20% of case value makes sense, as the case is incomplete at the point of referral.

It is beyond doubt that the legal system needs to undergo this much needed reform. We must restore value, customer satisfaction and trust to survive as a profession. We must attend to the demand for things to be ‘sorted out fast’. Lawyers orchestrating resolution via mediation will price lower value cases back into their case-load. They will also get the credit they deserve from their relieved clients. It will be good for their business and critically they will not be destroying their markets.

The petition can be accessed here.

Mary Banham-Hall has several decades experience as a family lawyer and a mediator. She was one of the first 100 collaborative lawyers in the UK. She has spent the majority of her professional life helping couples navigate the trauma of separation and divorce and she is also an accomplished civil mediator. Mary now dedicates most of her time to mediating and running her company, Focus Mediation, which she set up in 1999, and which specialises in alternative dispute resolution. In 2016 she published a factual fiction novel, Love Lose Live: Divorce is a Rollercoaster. She is a broadcast commentator on divorce and family issues.

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