Being “unshockable” is necessary when you are deciding disputes about bills for legal costs, says Paul Behan, who has retired as the State’s first chief legal costs adjudicator.
Behan, whose expertise in legal costs spans 50 years, was diplomatic when asked if he has ever been shocked by a costs bill.
“Part of the CV here is to be unshockable because you can’t have any element of predetermination about what you are going to find when you read the documents. I have looked at things and said, ‘My God,’ but then I have come out of there after a day [and think], ‘Oh, now I see why.’”
“I have sometimes not seen why,” he added. “Some deductions will be apparent from where I have said that’s not on, not fair or reasonable, it wasn’t earned.”
He cites an example where work done by a legal executive in one case was portrayed as “accomplished legal work” when it was not. “If the fact-finding exercise was not part of the job, you would never find that.”
Behan worked as a legal costs accountant for 35 years before being appointed a High Court taxing master in 2014. He became chief legal costs adjudicator in 2019, a new position introduced under the Legal Services Regulation Act 2015. He has a law degree but is not a solicitor or barrister. “I’m not an insider.”
Costs issues in more than 90 per cent of superior court cases are agreed or resolved but a disputed minority are adjudicated. Claims of inadequate legal services or misconduct are separately addressed by the Legal Services Regulatory Authority (LSRA).
About 1,100 adjudications, valued at about €210 million, were on file in 2023, up about 12 per cent on 2022. Many went to mediation or were adjourned but 181 cases, involving claims of €22.8 million, went to hearing and the adjudicators reduced them to about €13 million.
In an interview with The Irish Times just before his retirement, Behan said he would describe costs as “high”, rather than “excessive” or “inflated”.
“They are emotive words implying somebody is out for a grab; that is not my experience.”
Asked whether the adjudicators’ slashing of a €397,000 claim to €75,000 for three Supreme Court appeals suggested some claims might be excessive, he said that claim had included hearings not captured by the court’s costs order.
“The Supreme Court limited the entitlement so what appears to be a grab was not. Our job is to make sure that what was awarded by the court is not exceeded or smuggled in to a later claim.”
The adjudicators' determinations in 2023 reducing claims for €22.8 million by about €8.9 million meant substantial savings for private insurers and the State, he agreed.
That included reducing to €922,949 the €1.3 million costs claimed across 21 road traffic collision cases and shaving about €464,000 off €1.4 million claimed for 18 cases related to employers' and occupiers' liability.
A bill for €39,176 in one family law case was cut to €30,399 and an €821,923 claim for three defamation/libel/slander cases was almost halved to €415,396.
“We don’t look at it like two goals to one, every case is gone through on its merits,” Behan said. “If fees are excessive or there is overcharge, we reduce them. We have wide power to direct a refund.”
The adjudicators’ reasoned determinations can be lengthy. One of Behan’s ran to 440 pages, addressing every item claimed for. “That is the detail the public does not see. That is our fact-finding role: we see how many motions, how many appearances before the court, how many things are captured by the order, how many are not.”
Legal costs arise in two different ways. The first, litigation based and known as party-party costs, arises from a court order directing one party to pay the other’s costs. The second is contractual, involving solicitor-client costs disputes.
“Some people are not happy with the way things worked out in their case as opposed to not being happy with the service they got. If lawyers are charging what is permissible, some may think the rates are excessive but people might also think that about plumbers, doctors, engineers, architects, other professionals.”
Insurance companies and the State, the two biggest payers of costs in the superior courts, settle many claims. “The State sets the level of costs; they complain about the level, but they set it. I don’t know what they settle them for.”
The State Claims Agency (SCA) has a team of 18 to deal with legal costs and settles a “huge” amount but disputes some claims before the adjudicators, he said. “Sometimes they [SCA] are right.”
The bills of costs put before the adjudicators must be vouched and must set out a summary of the legal services received, including lawyers’ hourly rates if costs are calculated on the basis of hours worked. Details of all charges incurred, including expert witness and court fees; VAT at 23 per cent for solicitors, barristers and other professionals; postage, printing, stenographer and any damages/monies paid or recovered are among the matters that must be itemised.
The 2015 Act gave the adjudicators independent fact-finding powers, including examining whether the solicitor did the work or outsourced it to a more junior person in the office, meaning lower costs as solicitors' fees range from €150-€500 an hour.
A claim for work done can be based on the number of hours involved or on a “fair and reasonable basis”.
An agreement to charge on the basis of hours worked is often “not realistic because very few clients can afford it”, said Behan. The adjudicators rarely see costs disputes between big law firms and clients because they usually have a costs agreement, which may be based on the value of the transaction involved and an hourly rate.
There is “no magic” about the process applied to decide what is “fair and reasonable”, he said. “The evaluation of the work someone did is objective.”
Medical negligence cases incur substantial costs, he noted. The adjudicators dealt with 166 such cases, involving claims for almost €60 million costs, in 2023.
Many plaintiffs “would not have a chance” if solicitors were not willing to take on and pursue, sometimes over years, complex medical negligence claims, he said. “I have great admiration for them [solicitors], they don’t get any extra for it but they get well paid because that work is extremely complicated.”
The adjudicators’ powers are based on the courts’ costs orders, he said. “There is definitely an alertness among judges now to costs and controlling them, probably more so than in the past.”
The adjudicators must allow costs for experts involved unless the court has restricted those. An engineer’s report for a road traffic case can cost between €1,000 and €2,000 and a medical report is about €400 plus VAT, he said.
The number of smaller personal injury claims coming to the adjudicators has fallen “appreciably” since the 2021 personal injury guidelines, which slashed awards for mainly minor personal injuries, he said.
The number of High Court judicial reviews is increasing in some areas, including planning and asylum, he noted. In some planning reviews, lawyers who may have been involved in the objection process driven by residents/groups were not paid for that because it was not litigation work, he said. “They may seek to bring a little of that emotional baggage with them when it comes to the High Court and it’s our job to strip out any of that.”
He has seen “very bitter disputes” between solicitors and clients, including in family law and probate. “A lot of times people come in here spitting fire, but if you listen to them, that can make a difference.”
Some who complain about legal costs “should perhaps look first to their own behaviour, how they dealt with an issue, or did not, or what gave rise to a claim in the first instance”. If a defendant denies liability, insists the plaintiff prove everything, and then settles on the day of the hearing, that has costs implications, he said.
“The odds are stacked against the small plaintiff.”
Behan gave evidence to the civil justice review group, chaired by former High Court president Peter Kelly, which made more than 90 recommendations for reforms aimed at reducing costs and improving efficiencies but split over whether to introduce a scale of legal costs, with a majority opposed.
Behan does not believe costs scales or binding costs guidelines work. “They become the ceiling which the following week is the floor. There have been numerous attempts in England and other jurisdictions to have scales for costs which have been abandoned. I think our system is fairer because the defendant has every right to dispute every element of the legal costs.”
