Are rigid fixed fees the future post-Jackson? One Yorkshire law firm thinks so

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By Legal Futures

1 April 2011


Fixed costs: risk sharing is a price worth paying, says firm

A Yorkshire firm of solicitors has launched a menu pricing litigation product under which it will shoulder the risk of costs overruns, giving clients budgeting certainty as an alternative to conditional fee agreements (CFA).

The move is an early example of litigation specialists positioning themselves for a post-Jackson, post-recoverability of costs landscape, in which CFAs are no longer viable in many cases. 

Paul Clarke, a commercial litigation partner at 17-partner Taylor&Emmet in Sheffield, claimed the product, known as T&E Resolve, was “revolutionary” and a model for future litigation, which will give clients flexibility and enable them to control their costs.

When clients opt to use the product, litigation will be assessed and categorised according to a scale of anticipated difficulty, with menu tariffs corresponding to the likely risk. The litigation process will be divided into defined stages that can be treated as a standalone instruction.

Mr Clarke admitted the scheme is an attempt to differentiate Taylor&Emmet from rivals offering CFA-based products – which it also offers – amid a tightening market for commercial litigation work. But risk-sharing is a price worth paying, he added, asking: “Why should the client always be the one to take the risk in litigation and to fork out more for it? We want their work and so we should bear that risk.” 

He continued: “It enables us to give clients a cashflow prediction; to say that ‘we know you’re going to spend this much for each stage and roughly when it is going to fall’… We think in a few years’ time all litigation will be done on a fixed fee of some description and this is our way of trying to get ahead of the market.”

Taylor&Emmet has run a trial, involving two cases, which it said was successful in helping it pitch its pricing accurately.

Mr Clarke, a commercial contract dispute specialist who also sits as a deputy district judge, said: “The prices are fixed, no matter how difficult the case is. It’s about balancing out the risk and there is no question we will lose some and we will win some, in terms of profit.”

“We are aiming this at the savvy litigator, the in-house lawyer or the company director who has been through the mill and knows how expensive traditional litigation is to run,” he added.

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