Advocating a comprehensive overhaul of solicitor and own-client cost regulation, the Civil Justice Council (CJC) closed its public consultation in July. It canvassed opinion on removing court-based costs disputes contained in Part III of the Solicitors Act 1974 and on modernising the solicitor-client billing framework. The CJC’s final report and formal recommendations are expected early next year. 

Matthew Kain

Matthew Kain

The consultation’s primary recommendations include: 

  • Replacing the archaic solicitor-client costs framework with a modern, principles-based code designed to remove fee disputes from the courts;
  • Solicitors’ charges and terms should be subject to an overarching principle that they are objectively ‘fair and reasonable’;
  • Abolishing the rigid distinction between contentious and non-contentious business, alongside statutory bills;
  • For bills under £50,000, the Legal Ombudsman (LeO) process would be more appropriate;
  • For bills above £50,000, recourse to the courts should be preceded by mandatory alternative dispute resolution (ADR);
  • Restriction of court challenges to a single one-year receipt time limit.

Notably, according to its leaders, the LeO is ‘open to a discussion on it replacing the courts for costs disputes between solicitors and their clients – but would not be in a position to actually do it for some time’. 

As the CJC carefully considers its report recommendations, including how to help LeO get up to speed, what might England and Wales learn from other jurisdictions when it comes to modernising Part III of the Solicitors Act? 

As a comparator, it is perhaps valuable to consider three smaller jurisdictions which have significant interaction with a wide range of UK law firms and their commercial clients: the Cayman Islands (Cayman), Jersey and Dubai.  

Cayman Islands

Typical Cayman costs disputes are resolved through negotiation, mediation or taxation proceedings (assessment of costs) via Cayman’s Grand Court, particularly the Financial Services Division. Currently, traditional court litigation remains preferred over ADR for resolving most disputes, although costs mediation is gaining traction. A specialised costs draftsman or the court assesses the bill to determine what constitutes fair and reasonable remuneration for the legal services provided. 

Jersey

Jersey has no statutory assessment procedure equivalent to the Solicitors Act: adjudication relies on mutual consent instead. If direct negotiation between client and firm fails, the Law Society of Jersey routinely mediates disputes worth less than £5,000. Above £5,000, it can refer the matter to a lawyer for independent adjudication, but cannot legally force participation. 

If the parties refuse to engage, a civil claim may be required through the Petty Debts Court or the Royal Court of Jersey. However, court proceedings in Jersey can be expensive and slow, making private ADR hearings cheaper, faster and confidential – therefore, underpinning its status as the preferred option. Indeed, courts in Jersey actively expect parties to consider ADR. 

Dubai

Governed by the terms of a signed engagement letter between client and firm, which is regarded as the primary binding contract, the Dubai system resolves costs disputes via ADR or through the courts. Parties typically attempt resolution by reviewing itemised billing records against the engagement letter. ADR, often undertaken through the Dubai International Arbitration Centre (DIAC), is frequently preferred over court litigation.

As part of the UAE, which primarily uses civil law, the emirate of Dubai also has common law courts that adjudicate costs disputes in the Dubai International Financial Centre (DIFC). Either the client or the law firm can initiate a standard civil claim before the DIFC courts: via the Small Claims Tribunal for claims under AED500,000 (£103,000), or the Court of First Instance for larger amounts. 

These regimes differ from the Solicitors Act framework in England and Wales. By making recourse to legal action through the courts a last resort, rather than a first resort, Jersey and Dubai are fundamentally more progressive in their approach to resolving costs disputes – as reflected by proposals in the CJC consultation. Although Cayman appears to be following a similar trajectory, albeit more slowly, the situation is more reflective of the current England and Wales court-based approach to resolving costs disputes. 

Following recent news that UK legal services exports reached a record £11bn in 2025, up by more than 60% in five years, next year’s CJC report on updating Part III is timely. The continued growth of international and offshore legal work, often with a UK component, could lead to greater scrutiny and more challenges over legal fees in jurisdictions such as Cayman, Jersey and Dubai. 

The size and jurisdictional reach of large offshore law firms continues to grow in response to client demand. At the same time, clients instructing such firms need to pay greater attention to the retainers, fee structures and, ultimately, mechanisms that are available for challenging fees, particularly where there is no direct equivalent of the Solicitors Act in the principal jurisdictions in which they operate across the Caribbean, Channel Islands, Middle East or Asia. 

In an increasingly international legal market, there is a compelling argument for greater consistency and transparency around how disputes over lawyers’ fees are resolved. We will have to wait and see whether the CJC can create an appropriate template for others to consider. 

 

Matthew Kain is CEO of costs law firm Kain Knight, London

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