ALCD warns on uninsured costs advisors
The Association of Law Costs Draftsmen (ALCD) has warned insurers that law firms instructing unqualified people to carry out costs work on cases are risking a large professional indemnity (PI) claim if the advisors do not deliver on time and to a high standard.
Iain Stark, chairman of the ALCD says: “Many law firms instruct unregulated and uninsured people to draw up complex bills of costs. If a mistake or a delay in delivering the bill of costs is detrimental to the client, the client can – and will – sue the law firm for compensation and the firm will pass that claim on to the costs advisor. If the advisor does not have PI insurance the law firm’s own insurer will be picking up the compensation bill.
“We have reports of several mistakes and delays in bills of costs resulting in compensation claims, some for hundreds of thousands of pounds. Law firms, and their insurers, stand to foot the bill if they employ uninsured and unqualified people to carry out costs work.
“The ALCD is urging insurers to insist that their law firm clients instruct only costs lawyers who have full PI insurance and whose standards are regulated, to eliminate the risk of a claim being made on the law firm’s PI insurance.”
The ALCD is opening talks with insurers to spell out the potential cost of their law firm clients engaging uninsured people to carry out costs work. Iain Stark explains:
“There are literally thousands of people offering themselves for costs work, most of whom are untrained and unregulated. Only members of the ALCD are regulated and a stipulation of membership is that they carry adequate PI insurance.
“This is an insurance accident waiting to happen and the sooner costs lawyers are fully regulated and forced to carry PI insurance the faster the problem will be solved.”