Five Hidden Costs Traps That Quietly Drain Solicitor Profits - And How to Fix Them
Article provided by DMDCosts.co.uk:
Many law firms assume they lose profit only on fee earner write-offs or squeezed fixed fees. In reality, significant margins can disappear later - during the cost-recovery phase - through small, avoidable oversights. Below are five "silent killers" we see every week and how to stop them eating into your bottom line.
1. Late-Accepted Part 36 Offers
If you serve a Part 36 and the defendant accepts out of time, you are entitled to fixed penalties: 10 % additional damages (or £75k cap), enhanced interest and indemnity-basis costs from the expiry of the offer. Many firms either forget to claim these extras or settle without recording the precise acceptance date.
Fix: diary the 21-day "relevant period" when the offer is made; calculate uplifts as soon as late acceptance arrives, and flag them in the Bill of Costs narrative.
2. Generic Disbursement Descriptions
"Expert fees – £1,750" is an open invitation for defendants to trim. Costs Judges need to see identity, discipline and purpose.
Fix: itemise - "Audiologist (Dr Smith) £750: causation report", "Architect (Jones Design) £1,000: HDR liability survey". Defendants then must justify any cut.
3. Multi-Defendant NIHL Restoration Fees Capped Wrongly
Company-restoration fees under Appendix 11 are recoverable per defendant. We still see firms claiming one fee across three defendants and losing two-thirds of what could have been recovered.
Fix: list each defendant company separately; cite CPR 45.1(8)(a) industrial-disease exemption to keep the full hourly rate and individual restoration costs intact.
4. CCMS "Minor Error, Major Rejection" Loops
Legal-aid bills bounce for missing fee-earner grades, unmatched POAs, or travel over three hours with no "exceptional" note. Every rejection pushes payment back another month.
Fix: build a pre-submission checklist: correct grade ticked, expert authority uploaded, mileage explained. A 30-second check saves a 30-day wait.
5. Pre-Issue Housing Disrepair Costs Under-Recorded
Firm wins a liability admission, but the pre-action schedule captures only solicitor time. Surveyor fees, expert photos, and two hours with the tenant are "forgotten", losing £1,000–£2,000 per file.
Fix: record every 6-minute unit from day one; serve a running cost schedule with each offer so nothing is left behind at settlement.
The Bottom Line
These traps rarely look dramatic on a single case, yet multiplied across a department they can remove tens of thousands from annual profit. Tightening recording habits, adding a short checklist and claiming lawful uplifts restore that revenue.
ABOUT THE AUTHOR:
DMD Costs offer expert cost drafting, budgeting and negotiation services to law firms across the UK. They specialise in cost drafting, negotiation and legal-aid billing for PI, HDR, NIHL, MOD and clinical-negligence work. First Bill drafted free for new firms.Phone: 07503 992804.
Website: www.dmdcosts.co.uk
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