Kerry Underwood

FIXED COSTS AND OFFSHORING

with 5 comments


This article first appeared on the Practical Law Dispute Resolution Blog on 22 June 2017.

 

The Master of the Rolls, giving the Lord Slynn Memorial Lecture on 14 June 2017, had this to say about the effect of electronic filing and online courts:

 

“It also means that law firms can offshore work or otherwise structure their businesses to reduce cost while maintaining quality; an offshore office can file a claim online as easily as an office in the same city as the court. Again cost savings are possible. And where international, commercial and business disputes are concerned, ease of filing over the internet enhances global as well as local accessibility of our courts.”(Paragraph 31).

 

Compulsory online filing now exists in all cases in the Rolls Building, that is heavyweight commercial disputes, and with a small number of exceptions all personal injury claims valued at up to £25,000 damages.

 

It is proposed that from October 2018 all civil claims of £10,000 or less be subject to online filing and video or telephone trials. The day when paper filing is impossible in a court or tribunal is but a few years away.

 

As far as I am aware, this is the first time that a senior judge has referred to offshore legal offices enabling firms to operate in England and Wales at lower costs.

 

Underwoods Solicitors have been doing this through our South African office for over 10 years (and in fact, Underwoods Solicitors is a trading name of Law Abroad Limited, whose name reflects this fact). Two other firms have used our facility. Virtually none of the 10,000 plus law firms in England and Wales have given it a thought. It is particularly notable, and surprising, that even the many personal injury firms who do not see clients, and which are subject to fixed recoverable costs, employ paralegals in this country rather than cheaper and better qualified staff abroad.

 

Expect that to change once fixed costs and online filing extend to other areas of work and to claims of higher value. Apart from seeing the client and trial advocacy (and few matters go to trial), everything else can be done abroad.

 

Take experts – ridiculously expensive by any standards. For anything other than a basic medical report, it is cheaper to fly the client to South Africa for an examination and report. Turn that round and pay for a South African expert to travel to England and Wales to examine and report on 30 or 40 clients and the savings are enormous.

 

With non-medical expert reports (where there is no need physically to meet anyone) huge savings can be made by instructing an offshore expert. Why does a forensic accountant need to be based in the jurisdiction? The same is true in relation to costs lawyers: why is it necessary to prepare a bill of costs here when it could be prepared for a fraction of that cost abroad?

 

All of you reading this will have physical goods made abroad and physically imported into the UK, be it a car, television, phone, camera, sound systems, computer, clothes and so on. If it makes economic sense even where the goods have to be physically transported, how much more sense does it make when there is nothing to be transported and thus no cost attached?

 

You may have a view on the rights and wrongs of offshoring, or importing services to give it another description, but it should be on the next partners’ and staff meeting agendas. Decisions about this year’s Christmas party, the fridge not working properly and running out of toilet paper can be delegated.

 

Advertisements

Written by kerryunderwood

June 23, 2017 at 7:59 am

Posted in Uncategorized

5 Responses

Subscribe to comments with RSS.

  1. If you are going to offshore, especially outside of the EU, you will need to ensure you comply with the forthcoming GDPR as the law around data protection is changing significantly.

    John Green

    June 23, 2017 at 8:47 am

    • Our scheme, our systems, and the wording of our client care letter and retainers has been approved by the Information Commissioner’s Office.

      The General Data Protection Regulation does not become effective until 25 May 2018, and may or may not survive the United Kingdom’s exit from the European Union.

      Kerry

      kerryunderwood

      June 23, 2017 at 8:57 am

  2. Hi Kerry

    Good to see you sought approval from the ICO, unfortunately I am seeing a lot that don’t or have never heard of GDPR. As for GDPR it is likely we will not have exited before it comes into effect. Both Conservative and Labour manifestos were committed to reforming data protection laws and the ICO have confirmed they are also committed to GDPR.

    Keep up the good work.

    John

    John Green

    June 23, 2017 at 9:58 am

  3. John

    That does not surprise me! I note what you say about the GDPR, but I think that there may be some movement as this is the type of thing that was behind some of those voting to exit.

    We will see! Many thanks for commenting.

    Kerry

    kerryunderwood

    June 23, 2017 at 10:57 am

  4. […] interesting recent blog post from Kerry Underwood discusses offshoring legal […]


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: