What is Financial Mismanagement?

If you have entrusted an expert to conduct financial management, a good level of work is expected. In some circumstances, financial professionals fail to meet the standard of work that is required for them, which often results in a loss due to negligence. In matters where this negligence has occurred, and has led to financial loss, a claim for financial mismanagement can be made.

For example, you may have trusted an expert to prepare complex and important documents before the end of the financial year on the 31 March, such as your Business Financial Statement. This document highlights the assets, income, cash flow and liabilities of a company. It may also be useful for financial planning of a start-up company. If this document has been prepared negligently, it may have terrible long term consequences for the business, as it is usually necessary when seeking a loan.

Moreover, a good level of practice is expected when financial experts are completing day to day tasks, such as organising forecasts and managing cashflow and expenses. The expert may have failed to properly manage such aspects of the business, or may have revealed information regarding a company’s funds, thus failing to practice confidentiality. Furthermore, they may not have thoroughly accounted for all of the transactions of the company.

Alternatively, if you have arranged for any Claims Management Companies to handle your claim, you expect a good level of conduct. These companies may be able to aid in insurance claims for mis-sold financial products, such as payment protection insurance (PPI).

When completing this work, a client expects the company to have the knowledge to achieve good results. If they have failed to do this, for example, they have failed to follow the conduct rules for claims companies, a complaint should be made to the Financial Conduct Authority (FCA) and a claim should be commenced.

Claim Process for Financial Mismanagement Costs

Subsequent to the settlement of a claim for compensation, an order may be provided for Detailed Assessment of Costs. When this is received, a costs law expert will be given instructions to recover the costs for your financial mismanagement matter. They will require access to either a paper or electronic file of documents, in order to commence the production of the Bill of Costs.

This document is itemised and will comprehensively highlight all of the costs which have been incurred during the process of the claim. Furthermore, it will state all of the disbursements such as expert or court fees. The Costs Draftsman will utilize the Civil Procedure Rules, namely CPR 47, to ensure that they have included all of the necessary costs.

In multi track cases, an electronic Bill of Costs is required. Instead of being in the format of a three column bill, it will be presented via an Excel spreadsheet. This style of Bill of Costs facilitates an easy filter between Budget phases, work types, tasks, and activities.

The Bill of Costs will be served upon the paying party with a Notice of Commencement.

From the commencement, the paying party will have an opportunity to scrutinize the Bill of Costs and dispute the costs that they disagree with. They will do this via their Points of Dispute. If they fail to commence negotiations or do not provide Points of Dispute within 21 days of receipt of the Notice of Commencement, a Default Costs Certificate will be filed. This certificate states that the paying party needs to pay the full amount on the Bill of Costs.

Once the paying party’s Points of Dispute have been received, the Claimant can prepare Replies to the Points of Dispute. Within this document, the Claimant can respond to the Defendant and defend the costs which have been challenged.

It is hoped that by this point the parties will have begun negotiations and will be close to settling the matter.

In cases where settlement is more complex, Alternative Dispute Resolution methods such as mediation can be effective.

If these methods have been attempted and settlement has not been successful, the case can proceed to court. The type of court hearings within Detailed Assessment Proceedings are divided into categories, the first being a Provisional Assessment Hearing. This type of hearing will take place if the Bill of Costs is under £75,000 in value. A court hearing will not be necessary as it will take place on paper. The bundle for a Provisional Assessment will contain the Bill of Costs, Points of Dispute, Points of Reply, and other relevant files.

Alternatively, if the Bill of Costs has a value over £75,000, a Detailed Assessment Hearing will take place in Court. Within the hearing, the Costs Draftsman or Costs Lawyer will present their Bill of Costs and make oral submissions in support of it. Alongside this, the paying party will have a representative to present their case.

Once the hearing has taken place, the successful party will receive their financial mismanagement claims costs from the paying party. In matters where the receiving party is successful, they will also be allowed the costs of the detailed assessment plus interest. 

Due to the importance and complexity of the above steps, it is vital to hire an expert to carry out the Detailed Assessment Procedure for the costs of your financial mismanagement claim.

How can ARC Costs Assist with Financial Mismanagement Claims Costs?

The recovery and negotiation financial mismanagement claims costs can be complex, which is why it is important to employ the assistance of a legal costs professional.

We understand the significance of legal costs and strive to achieve the best results for all of our clients. Our average result of 72% recovery on Bills of Costs attests to the hard work that we put into our cases.

With over 20 years of experience, our team of Costs Draftsman and Costs Lawyers can be trusted to attain the best result for your Financial Mismanagement claim for costs.

We act for both paying parties and receiving parties on these types of cases, drafting bills of costs, points of dispute and replies, as well as representing parties at Detailed Assessment Hearings.

Please contact us at 01204 397302 or info@arccosts.co.uk to find out more. 

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