In Arya v TD  VCAT 923, Member Tang, a former President of the Law Institute now a full-time member of VCAT, had to decide what were the fair and reasonable costs (in the Legal Profession Uniform Law sense of that phrase) of more than 11 hours’ work by a Victorian barrister of 18 years’ call. The work product was a 23 page memo of high quality advice in a field in which the barrister had literally written the book. He had entered into no costs agreement and had given no costs disclosure, in a direct access brief.
Because the case reached VCAT via a costs dispute before the Victorian Legal Services Commissioner, there was an additional layer of fairness and reasonableness to be considered, compared with the same analysis in a taxation: s. 99 of the Application Act associated with the Uniform Law required the Tribunal to fix the costs in an amount which was ‘fair and reasonable in all the circumstances’, an invitation to palm tree justice if ever I heard one.
The barrister’s fee slip was for $10,175 calculated at $595 per hour reduced on a but say basis to $9,900. The fair and reasonable cost of the work was just over one-third of the larger figure, or $3,500, found Member Tang.
Until 2015, solicitors and barristers were entitled in the absence of a valid costs agreement to costs on the relevant court scale or, for non-contentious business, on the Practitioner Remuneration Order. Where there was a void costs agreement that entitlement was capped at the amount which would have been recoverable under the costs agreement. Since the introduction of the Uniform Law, how a lawyer recovers fees in the case of a void costs agreement is not spelt out, but since no one can ever recover fees from persons other than ‘commercial or government clients’ which are not ‘fair and reasonable’, the fees recovered certainly have to meet that criteria.
In those Uniform Law taxations where the Costs Judge has figured that the costs disclosure defaults might have been opportunistically seized upon by clients who had not been materially prejudiced by the defaults in question, Associate Justice Wood has been finding that the fair and reasonable costs may be prima facie calculated by reference to the void costs agreement in question. See, e.g., Johnston v Dimos Lawyers  VSC 462; Bennett v Farrar Gesini Dunn Pty Ltd  VSC 744; Cameron v Thomson Geer  VSC 75.
What this case demonstrates is that, in the case where a client really has been sucked into something they might not have signed up for if they had been given appropriate disclosure in advance, the fair and reasonable costs may be considerably less than the reasonable rate multiplied by the number of hours spent, and significant ‘penalties’ for non-disclosure and inutility may be operative.
By virtue of the direct access relationship between the barrister and the solicitor, the same law should apply in cases involving a solicitor and client.
Continue reading “A case under the Uniform Law about a barrister who had no costs agreement and gave no costs disclosure”