In this post, I look at the law governing taxations of costs between lawyers and their clients, charged in litigation. It used to be that where the costs agreement was void, or it was disregarded for the purposes of the taxation because of material costs disclosure defaults, or there was no costs agreement which covered the relevant work, the taxation would proceed according to the relevant court scale.
In two cases (Shi and Re Jabe), the Court has found that scale is the appropriate basis for taxing costs in this situation. In others, where the Court considers that the client would not have done anything much differently had they obtained proper costs disclosure, and the costs charged were much the same as scale, or in accordance with what was being charged in a well-worked out market for a common kind of work, the Court has at an interlocutory stage told the lawyers that they can draw the bill of costs in taxable form by reference to the hourly rates in the void costs agreement, but that at the end of the day, the enquiry is what is fair and reasonable according to the criteria in s. 172 of the Legal Profession Uniform Law, noting also the considerations which may be taken into account in s. 200.
In other words, though the bill need not necessarily be drawn on scale anymore, nor is there the comfort that the lawyers will get at least scale. They might get significantly less than scale. Indeed, though I don’t know of it having been argued yet, they might get nothing, because, had the client been given proper disclosure they would never have embarked on the expensive exercise from which they gained no advantage.
Another thought: if the costs agreement is void, then though the hourly rate might still be able to be used for the purposes of the bill of costs in taxable form, the pernicious rounding up provisions in many costs agreements will be unavailable. A bill where many one, two or three minute attendances are charged at one ‘unit’ of 6 minutes or part thereof, would only be able to claim a fraction of the fees which were actually billed. Continue reading “Taxation of costs of litigious matters where there is no valid costs agreement at all or where the costs agreement is void”