Costs recovery in pro bono cases in Victorian state courts: Part 3

I was asked to talk to my colleagues at the Victorian Bar recently in relation to costs recovery in pro bono cases. It is now more certain that costs may be recovered from the other side by victorious litigants who engage their lawyers on the basis of a greater variety of pro bono arrangements. That is as a result of both recent developments in the judge-made law and changes to the Supreme and County Courts’ rules. Over the last few days, I published parts one and two of the paper I distributed. What follows is the third and final part, which considers different kinds of client-favourable costs agreements (some quite esoteric) and analyses their indemnity principle implications.  It also provides some thoughts on how to draft costs agreements for work done otherwise than on a purely commercial basis, and how to ensure counsel get paid. Part one is here and part two here


Species of client-favourable costs agreements

Options available to lawyers who wish to do work at less than their usual rates for non-commercial reasons include:

(a) not making any arrangements as to fees at all;

(b) charging your usual rates and leaving it to your discretion whether you send out a bill, or whether you forgive some or all bills given in the event that certain outcomes obtain;promising to do the work for free;

(c) agreeing to do the work at a reduced rate;

(d) doing the work on a no win = reduced fee basis;

(e) doing the work no win = no fee;

(f) doing the work no costs order = no fee;

(g) doing the work on no actual recovery of costs / compensation / costs or compensation = no fee basis. Continue reading “Costs recovery in pro bono cases in Victorian state courts: Part 3”

Costs recovery in pro bono cases in Victorian state courts: Part 2

I was asked to talk to my colleagues at the Victorian Bar recently in relation to costs recovery in pro bono cases. It is now more certain that costs may be recovered from the other side by victorious litigants who engage their lawyers in a greater variety of pro bono bases. That is as a result of both recent developments in the judge-made law and changes to the Supreme and County Courts’ rules. Over the next few days, I will publish, in digestible chunks, the paper I distributed. What follows is the second part. Part one of this article is here.


Case law

The Court of Appeal declared that the indemnity principle is not offended by a costs agreement which is conditional on the client obtaining a costs order in Mainieri v Cirillo (2014) 47 VR 127. In that case, the successful party’s solicitors’ costs agreement said: Continue reading “Costs recovery in pro bono cases in Victorian state courts: Part 2”

Holy moly! VCAT finds costs agreement void for ambiguous disclosure then orders solicitors to content themselves with original estimate

VCAT has published reasons, the first I’ve come across, dealing with the allowance of costs under a costs agreement void for disclosure defaults: Sleath v RGL [2017] VCAT 1998.  Though they do not say so, it seems that the principal logic of the determination, under the same principles as the Costs Court is required to have regard to in taxations, was to keep the practitioners to their original written estimate notwithstanding subsequent oral updates. Scary stuff for lawyers if other decision makers reason similarly.  Whether the Costs Court will reason similarly is an interesting question.  It may be more likely that the Legal Services Commissioner will feel compelled to adopt similar reasoning in those costs disputes which it determines itself rather than referring off to VCAT.  Good news for clients and third party payers if so. Continue reading “Holy moly! VCAT finds costs agreement void for ambiguous disclosure then orders solicitors to content themselves with original estimate”

Suit for fees goes badly wrong but could have gone much worse

An ACT practitioner seems to me to have been skilfully represented, escaping with findings of unsatisfactory professional conduct, a reprimand and a fine.  The decision in Council of the Law Society of the ACT v LP [2017] ACAT 74  just shows how far cooperation and a persuasive articulation of remorse and insight can go.

The practitioner illegally sued his former client for fees in circumstances where he knew that the very person who had instructed him, a director of the client who had given a director’s guarantee and so was a third party payer, had sought taxation.  Generally speaking, solicitors cannot sue their clients for fees once the client has commenced taxation.

In support of applications for default judgment, and to wind up the corporate client, the practitioner represented to the court, including on oath, that there was no dispute about fees.  Given that the director, a builder, was the alter ego of his building company client, the proposition that the company did not dispute the fees attracted a charge of professional misconduct by swearing a false affidavit, a thoroughly serious allegation.  By a plea bargain, it was downgraded to a weird charge of unsatisfactory professional conduct (varied by me for readability):

The practitioner breached his general law ethical duty of professional conduct or the duty owed to the director of his former client pursuant to Rule 1.1 of the Legal Profession (Solicitors) Rules 2007 to continue to treat the former client fairly and in good faith, and not to treat it otherwise than in an honourable and reputable manner during the dispute over costs owed by the director or the former client.

Rule 1.1 was itself a weird old rule:

‘A practitioner should treat his or her client fairly and in good faith, giving due regard to the client’s position of dependence upon the practitioner, his or her special training and experience and the high degree of trust which a client is entitled to place in a practitioner.’

Perhaps the horribleness of the original false affidavit charge’s drafting contributed to the prosecution’s willingness in the end to back away from it and retreat into the weirdness set out above.  The original charge (again, varied by me for readability) was: Continue reading “Suit for fees goes badly wrong but could have gone much worse”

Judges’ referrals to the ATO, police, Legal Services Commissioners

Often enough, judges refer the conduct of lawyers appearing before them (or disclosed by the case they are adjudicating) to the Legal Services Commissioner for investigation.  A recent example is Re Manlio (no 2) [2016] VSC 130.  Judges also refer the conduct of non-lawyer parties to investigative agencies, e.g. where a tax fraud is suggested by evidence in the case.

Generally, this is not done pursuant to any statutory directive or authority.  An exception is s. 202 of the Legal Profession Uniform Law which requires the Costs Court to refer a matter to the Legal Services Commissioner if it considers that the legal costs charged, or any other issue raised in the assessment, may amount to unsatisfactory professional conduct or professional misconduct.  (Compare s. 3.4.46 of the Legal Profession Act 2004 which authorised rather than required the Taxing Master to make a referral.)

I have never been particularly clear about the nature of such a referral, or as to the procedures which ought to be followed. Gibson DCJ set out the principles recently, at least as they apply in NSW, in Mohareb v Palmer (No. 4) [2017] NSWDC 127: Continue reading “Judges’ referrals to the ATO, police, Legal Services Commissioners”

Applicant brings case beyond jurisdiction; respondent doesn’t take the point until the last minute; no one gets costs

Jasmin Solar Pty Ltd v Fitzpatrick Legal Pty Ltd [2017] VSC 220 is a little case, but it is instructive about a number of things: solicitor-client taxations can take an awfully long time; some businesses probably don’t understand that they are ‘commercial clients’ and so fail to negotiate rights in lieu of the rights to seek taxation which, under the LPUL they no longer have; some lawyers no doubt have standardised disclosures which advise their clients that they have rights which, if they are commercial clients, they do not have; the costs proportionality provisions extend to cases where costs have become disproportionate as a result of a simple oversight by one or other side’s lawyers.

Continue reading “Applicant brings case beyond jurisdiction; respondent doesn’t take the point until the last minute; no one gets costs”

Legal Services Commissioner’s new decision making powers

The Victorian Legal Services Commissioner has published a report on his new proactive regulation of the profession.  It tells how risk profiles of practices are being constructed with the assistance of academics to target trust audits and audits of firms more generally (a new thing for law practices which are not ILPs).  It also tells about the exercise of the power to make binding decisions, and alerted me to the fact that the Commissioner now publishes redacted versions of costs determinations at this page. The report says: Continue reading “Legal Services Commissioner’s new decision making powers”

Third party payer taxations where client bankrupt: WASCA

In Iron Mountain Mining Ltd v K & L Gates [2016] WASCA 166, the appellant, a listed company, had indemnified one of its directors against the legal costs of lawyers defending the director in criminal charges.  Companies can do this on the basis that the director must repay the costs if he pleads or is found guilty, since it is illegal to indemnify a costs liability incurred as an officer of the company if the costs are incurred in defending or resisting criminal proceedings in which the person is found guilty: ss. 199A-C Corporations Act 2001Note Printing Australia Ltd v Leckenby [2015] VSCA 105; (2015) 106 ACSR 147 [65]. The company paid more than $500,000 in respect of the fees prior to the guilty plea.

The director went bankrupt.  The company applied for taxation of the director’s solicitors’ fees.  By that time, the director had pleaded guilty to some of the charges.  The company was a non-associated third party payer; it promised to pay the lawyers’ fees, but its promise was made to the director and not to the lawyers. The Court found that the right given to third party payers to seek taxation did not adjust the interests of the client and the lawyers; it only adjusted the interests between the third party payer and the client: Continue reading “Third party payer taxations where client bankrupt: WASCA”

Yet more on the obligation on Legal Services Commissioners to plead their case properly and stick to it

Legal Services Commissioner v AL [2016] QCAT 237 is a decision of a disciplinary tribunal presided over by Justice David Thomas, President of QCAT and a Supreme Court judge. It is therefore of high persuasive value, and treats Queensland provisions which are the same as the equivalent Victorian provisions. And it provides what I suggest with respect are the correct answers to the following questions:

  • How negligent do you have to be before you can be found guilty of unsatisfactory professional conduct as defined in provisions which say that the concept includes ‘conduct that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent’ lawyer holding a practising certificate? (Answer at [44] and [27]: substantial and very obvious fallings short of the standard, established by direct inferences from exact proofs.)
  • What must be pleaded specifically in a disciplinary charge? (Answer at [82] – [92]: all states of mind, not only dishonest intents, and all facts to be relied on (‘the charges to be levelled must be fully and adequately set out in the Discipline Application. As a matter of procedural fairness, the Practitioner should not be left in any doubt as to the extent of the allegations that is to be met.’)
  • To what extent is a disciplinary tribunal constrained in its decision making by the allegations specifically made in the charge? (Answer at [96] – [108]: absolutely: if no state of mind is alleged, the prosecution should not be allowed to call evidence as to state of mind; ‘it would be wrong to admit evidence the principal purpose of which is to establish conduct that lies beyond the ambit of the charge’.)
  • Does the mere fact that charges are not allowed on taxation mean that there has been overcharging such as to warrant discipline? (Answer at [76] – [77]: no)

The Tribunal dismissed charges against a solicitor who lodged a caveat pursuant to an equitable mortgage without checking that it satisfied the Statute of Frauds’ writing requirements and against a partner of her firm who took over her files when she was on holidays and billed the client for the work in attempting unsuccessfully to register the caveat.

I move from the specific facts of this QCAT case to general comment (what follows is certainly not veiled reference to the conduct of the Commissioner’s counsel in QCAT). There is a very real reason to insist on the particularization of states of mind in disciplinary tribunals, including particulars of actual and constructive knowledge. These details do not always get left out just because it is thought that disciplinary tribunals are not courts of pleading and such minutiae is not appropriate. Nor do they just get left out because they are thought to be inherent in the allegation, or because of incompetence, or mere mistake. Rather, they get left out because bureaucrats have investigated incompetently and when competent counsel come to plead disciplinary applications based on the investigation, they do not have a sufficient factual foundation to make these allegations, or perhaps are simply too timid.

But sometimes counsel with civil practices, untutored in the art of prosecutorial restraint, and safe in their private belief that the practitioner is in fact much more evil than incompetent investigation established, might fall prey to temptation. Mealy-mouthed, ambiguous allegations might be made which require the practitioner to get into the witness box. Then, all manner of unpleaded allegations as to states of mind and as to completely un-pleaded conduct, justified in relevance as tendency evidence or circumstantial evidence of the pleaded facts, might be cross-examined out of the practitioner and an unpleaded case presented to the disciplinary tribunal in closing. In a tribunal not bound by the rules of evidence, such questioning may be waved through with lip service to the proposition that objections will be dealt with by according appropriate weight to the evidence in the final analysis. Queensland leads the charge against such conduct, and I can’t help thinking it’s because Supreme Court judges seem to get involved in disciplinary decisions more often up there. All power to them. So impressed am I with this latest judgment, I have decided to go on a study tour of the Sunshine Coast in the September school holidays.

Continue reading “Yet more on the obligation on Legal Services Commissioners to plead their case properly and stick to it”

Advocates’ immunity: at once more powerful and narrower than most yet understand

Advocates’ immunity was, until recently, more powerful than many lawyers were aware. Since the 1 July 2015 introduction of the Legal Profession Uniform Law and the High Court’s May 2016 decision in Attwells v Jackson Lallic Lawyers Pty Limited,[1] however, it may be narrower than many realise. And perhaps not everyone is aware that the immunity these days is very likely peculiar to Australia; it is certainly not a feature of English, American, Canadian, Continental, Indian, South African or New Zealand law.[2] Continue reading “Advocates’ immunity: at once more powerful and narrower than most yet understand”

Applications to extend time to tax lawyers’ bills: keep ’em tight

Many disputes about costs are still governed by the Legal Profession Act 2004.  It specified as the time in which to seek taxation a period of 12 months.  Where a bill is given, the 12 month period starts from the date of service of the bill.  But since Collection Point Pty Ltd v Cornwalls Lawyers Pty Ltd [2012] VSC 492, it is clear that clients have until 12 months after the service of the final bill in any particular matter to seek taxation of any previous bill.  Of course what is the final bill in the same matter is a difficult question.  What is clear is that one costs agreement may govern several matters.

Applications to extend time must be made to a Justice of the Supreme Court (as opposed to any decision maker in the Costs Court or any Associate Justice) under s. 3.4.38(6).  The law is well-summarised by John Dixon J in Rohowskyj v S Tomyn & Co [2015] VSC 511, and his Honour’s guidance about the nature of an extension of time application is useful and prone to be overlooked: Continue reading “Applications to extend time to tax lawyers’ bills: keep ’em tight”

Man fails to set aside compromise of taxation of costs despite drunkenness from allergy tablets

A man took 5 times his usual dose of phenergan before a mediation in a Costs Court matter in which he sought to tax his former solicitor’s fees.  Represented by a solicitor, he settled the taxation.  It is an interesting footnote that the man’s solicitor was from the rather wonderfully named Coolabah Law Chambers, and is described on the firm’s website as follows:

‘Although Jeff has sincere respect for the Bench, he is not afraid to argue and fight for his clients.  Jeff believes that each of his clients must be properly represented and must receive a ‘fair go’.  To appreciate Jeff’s keenness one has only to learn of one occasion when, during his closing address to the jury, Jeff performed an impersonation of Austin Powers in “The Spy Who Shagged Me”.  Jeff’s client was successful in that case!’

The man applied, unrepresented, to the Costs Court to have it set aside on the basis of the solicitor respondent to the taxation had taken unconscientious advantage of his phenergan intoxication in procuring the settlement.  The Costs Court referred the question to the Practice Court.

The Practice Court considered whether the determination of a mixed question of fact and law was one which could be the subject of a referral by the Costs Judge for ‘directions’ to a judge of the trial division under r. 63.51.  Bell J said it could.

But his Honour ruled that the Costs Court did not have jurisdiction to hear that question and so made the man commence a fresh Supreme Court proceeding for a declaration: [2015] VSC 417.  Bell J found that the Costs Court is a ‘statutory court of limited jurisdiction’.  That is interesting because presumably when the same work was done by the Taxing Master, the Supreme Court itself would have been exercising its unlimited jurisdiction so the creation of this Costs Court has complicated things.

Bell J found that the Costs Court did not have jurisdiction and so could not refer the proceeding to the Practice Court. The question which, on one characterisation, was whether the Costs Court should enforce a settlement of a Costs Court proceeding at a mediation ordered by the Costs Court was not one arising in the course of ‘assessment, settling, taxation or review of costs’ and so not within the Costs Court’s jurisdiction as described in s. 17D of the Supreme Court Act 1986.  Not even within the grant of such additional power to the Costs Court as is necessary to do its job in sub-s. (2).  Emerton J’s decision in Gadens Lawyers v Beba Enterprises [2012] VSC 519 about the Costs Court’s jurisdiction was not cited to Bell J, who reasoned:

‘It is true that, in the circumstances of the present case, the issues raised by the application to set aside the agreement are connected with the ‘assessment, settling, taxation or review of costs’ because, in great part, the agreement settled the issues relating to those matters in the Costs Court.  But a connection with those matters is not enough.  The issues must actually relate to those matters.  The issue is not that the set-aside application raises substantive issues of mixed fact and law, which it does, but that those issues do not relate to the ‘assessment, settling, taxation or review of costs’.’

So the man duly commenced a new proceeding which a judge of the Court referred back, perhaps a little paradoxically, to an Associate Justice who was not the Costs Judge for determination.  If you’re expecting a happy ending for the doughty self-represented client-plaintiff after this procedural buffeting, I can’t help you.  Derham AsJ found that the solicitors had been ignorant of any excema-related intoxication under which the plaintiff laboured and dismissed his application to set aside the settlement: EO v Bolton & Swan Pty Ltd [2016] VSC 91.

When can lawyers contract out of taxation (part 3)

This is part 3 of a post about the circumstances in which lawyers can avoid having their fees taxed.  Parts 1 and 2 are here and here.  In GLS v Goodman Group Pty Ltd [2015] VSC 627, Macaulay J held that an accord and satisfaction which was found to have been made in relation to fees previously rendered for work already done was not a ‘costs agreement’ in the sense of that expression in the now-repealed but still operative Legal Profession Act 2004, so that the prohibitions on contracting out of taxation in costs agreements, and the writing requirements for costs agreements were not applicable.  His Honour distinguished Amirbeaggi and Jaha, discussed in the two previous posts, explaining that he was following Beba.

Justice Macaulay ruled: Continue reading “When can lawyers contract out of taxation (part 3)”

When can lawyers contract out of taxation? (part 2)

This is part 2 of a post about in what circumstances lawyers can avoid having their fees scrutinised by the Supreme Court by the process traditionally known as ‘taxation’, but more recently also described in statutes as ‘costs review’ and ‘costs assessment’.  Part 1 is here. First, a disclosure: I argued Beba at first instance, for the lawyers, and advised in the appeals.

In Beba Enterprises Limited v Gadens Lawyers [2013] VSCA 136, a borrower promised the lender to pay the lender’s legal costs if they defaulted.  Of course, they did default, and the lender demanded a sum which included an allowance for the lender’s legal fees occasioned by the default. The borrower and lender compromised their dispute, including in relation to the legal fees payable.  Nevertheless, the borrower sought taxation of the lender’s legal fees by issuing a summons for taxation addressed to Gadens Lawyers, the lender’s solicitors. Continue reading “When can lawyers contract out of taxation? (part 2)”

When can lawyers contract out of taxation? (part 1)

Often enough, lawyers would love to avoid having their costs taxed.  Under the repealed but still operative Legal Profession Act 2004, lawyers could contract out in advance of the obligation to have their fees reviewed by taxation with ‘sophisticated clients’, but I do not recall ever having seen anyone attempt to do so.

When lawyers have not complied perfectly, vis-a-vis unsophisticated clients, with the costs disclosure regime under the repealed but still relevant Legal Profession Act 2004, they could not recover their fees unless there had been a taxation: s. 3.4.17.

It was clear that unsophisticated clients could not validly agree to waive in advance of the fees being incurred their right to tax their lawyers’ charges. But what about if the solicitors entered into a compromise of a dispute about their already rendered fees with their client?

How did the law of accord and satisfaction apply? (Accord and satisfaction is the litigation estoppel equivalent to res judicata when a dispute is compromised or ‘settled’ rather than adjudicated upon.)

Can lawyers get certainty and avoid further disputation (including taxation) in return for a discount on their fees?  Can they get around the s. 3.4.17 prohibition on recovering fees in cases of disclosure defaults unless they have been taxed?  If a taxation is commenced and then compromised, I would think there was no doubt that the fees have been ‘taxed’ for the purposes of this rule, especially if the compromise were embodied in orders finalising the taxation.  But what if the compromise occurs without any summons for taxation having been issued? Need the compromise comply with the formal requirements for costs agreements on the basis that they are agreements about the payment of legal costs which have been which have been charged for the provision of legal services?  Does the accord have to state expressly that the client waives the right to taxation?

It seemed until recently, that lawyers could not preclude taxation by compromising a dispute with a client or associated third party payer about fees, because such agreements would amount to a ‘costs agreement’ under the Legal Profession Act 2004.  Costs agreements were defined, after all, to mean ‘an agreement about the payment of legal costs’: s. 3.4.2, where ‘legal costs’ were defined by s. 1.2.1 to mean, amongst other things, ‘amounts that a person has been … charged by … a law practice for the provision of legal services…’).  And the Act prohibited unsophisticated clients from contracting out of their right to taxation.  Attempts to do so were void: ss. 3.4.26(5), 3.4.31.

The cases in this blog post (Amirbeaggi (NSWSC, 2008) and Jaha (SCV, 2012) explain why unsophisticated clients were apparently equally unable validly to waive their right to taxation after the fees had been incurred as they were unable to do so in advance, by virtue of the breadth of the definition of ‘costs agreement’.

Subsequent blog posts will consider what the Court of Appeal has had to say in a case indirectly on point, and explain the true state of the law in Victoria, as declared by the Supreme Court. It seems now that Victorian lawyers in dispute with their clients can buy their way out of taxation by giving clients a bit of a discount, and that this can occur without any writing or other formalities associated with ‘costs agreements’, and without any express reference to the future unavailability of taxation.  The client need not even be aware that they are giving up their right to taxation.  And that is so because agreements about how much a lawyer will accept in full and final satisfaction of their claim for fees already rendered for work already done are not ‘costs agreements’ governed by the Act after all. Continue reading “When can lawyers contract out of taxation? (part 1)”

Transitional arrangements for costs provisions of Legal Profession Uniform Law

Further update, 15 February 2017: The Victorian Legal Services Commissioner has formally advised me, and authorised me to tell you, that he will treat the transitional provisions as meaning that where the solicitor’s retainer is governed by the 2004 Act, so too will barristers’ retainers by the solicitor be governed by that Act, even if the brief post-dates the 1 July 2015 commencement of the LPUL.

Update: The position of the post-1 July 2015 briefed barrister briefed by a solicitor retained pre-1 July 2015 is not as clear as I suggested below.  So now it’s me who’s arguably been disseminating misinformation: my apologies.  But it seems to me that there has plainly been a drafting error.  Certain that I knew what the intention of the transitional provision was, I overlooked what the actual words of cl. 18(2) say:

‘If a law practice [read ‘barrister’] is retained by another law practice [read ‘solicitor’] on behalf of another client [read, I would suggest, ‘a client’] on or after [1 July 2015] in relation to a matter in which the other law practice [read ‘solicitor’] was retained by the client before [1 July 2015]—

(a)  Part 4.3 of this Law does not apply in respect of the other law practice [as drafted, this must be a reference to the solicitor, and this is the error] in relation to that matter; and

(b)  in that case the provisions of the old legislation relating to legal costs … continue to apply.’

As drafted, there is no point to the provision.  It is otiose in the context of cl. 18(1), which is said to be subject to sub-clause (2).  It is beyond doubt in my mind that what was intended was a provision cognate with the similar provision in the Legal Profession Act 2004, which is as follows:

‘(2)     Part 3.4 of this Act does not apply in respect of a law practice that is retained by another law practice on behalf of a client on or after the commencement day in relation to a matter in which the other law practice was retained by the client before the commencement day and in that case Part 4 of the old Act continues to apply.’

If the transitional provision as enacted is given its literal meaning, which given the apparent absence of ambiguity might require sophisticated argument to avoid, then the absurd situation will arise where one part of the legal team is regulated by one Act and the other by another.  This may well be a situation where the provision is read to mean something other than what it plainly seems to say in order to avoid an absurd result which parliament could not be taken to have intended.  Nevertheless, the answer should lie in retrospective amendment, and I believe that this problem will now be raised urgently at the highest levels, so I will keep you posted.

Original post: Misinformation about the transitional provisions for the new law regulating legal practice set to commence on 1 July 2015 is circulating around the Bar.  Most people seem to understand that the question of whether the Legal Profession Act 2004 continues to have operation to a solicitor’s retainer after its repeal or whether the Legal Profession Uniform Law applies is answered by working out when instructions were first taken in ‘the matter’.  (Let me digress for a moment. What a ‘matter’ is is not defined in the new Law (or the old Act), and remains a mystery to the world of costs law, although some guidance may be found in Darkinjung Local Aboriginal Land Council v Darkinjung Pty Ltd [2010] NSWSC 132.  It is not clear that ‘matter’ and ‘retainer’ are co-extensive, and nor is it clear that a ‘matter’ is equivalent in scope to the scope of a ‘costs agreement’ which is applicable: that, I think we can say with some confidence.  Generally, parties may agree as between themselves on what a statute is to be taken to mean.  Those who take a sophisticated approach to handling costs disclosures under the new Law are likely to reduce the scope of their risk by carefully defining what a ‘matter’ is.  More about that anon, perhaps, but the broader the retainer the more difficult the task of estimating total legal fees, and if the ‘matter’ in respect of which disclosure must be given may be attenuated by agreement, that would seem sensible from the lawyer’s point of view.  Clients ought resist such an approach and actually ask what they want to know (e.g. how much might this litigation you’re proposing for me cost if the other side appeals all the way to the High Court and things go as pear shaped as can be imagined, and what are my chances of getting out of it without having to pay the other side’s costs at different points along the way?).)

What seems not to be appreciated is that which law applies to a barrister’s brief by a solicitor (as opposed to a direct access brief) depends on which law applies to the solicitor’s retainer.  So a solicitor first instructed in relation to a matter prior to 1 July 2015 will continue to be governed by the old Act, and a barrister first briefed by that solicitor in that matter (or re-briefed in it for that matter) after 1 July 2015 will continue to be bound by the old Act too.  The transitional provision is cl. 18 of Schedule 4 to the Legal Profession Uniform Law Application Act 2014 and sub-clause (2), apposite to barristers, is set out at the end of the post. Continue reading “Transitional arrangements for costs provisions of Legal Profession Uniform Law”

Unqualified costs consultants

There has been another challenge to the legality of the work done by non-lawyer costs consultants.  It did not go anywhere because of deficiencies in the way the client (himself a lawyer) went about trying to prove in the Magistrates’ Court that the costs consultant in question (a struck off lawyer) had engaged in unqualified practice, and because of the limited nature of an appeal from a Magistrate. The Supreme Court’s judges also emphasised the exactness of proof necessary to establish a breach of s. 2.2.2 Legal Profession Act 2004‘s prohibition on unqualified practice, given that it sets up an indictable criminal offence punishable by up to 2 years’ jail.  Such exactness is needed even in civil proceedings which obviously do not carry criminal consequences.

But as three judges of the Supreme Court made clear, all this means is that this was not the vehicle to decide just how much non-lawyers are permitted to do in the realm of costs law, and subject to what level of supervision by a lawyer, and there is little solace for unqualified costs consultants in the judgments.

The reasons of the Court of Appeal for not granting leave to appeal the Supreme Court’s dismissal of an appeal from a Magistrate are: Defteros v JS [2014] VSCA 154.  They are interesting for three reasons:

1.  They endorse comments made by the Costs Judge in a June 2010 decision as to the need for consideration of reform of the ‘mini-industry’ of costs consultants (Kaye J did so at [2014] VSC 205 at [85] and Santamaria JA (with whom Neave JA agreed) did so at [2014] VSCA 154 at [21]);

2.  They record an interesting submission of counsel, namely that the solicitor client was relying on his own contempt of the Supreme Court by asserting as a defence to a suit for fees a statutory prohibition on the recovery of money charged for the provision of legal services in contravention of the prohibition on unqualified practice — the contempt arose, so the argument ran, because the solicitor well knew at all relevant times that the costs consultant was not a practising certificate holder, and so had permitted the costs consultant to engage in unqualified practice if it had occurred, contrary to s. 2.2.10 of the Legal Profession Act 2004; and

3.  They emphasise the modern trend of leaving to the Costs Court questions which have traditionally been dealt with by certificates of the trial judge (e.g. certification for two counsel).

It will not be too long before someone takes a grip of this issue and runs a test case carefully.  An alternative battle ground might be found if the unqualified costs lawyers seek to influence the makers of the forthcoming Uniform Rules of professional conduct so as to provide an exemption for unqualified costs lawyers from the prohibition on unqualified practice: see s. 10(3), Legal Profession Uniform Law (Vic).  That seems to me to be the most efficient means of resolving the question.  In my books, if there is to be a place for the continued operation of unqualified practitioners there may be a case for restricting the exemption from unqualified practice to existing practitioners and closely defining the permissible ambit of their activities, perhaps to party-party disputes. Continue reading “Unqualified costs consultants”

Reviews of decisions of the Costs Court’s Judicial Registrar

The Costs Judge recently clarified the procedure for seeking review of a decision of a Judicial Registrar on a preliminary point of law in a taxation of costs in the Costs Court.  Essentially, his Honour said, the procedure in r. 63.56.2, mutatis mutandis, will generally be appropriate, including the 14 day time limit referred to in it.  In relation to this kind of decision of a Judicial Registrar, the review goes straight to the Costs Judge, unlike in the case of rulings upon items in a bill of costs during the taxation proper, where there is a bizarre requirement for the Judicial Registrar to reconsider her own decision before it may be appealed to the Costs Judge. Continue reading “Reviews of decisions of the Costs Court’s Judicial Registrar”

Free tickets to a great seminar

I’m chairing what should be a great seminar for litigators at Melbourne’s RACV Club on 28 August 2013.  Judicial Registrar Meg Gourlay who is one of the two decision makers who is handling most of the solicitor-client taxations in the State at the moment is the lead singer, talking about the changes to Order 63 of the Supreme Court Rules and the new Supreme Court scale which is no doubt the harbinger of new scales in other courts too.  Despite my complete failure as a blogger to bring them to your attention, these are big changes: so big I have never quite got around to writing a post about them, a bit like the post about the decision in Fritsch v Goddard Elliott.  So it is well worth finding out what the Costs Court figures they mean.  Apart from anything else the more mysterious bits have been chopped out of the scale which means that lay lawyers uninitiated in the dark arts of that most mysterious of cabals — the costs lawyers — might actually be able to draw bills themselves with a bit of orthodox education, a spot of which the Judicial Registrar is going to engage in.

The band is pretty hot too.  Anna Sango has bravely taken on the task of speaking about a strange new concept getting a workout at the salons of the most elegant cost lawyers: ‘proportionality’, absolutely all the rage I’m told amongst aristocrats in England whose favourite pastime seems to be inventing more rules for that greatest of all English board games, litigation.  Frankly, it seems like a dangerously French concept to me, a sly limit on the individual’s right to litigate matters of principle and bugger the expense, but Sango will no doubt tell us that it’s more nuanced than that.  Then, after all that esoterica, Paul Linsdell, one of the head honchos of the behemothic Blackstone Legal Costing will speak on tips and traps when arguing costs in litigation.  The traps are newly refreshed thanks to the subject matter of Judicial Registrar Gourlay’s talk, and so this hoary old chestnut of a topic will be worth a listen.  And then Debra Paver, who has given evidence in a few security for costs applications in her time, will speak on the inherently useful subject of how to argue for and against such applications.

I have two otherwise unbelievably expensive tickets available for enticing supplicants.

Limit on the unrecoverability of unusual expenses principle in Victoria

I had to read Abrahams v Wainwright Ryan [1998] VSC 335; [1999] 1 VR 102 from start to finish recently.  I noticed the paragraph the subject of this post which, it seems to me, might be useful in arguing in Victoria against a submission in a solicitor-client taxation that an expense should not be allowed because it was unusual and the unusualness not brought to the attention of the client before it was incurred.  The paragraph suggests that a failure to warn itself is insufficient to require its disallowance, at least where the lawyer suggests that even had the warning been given the client would have authorised the incurring of the cost. Continue reading “Limit on the unrecoverability of unusual expenses principle in Victoria”