Fees reduced for unconscionability where Legal Practice Act costs provisions did not apply

In Wilkins’s Case [2006] VCAT 2199, Mr Butcher was faced with an application under the Fair Trading Act, 1999 by a client who sought to avoid payment of two accounts in circumstances described in the previous post. The application was brought under the Fair Trading Act, 1999, though which provisions is not clear from the very brief reasons. The reasons are especially brief considering this is the first time to my knowledge that unconscionability provisions have been relied on to diminish legal fees payable by a solicitor because of a costs disclosure default. The solicitor sent a letter to the prospective client which set out the solicitor’s hourly rate but did not give an estimate of total fees. Mr Butcher found at [17]:

“The document … does not comply with s 86 of the Legal Practice Act 1996, which applied at the time. This dispute is not brought under that Act and the situation is that in relation to a dispute under that Act, I am empowered to reduce bills of costs where there has been a failure to comply with s 86 having regard to the seriousness of the failure to provide information. However, this dispute is brought under the Fair Trading Act 1999. I do, however, consider that an examination of whether the appropriate regulatory regime has been complied with is appropriate in deciding whether under the Fair Trading Act 1999 a determination should be made in favour of the applicant. There should have been more extensive advice given by [the solicitor] in relation to legal fees. It was practicable to do so . The failure to give this advice is unsonscionable.”

He knocked about 7.5% off the bill, rounding it down from $3,874 down to $3,000. The justification for this course is explained in the next post.

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