Solicitor gets away with fees of $83,000 after estimating at $2,500 and never updating

Ok, ok, that’s a bit of an exaggeration, but the solicitor did put out a costs agreement and fee disclosure document which contained no estimate other than $2,500, and did charge $111,000, which was reduced on an assessment — a NSW privatised version of taxation — and did not provide any re-estimates before putting out the first bill for $88,000. Savings Factory Pty Ltd v Daniel [2007] NSWSC 1343 is a useful case to illustrate that failure to comply with costs disclosure regimes is not the end of the world for lawyers. You just have to get the costs taxed at your expense.  Justice Palmer held that the estimate was just an estimate, and was confined to one part of the work which was to be the subject of the retainer (no estimates were provided in respect of the other work).  Here, the client maintained the solicitor’s retainer long after receiving the initial bill.

The case also illustrates another principle which you would think lawyers would get fairly readily, but which, sadly, we don’t.  It is that you can’t just put your rates up whenever you feel like it.  One reason why about 20% was taxed off the bills was that the lawyer’s rates were allowed only at the rate originally provided for under the costs agreement.

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