Patrick Oliver, the head honcho at a cool little Melbourne-based consultancy to incorporated legal practices called Lexcel, has drawn my attention to s. 101 of the Consumer Law, 2010. It provides for ‘consumers’ to request itemised bills from service providers, and requires that they be provided within 7 days, in default of which a pecuniary penalty may be levied. Sub-section (5) says ‘The supplier must ensure that the itemised bill is transparent.’
There is no carve-out for lawyers. I would not be surprised if the double-regulation is fixed by legislative amendment. Meanwhile, however, the full text of s. 101, which commences on 1 January 2011, is as follows:
‘101 Consumer may request an itemised bill
(1) If a person (the supplier), in trade or commerce, supplies services to a consumer, the consumer may request that the supplier give the consumer an itemised bill that:
(a) specifies how the price of the services was calculated; and
(b) includes, if applicable, the number of hours of labour that related to the supply of the services and the hourly rate for that labour; and
(c) includes, if applicable, a list of the materials used to supply the services and the amount charged for those materials.
(2) The request under subsection (1) must be made within 30 days after:
(a) the services are supplied; or
(b) the consumer receives a bill or account from the supplier for the supply of the services;
whichever occurs later.
(3) The supplier must give the consumer the itemised bill within 7 days after the request is made.
Note: A pecuniary penalty may be imposed for a contravention of this subsection.
(4) The supplier must not charge the consumer for the itemised bill.
Note: A pecuniary penalty may be imposed for a contravention of this subsection.
(5) The supplier must ensure that the itemised bill is transparent.
Section 2 defines ‘transparent’, in relation to a document, to mean:
‘(i) expressed in reasonably plain language; and
(ii) legible; and
(iii) presented clearly.’
Section 3(3) provides:
‘(3) A person is taken to have acquired particular services as a consumer if, and only if:
(a) the amount paid or payable for the services, as worked out under subsections (4) to (9), did not exceed:
(i) $40,000; or
(ii) if a greater amount is prescribed for the purposes of subsection (1)(a)—that greater amount; or (b) the services were of a kind ordinarily acquired for personal, domestic or household use or consumption.’
According to Thomson Reuters’ Advance Consolidation of the Competition and Consumer Act, the provision will apply only in relation to services provided from next year onwards.
I agree with Liz. One of the other issues is whether the threshold criteria is met eg the $40,000 limit and do we have a standard contract. None of this is to be found in the Legal Profession Act. Oh and another point – does the "Law" apply to a corporate entity seeking itemization? I say not. You will have to read Quick on Costs for the answer.
Stephen, Liz
The link to the Australian Consumer Law webpage
http://www.consumerlaw.gov.au/
It may very well be that the whole scope of the Consumer Law applies to all law practices, not just ILPs.
Will the legal profession finally be subject to "misleading & deceptive conduct" provision?
There are potentially other issues with this Stephen. Arguably, a breakdown of hours may be required even where the fee is fixed. Alternatively, there must be justification for the fixed fee. Could be interesting!