What can barristers charge for?

As I mentioned in a couple of recent blog posts (here and here), I gave a talk to the Junior Bar Conference in 2017, so what follows is a few years old now. Youngsters were invited to ask questions in advance by some secret process, and one anonymous young thing asked the question ‘What can barristers charge for?’, which I thought to be an odd question indeed. But being an earnest fellow, I answered it. As follows:

The starting position is freedom of contract, such that barristers can charge for whatever they can get someone to promise to pay, though even in the absence of a costs agreement and even of any costs disclosure, barristers can still charge ‘fair and reasonable’ fees.  The costs provisions of the LPUL (the Legal Profession Uniform Law (Victoria)) mostly do not apply in favour of commercial or government clients and commercial and government third party payers.  There is newly room, therefore, for much greater creativity in contracting with such clients. Note the application of some provisions about conditional costs agreements and contingency fees, however, even in relation to such clients and such third party payers: s. 170.

What counsel can charge for under a costs agreement is obviously delimited by the scope of the work counsel promises in the costs agreement to do, and the instructor or client or third party payer promises to charge him or her for.  It is therefore desirable to my way of thinking, and not impermissible, to have a general costs agreement (e.g. ‘$250 per hour for any work you ask me to do for ExxonMobil or any subsidiary this year’) accompanied by matter-specific costs disclosures.  Because of the undesirability of getting costs disclosures wrong, it may be desirable to manage briefs such that multiple discrete ‘matters’ are treated as between counsel and instructor as being brought cumulatively into existence, if that is possible. But there is no reason why there needs to be a separate costs agreement associated with each ‘matter’ or with each retainer or with each costs agreement.

In a matter regulated by the LPUL, what counsel can charge in the absence of a costs agreement is more mysterious than it used to be. There is no LPUL equivalent of the 2004 Act’s s. 3.4.19 which was understood to make clear that counsel could charge scale (or on a fair and reasonable basis, if there was no applicable scale) in the absence of a costs agreement so long as it had not been expressly agreed that there would be no charge.

But there are some indicia of a right to charge what is ‘fair and reasonable’ in the special new ss. 172 and 200 sense, e.g. the note to s. 185(1), s. 185(2), and the terms of s. 178.  The tradition of the law is also reassuring.  Quite separately from s. 3.4.19, the courts have always been willing to infer payment obligations into engagements of lawyers, and indeed say that is the presumption, rebutted only by proof of an express agreement that fees would not be charged: Shaw v Yarranova Pty Ltd [2011] VSCA 55 at [17] et seq, but I have never been able to work out how they do so in light of provisions which void costs agreements (e.g. LPUL s. 185) entered into otherwise than in accordance with the relevant legislation (e.g. the LPUL’s s. 180(2) writing requirements).

The switch from provision for payment on scale to payment on a fair and reasonable basis, where there is no costs agreement, may represent a significant and as yet unappreciated change.  Where a comparatively commercially astute client has engaged a lawyer under a costs agreement which is voided for a relatively minor infraction of the disclosure provisions, what is fair and reasonable might be the rates provided for in the costs agreement, reduced to take account of any disadvantage suffered by the client by virtue of the non-disclosure.  That might be a lot more than scale.  Conversely, in a particularly simple or routine case, run principally by clerks, and not particularly well, scale allowances might be successfully argued to be considerably greater than what is fair and reasonable.

[See now Johnston v Dimos Lawyers [2019] VSC 462.]

Non-legal work

Barristers are less likely than solicitors to agree to do work associated with legal practice which is not actually legal work, e.g., arguably, acting as an administrator of an estate.  Professional costs should not be charged for work which is not legal work, and such fees are not amenable to taxation: Dal Pont, Law of Costs [5.40].  Such work should be invoiced separately, and not using a fee slip template.

Solicitors’ work

There is no principle of costs law that barristers may not charge for solicitors’ work, but barristers are obliged by our conduct rules not, in the course of practice as a barrister, to engage in work other than barristers’ work, which is now defined.  See rules 11-16. 

Express statutory prohibitions

Scores of Victorian lawyers failed to renew their practising certificates before the end of the financial year ending in 2016 and practised uncertificated for a period until they realised.  The Legal Services Commissioner refuses to issue practising certificates with retrospective operation. In some such cases it is illegal to charge for work done while inadvertently uncertificated, and fees received in ignorance of the problem must in those situations be refunded.  See LPUL s. 10(2).

Barristers cannot charge for preparing or serving a bill, including, apparently, an itemized bill: LPUL s. 191.  This is probably a codification of a specific instance of a broader proposition, namely that lawyers should not charge for documents created in their own interest rather than in their client’s interests.

Lawyers cannot charge an uplift if they have breached s. 182’s requirements: s. 185(3). We cannot charge anything at all if we have entered into an illegal contingency fee agreement: s. 185(4). Solicitors may not charge for giving a progress report as to unbilled fees under s. 190.

It seems to be a crime to charge for taking an affidavit: s. 123C(5) Evidence (Miscellaneous Provisions) Act 1958 (Vic.).

Only ‘fair and reasonable’ fees

What the Costs Court will allow on taxation is determined by a string of statutory criteria in ss. 172 and 199 – 200.  Until the LPUL, just because a fee would not be allowed on taxation did not mean it was illegal to charge it. What is new is that, by s. 172, the LPUL actually prohibits charging to clients other than commercial or government clients costs that are not ‘fair and reasonable’:

‘A [barrister] must, in charging legal costs, charge costs that are no more than fair and reasonable in all the circumstances and that in particular are—

  • proportionately and reasonably incurred; and
  • proportionate and reasonable in amount.’

Breach of s. 172(b) would represent a classic species of professional misconduct (see s. 298(a)) so any breach of the costs proportionality obligation can be seen clearly to carry potential disciplinary consequences.  Note also that ‘Charging more than a fair and reasonable amount for legal costs in connection with the practice of law’ is a specifically enumerated instance of professional misconduct: s. 298(d).  Once upon a time, the reference was to ‘grossly excessive’ fees.

A proper costs agreement is ‘prima facie evidence that legal costs disclosed in the agreement are fair and reasonable’ where there has been no disclosure breach: s. 172(4).

Further, s. 173 says:

‘[Counsel] must not act in a way that unnecessarily results in increased legal costs payable by a client, and in particular must act reasonably to avoid unnecessary delay resulting in increased legal costs.’

What all this means is for the moment anyone’s guess.  I will predict, however, that fees may be allowed as proportionate in the LPUL sense as between counsel and instructor / client and yet disallowed as between the parties to proceedings as having been charged in breach of the Civil Procedure Act 2010costs proportionality overarching obligation. Same word, two different statutes, two different meanings.

Traditional common law prohibitions

The law about what will not be allowed on taxation as between lawyer and client (or counsel and solicitor) is not particularly clear.  Where it is clear (e.g. to members of the Costs Court and a bunch of full-time costs lawyers) it is not particularly accessible.  A rare instance of an attempt to write down this law is to be found in the Queensland Legal Services Commissioner’s 21 November 2013 Regulatory Guide no. 8 ‘Billing Practices: Key Principles’.

One of the key principles asserted by the Commissioner is that lawyers should not charge clients for work done principally for their own benefit, e.g. drafting costs agreements, bills, equitable charges to secure fees, or responses to complaints made to the Legal Services Commissioner (oh, the number of times I have seen lawyers charge their clients for responding to disciplinary complaints, including complaints by their own client!).

I know of no authority as to whether lawyers may charge for complying with the disclosure obligations of legislation like the LPUL, but it would be foolish to assume unthinkingly that we can.

Queensland’s Regulatory Guide rails against counsel charging ‘cancellation fees’. See also the discussion in Dal Pont, Law of Costs, at [5.33] et seq.  Much about such fees is not particularly clear, but one thing is clear.  There is an acute over-confidence, especially amongst old-school counsel, about the propriety of charging daily fees for short appearances or any fees for cancelled appearances, in the absence of an express entitlement to do so within a valid costs agreement. Cancellation fees may be an instance of ‘unusual expenses’ unlikely to be recovered as between party and party and which are unrecoverable ‘under the rule in Re Blyth’ unless the client has expressly authorised them, knowing of the expense’s likely un-recoverability from the other side.

The traditional reluctance to allow fees for legal research has been relaxed, with specific allowances for research appearing in revised scales of costs which more generally look quite different today from how they were five years ago. But looking up how to draft a subpoena would still not be allowed on scale; there are some things that those who litigate are presumed to know.

Lawyers cannot charge more than once for the same work.  As to what this means, which is not particularly clear, see Bechara v Legal Services Commissioner [2010] NSWCA 369, but c.f. the decision about counsel in the same case: Legal Services Commissioner v Galitsky [2008] NSWADT 48[2008] NSWADT 153.

Lawyers ought not charge for work done remedying their own negligent errors (which may sometimes be established as part of a taxation), or for ‘useless, unnecessary or excessive costs’.  See Dal Pont, Law of Costs, at [5.24] et seq and [5.35] et seq.

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