Costs Disclosure Obligations Under the Legal Profession Act 2004 (Vic)

The legendary foundation author of Quick on Costs, Roger Quick, has asked me to put this old workmanlike paper on my blog so that he can cite it and link to it in the second edition of that monumental text which he is kindly working on for all our benefits.

What follows does not deal with any developments in the law since 2010, or indeed anything I have learnt since 2010, when I delivered the paper, and so it is out of date, but it might still be of use in some jurisdictions which have not adopted the Legal Profession Uniform Law or by analogy in some cases which are governed by that law.  Sorry about the formatting, which is the product of copying and pasting a Word document into WordPress.

1. Summary

This paper does not deal with contingent, or no-win no-fee retainers.  In relation to all other matters, the take-home points are these: Continue reading “Costs Disclosure Obligations Under the Legal Profession Act 2004 (Vic)”

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”

Qld solicitors referred to Legal Services Commissioner for demanding outrageous sum as condition for handing over file on their wrongful termination of no-win no-fee retainer

Ireland v Trilby Misso [2011] QSC 127 is a sorry tale which did not end well for the solicitors who were found to have repudiated their retainer by terminating without good cause, ordered to hand over their file to Mr Ireland’s new solicitors, ordered to pay costs, and referred to the Legal Services Commissioner.  The decision is interesting because it looks at the consequences of terminating a no-win no-fee retainer and also considers the relevance to a civil dispute of the conduct rules governing ownership of files on a change of solicitor. Continue reading “Qld solicitors referred to Legal Services Commissioner for demanding outrageous sum as condition for handing over file on their wrongful termination of no-win no-fee retainer”

No problem with solicitors asserting liens over passports

Passports remain property of the government even after they have been issued, and it is a crime to have in your possession or control the passport of another without a reasonable excuse: ss. 6A and 9A Passports Act, 1938.  A solicitor may exercise a lien over property of the client received by her in the course of a retainer.  Is a client’s passport a document over which she may assert such a lien? The answer is yes, because the client’s status as bailee of the passport is a sufficient proprietary interest for the purposes of lien law to bring it within the class of things, as against the client, over which a lien may be exercised: CYX v Council of the Law Society of NSW [2009] NSWCA 430.  Another aspect of this decision is the subject of this post.

Giant solicitors’ lien case

The Supreme Court of NSW recently delivered a giant decision about a solicitor’s costs agreement and a fight over the right to possession of the solicitor’s file.  Acting Justice Debelle’s reasons in PM Sulcs & Associates Pty Ltd v Oliveri [2009] NSWSC 456 exceed 33,333 words.  Ultimately, his Honour found there was no costs agreements, with the result that legal costs, though still payable, were payable only on a quantum meruit basis at common law.  Though what those fees amounted to on a quantum meruit basis was unascertained, no bills having been given on that basis, it was still enough to support the solicitor’s assertion of a lien for unpaid costs as justification for refusing to deliver up the file.  I have not read the decision, but though an argument that there was a retrospecive costs agreement failed, it seems to have failed on the facts rather than on any legal difficulty with the concept of a retrospective costs agreement.

Who You Gonna Call? Lien Busters

Supreme Court judges are solicitors’ lien busters. They can bust solicitors’ liens using:

1.  (Regardless of whether or not the matter to which the file relates had anything to do with the Supreme Court) their Court’s inherent jurisdiction over its officers including Victorian solicitors, reinforced by s. 76 of the Supreme Court Act, 1986; and

2.  (In relation to Supreme Court proceedings) order 37 rule 1(1) of the Supreme Court Rules.

In Nicholson v Knaggs (No 2) [2009] VSC 187, Justice Vickery adjudicated a dispute over possession of the defendants’ file maintained by their former lawyers. Continue reading “Who You Gonna Call? Lien Busters”

The lien and the solicitor who finds himself practising certificateless

Update: More solicitors’ lien cases: Magnamain Investments Pty Ltd v Baker Johnson Lawyers [2008] QSC 245, and Stark v Dennett [2007] QSC 171, a case about who should be taken to have terminated the retainer and which sets out the law thoroughly.

Original post: As I have already noted in these pages, Issac B was given a holiday by VCAT, and told not to apply for a work ticket until next year.  Since then, things have got considerably worse for the iconoclast, but more about that in a little while. Cosgriff v Issac B & Co [2008] VSC 515 reveals that Issac B & Co’s practice was ‘transferred to a multi-disciplinary practice in which Malcolm Buxton is the principal legal practitioner.’  Naturally, you can’t sell your clients. If they don’t want any truck with the new owner of the business, it’s tough titties for the new guy.  So it was here: Issac’s former client went off and retained Slater & Gordon.

The question decided by Justice Byrne was whether the solicitor could maintain a lien in circumstances where his retainer had come to an end by virtue of his inability to practise. (As an aside, it is interesting that this is yet another decision of a case about a matter directly governed by the solicitors’ conduct rules, where the Court does not even mention them, as is also often the case in applications to enjoin solicitors from acting in the face of a conflict of duties.) The decision was that Issac B could not assert the lien, because he was taken to have terminated the retainer: Continue reading “The lien and the solicitor who finds himself practising certificateless”

Breakdown in the solicitor-client relationship: ‘good cause’ for sacking the client?

Update, 14 February 2009: A judge of the Supreme Court of South Australia said this in Everingham v Mullins [2000] SASC 448:

’12 The appellants maintain that Stanleys undertook an entire job and were not entitled to be paid when they were reluctant to continue the third set of proceedings. The Magistrate found: (par 28)

“There had been a complete breakdown in the solicitor/client relationship. Mr Bourne said that he could not get a simple task done by a junior solicitor without criticism from the Everinghams, and by then he felt that he was in a conflict situation because he had no enthusiasm to act in the third judicial review and therefore he was not any longer prepared to act. By offering the Everinghams the option of going to another solicitor he felt that the conflict would resolve. I should point out that the third judicial review was in turn discontinued, apparently on the advice of Caldicott and Co.”

13 The instructions came to an end by mutual consent. Mrs Everingham refused even to speak to a junior solicitor who was sent to a routine listing conference by Stanleys. In my opinion, the Everinghams were not entitled to avoid paying their solicitors by reason of the circumstances in which the relationship came to an end.’

Update, 13 July 2008: A commenter, ‘purplehazel’, has provided such a learned response that I repeat it below.  Let’s keep working on this problem people, and see what the readers of this blog can come up with:

I think asking for “authority for the proposition that a solicitor may terminate a client retainer where the relationship of solicitor and client has irretrievably broken down?” is too broad a question. You have to consider the reasons for the breakdown.

The solicitor can’t get rid of the client on a whim, but case law and practice rules would support it the following contexts; refusal to comply with discovery, committing or telling the solicitor of plans to commit perjury, potential ‘abuse of process’ scenarios that you can’t talk the client out of and situations where the client wants you to break the law.

As for case law that simply refers to the ‘breakdown of the relationship’ all I’ve been able to come across so far is this:

Para [105] of Ahmed v Russell Kennedy (a firm) [2000] VSC 41 (23 February 2000)

“[105] I do not see why the learned magistrate should not have concluded that each of the appellant’s refusal (or failure, in the circumstances) to pay any outstanding disbursements, and the breakdown in the solicitor/client relationship – in the context of what his Worship might have concluded was the appellant’s knowing misstatement of the terms of the retainer – gave good cause for the solicitors to terminate the retainer.”

But…reference to the ‘breakdown in the solicitor/client relationship’ does seem to be a consequence of the fee dispute and not a separate ground. It did however cause me to have a closer look at Underwood Son & Piper v Lewis [1894] 2 QB 306 [a decision of the English CoA] which Halsbury’s laws of Australia has as the leading case.

Underwood is authority for the idea that the retainer is an entire contract and can only be terminated by the solicitor on “good cause and reasonable notice”. It includes analogies about cigars and shoes from Re Hall & Barker ((1878) 9 Ch D 538 at 545):

‘If a man engages to carry a box of cigars from London to Birmingham, it is an entire contract, and he cannot throw the cigars out of the carriage half-way there, and ask for half the money; or if a shoemaker agrees to make a pair of shoes, he cannot offer you one shoe and ask you to pay one half the price.’

However, Underwood doesn’t just refer to a client’s failure to put the solicitor in funds to meet disbursements; to insistence by the client that the solicitor take some dishonourable step; and to circumstances where the client hinders /prevents the solicitor’s actions [the 3 instances related in Halsbury’s laws of Australia at [250-465] footnote 9] it also includes this obiter comment from AL Smith LJ:

“and many cases situations may be supposed in which the solicitor may be entitled to refuse to act for the client any further.”

Interesting that the cases citing Underwood seem less about what the solicitor may or may not do, and more about whether they can’t stop acting and still expect to be paid for what they’ve done so far (or to keep payments already received).

Relevant questions on the facts – is there one contract with the client or a series of separate ones? to what extent can a written costs agreement or other agreement that sets up the retainer simply take the relationship between the parties out of the realm of the ‘entire contract’ altogether?

There’s another passing reference (which doesn’t really help much) in R v Promizio [2004] NSWCCA 75 (31 March 2004) at [33].

Conflicts between self interest [the risk of disciplinary or other sanctions] and the duty to the client would arise in the examples I suggest in the second paragraph of this comment – but they are probably best seen as part of the duty to uphold the law/duty to the court.’

Original post: One of the solicitors I have done some work for has several times told me that she ‘sacked the client’. Though clients can terminate the solicitor-client relationship without notice and for whatever reason they like, there are limits on solicitors’ entitlement to do so; even non-payment of fees only entitles you to cease acting pending payment, at least until the situation becomes chronic. I am going through a phase of looking unsuccessfully for authority for propositions I thought I know to be correct, and not finding them. Hence this call to readers: can you point me to authority for the proposition that a solicitor may terminate a client retainer where the relationship of solicitor and client has irretrievably broken down? Or authority for the proposition that in that situation, a solicitor ought not to continue acting because to do so would involve a conflict between self-interest and duty to the client? Here’s a recent case from the Utah Supreme Court which discusses the US authorities on this issue, where breakdown of the relationship is obviously good cause for a solicitor terminating a retainer. What about in Anglo-Australian law? Anybody?

Ownership of documents on a solicitor’s file

Update, 21 December 2017:  An English costs judge has made a decision about whether clients can demand, as of right, further copies of lawyers’ documents already received by the client (e.g. file copies of letters from lawyer to client).  He said no, not even if they want them to work out whether to seek taxation of costs.  The decision does not say, of course, that the Court would not order production in any case, but rather simply says that clients have no entitlement to them, even if they offer to pay for the copies.  The case is Green v SGI Legal LLP [2017] EWHC B27 (Costs).  A note about it is here.

Original post: This post is like a case book(let) rather than a text. It sets out the raw materials which bear upon the question of who as between solicitor and client owns (in the sense of is entitled to the original of) what documents typically found in a solicitor’s file. It is very long, and largely unsummarised: a resource to go back to rather than something to trawl through now. It is the product of reading Wentworth v De Montfort (1988) 15 NSWLR 348 (the subject of this separate companion post), the leading case on the question in NSW, and the cases which have considered it since. One day, hopefully, I will do a shorter post summarising the principles.

The state of the law is a scandal. For a start, it is ridiculously uncertain. To the extent it is certain, it is ridiculously difficult to interpret. These deficiencies give rise to abuse. An appropriate law would be that every client ought to be entitled to inspect the whole of a solicitor’s file, and ought to be able to have the whole of the original. Even smart institutional clients do not stipulate for this when negotiating retainers. Presently, the law (or an interpretation of it which is universally tolerated in Victoria) allows solicitors to take bits out of the file and give the client only what remains, so as to leave them with an incomplete whole, a thing without internal integrity, nothing but one part of the jigsaw of the past, an aid rather than a map for the reconstruction of past events. It is little known that the lien will trump an obligation in the solicitor to discover the file to the client (though the solicitor must discover the file to others). In fact, the solicitor is obliged to give discovery but not to allow inspection: Hammerstone Pty Ltd v Lewis [1994] 2 Qd R 267, a case I have caused to be put into play successfully twice, once in the Magistrates’ Court and once in VCAT’s Legal Practice List.

Solicitors’ Professional Conduct and Practice Rules, 2005 (‘7. Ownership of Clients’ Documents – Termination of Engagement’) provides Continue reading “Ownership of documents on a solicitor’s file”

Wentworth v De Montfort: a case on ownership of documents in solicitors’ files

This post is a companion to this longer companion post which discusses the other cases on the question of who, as between solicitor and client, is entitled to documents relating to their matter found on solicitors’ files and in their accounts. As the decision with the most detailed consideration of the question, it gets its own post.

Twelve classes of documents on a solicitor’s file were in issue in Wentworth v De Montfort (1988) 15 NSWLR 348, a decision of the NSW Court of Appeal. The key issue in the case was described in this way:

‘Ms Wentworth’s primary submission is that any documents brought into existence or received by Sly & Russell in relation to her litigation were documents created or received by Sly & Russell in their capacity as agents for their principal Ms Wentworth, and that, applying ordinary agency principles, any documents so created or received are accordingly hers. As I understand their case, the opponents do not deny that any document created or received by them only as agents for Ms Wentworth would belong to her. However they deny that any documents falling within the twelve categories were so created or received and submit that upon a number of principles applying to solicitors and other professional people, the documents falling within those categories are theirs.’ Continue reading “Wentworth v De Montfort: a case on ownership of documents in solicitors’ files”

Tidy little fruits of litigation lien judgment

In Khoury v Gonvales [2006] NSWSC 1290, Mr Khoury, a solicitor, got from Justice Barrett of the NSW Supreme Court a declaration that he was entitled to a fruits of litigation lien. He had acted for Mr Sef Gonzales in a suit against the executrix of the will of Teddy Gonzales, and won. Sef got an order for costs too, and the Court ordered the executrix to pay the costs out of the estate. There was a taxation and that resulted in a judgment against the executrix in favour of the client for the sum of $107,032 in costs. The solicitor wrote to the executrix and asked for the money, but she said she needed the consent of the judgment creditor — Sef Gonzales — before she would pay it to anyone other than him, and that consent was not forthcoming. So the solicitor did the sensible thing and applied to the Supreme Court for a declaration that he was entitled to an equitable lien over the estate to the extent of the judgment debt since it was only through his exertions on behalf of Sef Gonzales that Sef had got the judgment at all. The Court obliged, and provided some neat summaries of the relevant law along the way. Continue reading “Tidy little fruits of litigation lien judgment”