Recently, the County Court’s Practice Court accepted that where a client admitted having received a bill given by email, service in accordance with the Legal Practice Act, 1996 had been effected, so that various deadlines which are counted from that date then commenced to run. That is so even though the commencement of the running of time was predicated on a bill having been ‘given in accordance with’ a service regime which was very specific and did not include service by email. This post considers the law in that regard, the only authority on the point being consistent with the Practice Court’s decision. It also notes the deemed service provisions in the 1996 and 2004 Acts, and their interpretation. Continue reading “Informal service of lawyers’ bills”
From when can solicitors claim interest on an unpaid bill?
Under s. 95 the Legal Practice Act, 1996, interest was chargeable on bills of costs from the period from 30 days after payment is demanded until the bill is paid. But what does it mean? Does interest start to run 3o days after (i) the date of the bill, (ii) the day it was posted, (iii) the day it was received, (iv) the day at the end of the period which the costs agreement says payment is to be made within, or (v) the due date for payment stated on the bill? In this post, I hazard an answer, and note the different provision now to be found in the Legal Profession Act, 2004, following its amendment which I posted about here. Continue reading “From when can solicitors claim interest on an unpaid bill?”
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.
Distinguishing between civil and disciplinary complaints
In the latest Byrne v Marles ([2009] VSC 210), Justice Beach seems to have found that any particular allegation made by a complainant may properly be characterised as both a civil and a disciplinary complaint. If the Legal Services Commissioner receives a complaint, she must investigate it to the extent it is a disciplinary complaint and must try to settle it to the extent it is a civil complaint. There is no particular difficulty where two allegations are found in one complaint document, and one is characterised as a civil complaint and another is characterised as a disciplinary complaint. In my experience, that is what the Commissioner always does: she chooses between the two alternatives in relation to any one allegation as if they are mutually exclusive.
Since ‘any genuine dispute’ between the complainant and the lawyer complained about is a civil complaint, however, one might think that all disciplinary complaints in which the complainant has a dispute with the lawyer complained about will amount to both a civil and a disciplinary complaint. And since an allegation will be a disciplinary complaint if it is of conduct which ‘falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent’ lawyer, there will be many civil complaints which will also be disciplinary complaints.
In such a circumstance, unless the Commissioner summarily dismisses the whole complaint under s. 4.2.10, she must try to settle it (insofar as it is a civil complaint), and (insofar as it is a disciplinary complaint) she must investigate it.
If Justice Beach’s logic is applied, profound challenges await the Commissioner. They are inherent in the Act’s injunction in relation to one dispute to investigate it in the public interest with a view to prosecuting and penalising the lawyer, while at the same time trying to resolve the dispute between the complainant and the lawyer. Most obviously, what is the Commissioner to do about s. 4.3.5(4)? It says:
‘Evidence of anything said or done in the course of attempting to resolve a civil dispute is not admissible in proceedings before [VCAT] or any other proceedings relating to the subject-matter of the dispute.’
Are there to be two sets of responses, in one of which (in the civil complaint) the lawyer makes socially appropriate concessions, apologises, and agrees to pay money in return for confidentiality, and in the other of which (the disciplinary complaint), the lawyer takes all appropriate technical points and, while being fully frank and open as required by the Act, concedes nothing? And imagine the disquiet the lawyer’s insurer will have knowing that the Commissioner will be able to compel the provision of answers from a practitioner, as if interrogating him, in the disciplinary complaint which will run parallel with the professional negligence claim constituting the civil complaint. Continue reading “Distinguishing between civil and disciplinary complaints”
Termination of a no-win no-fee retainer
Mr Burmingham is the subject of three posts already. They dealt with three discrete aspects of his case, Maurice B Pty Ltd v Burmingham [2009] VSC 20: a titillating detail, advocates’ immunity, and the nature of the suit for fees. But his case was really mostly about what happens when a no-win no-fee costs agreement is terminated before the end of the case. Of course, it all depends on what the costs agreement says, and this costs agreement was presumably the result of many years’ honing by one of Australia’s foremost plaintiff firms. Justice Byrne was not complimentary of the draftsmen (nor of the court book’s reverse chronological order, a bugbear of my own). But in the end, the lawyers got their fees even though they did not obtain a successful result for Mr Burmingham. Continue reading “Termination of a no-win no-fee retainer”
The suit for fees
One might imagine the suit for fees to be the simplest legal claim there is. But there seems to be great confusion about what the elements of the claim are, what defences are available, and the relationship of the suit with a taxation, or the failure to exercise a right of taxation. If anyone has any contributions to the mysteries referred to below, I would be happy to hear them. Continue reading “The suit for fees”
The disgruntled beneficiary and the executor’s lawyer
Imagine this. A beneficiary thinks a trustee is diminshing the trust estate by spending too much on lawyers. They have no standing to seek a taxation of the trustee’s solicitor’s bill, and the trustee’s solicitor’s file is unavailable to them by virtue of legal professional privilege enjoyed by the trustee. The beneficiary has no contractual or equitable relationship with the solicitor. You might think they’re rooted. But you would be wrong, for the beneficiary may apply to VCAT’s Legal Practice List for an order that the solicitor pay to the disgruntled beneficiary that beneficiary’s share of so much of the fees properly and reasonably charged by the solicitor on instructions as represents the difference between what a reasonable trustee would have spent and what the trustee, perhaps over-anxious by disposition, in fact spent. So says VCAT’s Legal Practice List’s decision in Sinni v DO [2009] VCAT 135. I should disclose that I appeared in a directions hearing in this matter. Continue reading “The disgruntled beneficiary and the executor’s lawyer”
Beak bribe boast bars barro
Legal Services Commissioner v JDG [2008] LPT 17 is a shocking case in which a Queensland barrister was struck off after he lied when confronted by investigators with the true proposition that he had offered to pay a $50,000 bribe to a Magistrate or Crown prosecutor on behalf of a client. He also took $59,000 in cash from the direct access client and popped it into his safe. He used some of it to feed his gambling. He should, of course, have chucked it into a special account. He told his client that: Continue reading “Beak bribe boast bars barro”
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”
Applications to set aside costs agreements
This post has been sitting around as a draft waiting to be finished. There is little chance of that for a long time. So here is my incomplete annotation to s. 103 of the Legal Practice Act, 1996. That is the provision which gives VCAT (formerly the Legal Profession Tribunal) jurisdiction to set aside costs agreements on a statutory basis peculiar to that species of contracts. All costs agreements in all matters in which first instructions were taken prior to 12 December 2005, regardless of when the costs agreements were entered into, may be argued to be governed by the old Act. So there is some life left in the old s. 103 yet. Continue reading “Applications to set aside costs agreements”
Nicholson v B&S — the first important Victorian decision about setting aside costs agreements
Nicholson v B&S [2000] VLPT 28 was the first decision to deal in detail with the principles which govern the extremely wide discretions granted by s. 103 of the old Legal Practice Act, 1996. Registrar Howell cancelled a costs agreement, and ordered that one of the bills the client challenged — the only one she had really jumped up and down about — be taxed by the Taxing Master of the Supreme Court. Mr Howell did so in the following circumstances: Continue reading “Nicholson v B&S — the first important Victorian decision about setting aside costs agreements”
Lawyers and the criminal law
Reproduced below is a blog post about ‘bill padding’ from the US site, Legal Blog Watch. That is where lawyers say work took them longer than it really did, and so charge commensurately more, or even make up the fact that they did work, and charge for it. Sometimes I read articles like this and wonder whether lawyers don’t think they live in a different world where, if they commit crimes, what will happen to them is that they will be dealt with by professional discipline. They think that, or course, because it’s more or less true, unless you get caught stealing from your trust account. But the criminality of time sheet crime should not be allowed to be buried under anodyne euphemisms. ‘Bill padding’ sounds kind of cute, a necessary evil. It is a kind of newspeak. Time to do away with it. Let’s call it ‘rapacity fraud’. It is tolerated by the profession in this sense. There are generalised allegations of widespread bill padding. Talk privately to costs consultants and they will tell you all about it. But I have never heard of a firm which has even basic anti-fraud procedures to detect the practice.
My point kind of makes itself when the author says ‘allegations of bill padding … drew … strong criticism about the practice from legal ethics experts’. Experts say fraud is bad? Well shit Sherlock! The 9th commandment does kind of feature relatively prominently in most systems of law. We’re going to have the case one day when someone actually subpoenas a firm’s electronic billing system and its metadata, and diaries, analyses when the billing entries were made, and cross-examines lawyers on how they could have billed 180 units in a day and still made it to the client function at 6 p.m., or why, having billed relatively consistently every day, they would suddenly remember on the 30th of the month some comparatively vaguely described units they had forgotten to record mid-month, or why given that they had used a precedent for similar documents three times previously in the same month, they decided to draft the document from scratch, only to end up with — you guessed it — the same document as the precedent. Now, that article: Continue reading “Lawyers and the criminal law”
Is interest a form of relief VCAT can grant?
In a long-wnded way, I tentatively suggest that, so long as the applicant has the sense to invoke s. 108 of the Fair Trading Act, 1999, then penalty interest is available under the Supreme Court Act, 1986, just like in the Supreme Court, so long as the dispute is a consumer-trader dispute. That is, a dispute between a purchaser or potential purchaser and a supplier or potential supplier of goods and services, broadly defined. There are some causes of action which come with specific interest provisions too, like the one attached to costs disputes under the Legal Profession Act, 2004.
Continue reading “Is interest a form of relief VCAT can grant?”
Solicitor litigants’ entitlement to costs
Solicitors who are parties to litigation and don’t hire other solicitors to represent them are the only people who are generally entitled to claim legal costs from the losing party even though they don’t have to pay lawyers anything. Engaging in litigation involving themselves is therefore a profitable activity if they win. The principle dates back to London Scottish Benefit Society v Chorley (1884) 13 QBD 872. The Supreme Courts of the land are grumbling about the anamlous nature of the exception, but reluctantly applying it. The most recent case is Freehills, in the matter of New Tel Limited (in liq) (No 4) [2008] FCA 1085.
The leading Australian case is Guss v Veenhuizen (No 2) (1976) 136 CLR 47. The most recent High Court authority to touch on the question is Cachia v Hanes (1994) 179 CLR 403, though that was a case about a claim for costs of a self-represented consulting engineer who was successful in litigation, and the Court there doubted, in dicta, the cogency of the Guss Case‘s reasoning. A judge of the The Full Court of the Supreme Court of Western Australia refused to apply the exception in Dobree v Hoffman (1996) 18 WAR 36, but in the Freehills Case, McKerracher J of the Federal Court sitting in Perth decided to refer it directly to the Full Court of the Federal Court, without formally determining the case, commenting only that he would consider himself bound by Guss’s Case. Other cases to apply the exception include: Continue reading “Solicitor litigants’ entitlement to costs”
The costs disclosure provisions in statutes regulating the profession are not codes
In Nicholson v B&S [2000] VLPT 28, the Legal Profession Tribunal’s Registrar Howell considered whether the costs disclosure provisions of the Legal Practice Act, 1996 constituted a code which demonstrated an intention of the parliament to displace the common law. ‘Nope’, he said:
‘I have considered whether the provisions of Division 1 of Part 4 of the Legal Practice Act 1996 created a code for the provision of information to clients and thus relieved legal practitioners from their previous obligations to provide information. I have concluded that Division 1 is not a code because there is nothing in Division 1 which indicates to me that the legislature intended to change the position at common law or to relieve practitioners of their fiduciary obligations.’
Message to Hullsey: That’s not a big fee…
In VCAT’s Legal Practice List the other day, defending a firm alleged to have charged too much at the rate of $230 an hour, I made the point in cross-examination that London tax silks were wont to charge £600 per hour. As I uttered the words, I was visited by self-doubt. The amount sounded wrong, too much. But hell was I out of date! They don’t charge £600 an hour anymore: they just charge £20,000 ($41,000) an advice. In fact top London firm partners charge between £600 and £1400 an hour. Or so The Times says in a feature entitled ‘Are Top Lawyers Worth Their Huge Fees?’ And the AFR reports today that each of Freshfields, Linklaters, Allen & Overy and Clifford Chance topped the £1 billion mark in turnover, more than half of it from outside London, including China and the Middle East. Victoria’s Attorney General, worried about my confrères’ wont* to charge $14,000 a day has just gotta take a chill pill. This is the most interesting bit of The Times’s article: Continue reading “Message to Hullsey: That’s not a big fee…”
Court’s discretion in relation to costs not abrogated by contractual promise to pay indemnity costs
Update, 23 January 2009: See also Reading Entertainment Australia Pty Ltd v Burstone Victoria Pty Ltd (No 2) [2005] VSC 137, Reading Entertainment Australia Pty Ltd v Whitehorse Property Group Pty Ltd [2007] VSCA 309Irani v St. George Bank Limited [2005] VSC 456; Abigroup Ltd v Sandtara Pty Ltd [2002] NSWCA 45.
Original post: National Australia Bank Ltd v Chen-Conway [2008] NSWSC 485 reiterates and approves the following propositions to be found in Micarone v Perpetual Trustees Australia Ltd & Ors (No 2) [1999] SASC 533 per Olsson, Debelle and Wicks JJ (at [32]):
‘The general rule is that, in the absence of an agreement to the contrary, a mortgagee is entitled to costs on a party and party basis: The Kestrel (1866) LR1A&E 78; In re Queen’s Hotel (Cardiff) Ltd; In re, Veronon Tin Plate Company Ltd [1900] 1 Ch 792; Re Adelphi Hotel (Brighton) Ltd District Bank Ltd v Adelphi Hotel (Brighton) Ltd [1953] 1 WLR 955; Re Shanahan; Re A Solicitor’s Bill of Costs (1941) 58 WN (NSW) 132; Jamieson v Gosigil Pty Ltd [1983] 2 Qd R 117; AGC (Advances) Ltd v West; AGC (Advances) Ltd v Cranston (1984) 5 NSWLR 301; Katsaounis v Belehris (1994) 179 LSJS 143 at 155 – 156. The expression of a contrary intention must be “plainly and unambiguously expressed” to use the words of Vaisey J in Re Adelphi Hotel Co Ltd (above) at 961. Generally speaking, a contractual obligation to pay all costs is not construed to require payment of costs improperly or unreasonably incurred, such an obligation being open to objection on public policy grounds: Gomba Holdings (UK) Ltd v Minories Finance Ltd (No 2) [1993] Ch 171 at 187 – 188. That difficulty does not exist in this case since the obligation to pay solicitor and own client costs is subject to conditions as to reasonableness: Citibank Savings Ltd v Pirrotta [1998] ANZ ConvR 442; Elders Trustee and Executor Co Ltd v Eagle Star Nominees Ltd (1986) 4 BPR 9205. To make good any objection upon taxation, the mortgagors should be required to satisfy the taxing officer of the unreasonableness of the item, doubts being resolved in favour of the mortgagee: Katsaounis v Belehris (above) at 157 approved in Citibank Savings Ltd v Pirrotta.’
But it also says:
‘The court will usually give effect to an express contractual obligation but, nevertheless, retains a discretion to award costs on some other basis: ANZ Banking Group (New Zealand) Ltd v Gibson [1981] 2 NZLR 513 at 524 – 525.’
Onus of proof in costs disputes between lawyers and clients
In Nicholson v B&S [2000] VLPT 28, the Legal Profession Tribunal’s Registrar Howell, considered three questions about the burden of proof:
- Where there is a dispute about the amount of legal costs, must the client prove that the costs were too great, or must the lawyer prove that the costs were just right?
- Where there is an application to set aside a costs agreement, must the client prove that there was a costs agreement as a starting point in the case, or must the lawyer?
- If a client alleges, as a reason why a costs agreement should be set aside pursuant to s. 103 of the Legal Practice Act, 1996, that the lawyer engaged in misconduct or unsatisfactory conduct, does she have to prove the allegation according to the Briginshaw standard of proof or is it sufficient to prove it on the balance of probabilites as more ordinarily understood?
The second one is obvious, an issue thrown up only by an out of left field submission by an unrepresented litigant. The answer is that the client must prove the existence of a costs agreement before an order may be made at her application for it to be set aside. The answer to the third is simple: the Briginshaw standard described in Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336 @ 362, which says, in its application to disciplinary proceedings —
The civil burden of proof — on the balance of probabilities — means different things in different cases. If you want to make out a case of serious wrongdoing, like misconduct, you’d better do a good job of convincing the Court.
The first is a little less obvious. Here is Registrar Howell’s take on the issue: Continue reading “Onus of proof in costs disputes between lawyers and clients”
Two costs disclosure default cases in VCAT
In retainers governed by the Legal Profession Act, 2004, failures to disclose matters which the Act requires to be disclosed about future legal costs can have the result that the solicitors may not recover their fees whether by proceedings or otherwise until they have been the subject of a solicitor-client taxation in the Supreme Court, generally at the solicitors’ expense regardless of who ‘wins’ the taxation (i.e. regardless of whether the Supreme Court affirms the solicitors’ bill or substantially discounts it). The draconian provision which says so, s. 3.4.17, and the provision which says one of the things non-disclosure of will trigger s. 3.4.17 is a change to the original estimate (s. 3.4.16) are set out at the end of this post.
In the first case, a file handler changed firms. The new firm did not reiterate the old firm’s estimate of fees and they were told to go off and have a Supreme Court taxation over a bill for $2,500 before coming back and continuing their proceeding. Unless the solicitor is found not to be entitled to any fees, a Supreme Court taxation ends with a Supreme Court order to the client to pay the amount found to be appropriate. The solicitor would presumably go back to the Tribunal only if there were defences which the Taxing Master did not have power to deal with and which VCAT’s Legal Practice List would.
In the second, the failure of a solicitor to update his fee estimate for the first 10 days of a retainer in which the original estimate blew out by over 50%, was found not to have breached s. 3.4.16 because in the context of the retainer over 10 days, it was not reasonably practicable to give the update. The decision must mean that there is no absolute duty on a solicitor to keep track of costs as they are accruing and to advise the client when the original estimate is exceeded. Continue reading “Two costs disclosure default cases in VCAT”
Lawyers’ fees are hot news all of a sudden
Update, 26 June 2008: The managing partner of the controversial NSW personal injury practice referred to below was fined $10,000 by the Administrative Decisions Tribunal’s Legal Services List for advertising in contravention of conduct rules despite a prior warning from the Legal Services Commissioner. One wonders whether any enquiry was entered into about how much business was generated by the advertising. If not, the fine of $10,000 may in fact attract further breaches of the law as a cost effective means of buying your way out of the prohibition on advertising.
The Australian reports that there are calls for national unification of the over-complicated and increasingly divergent costs disclosure regimes around the country.
Original article: Front page article in The Melbourne Times: ‘Case for Change: Putting the Cost of Justice on Trial’. It’s all about a pack of convicted crims who have set up an electronic vehicle for the dissemination of jailhouse savvy, the wonderfully named ‘Crimassist‘. They tend towards the view that legal fees are a bit on the high side. You can bet your bottom dollar that the unqualified practice boffin at the Law Institute is watching keenly despite the anonymous website proprietors’ brilliant anti-conviction technique of plastering the site with explanations that none of it is legal advice. Then there’s a long Sydney Morning Herald article about a prominent Sydney personal injuries practice which is either so seriously on the nose that it’s surprising that their practising certificates haven’t been suspended, or, as they say, victims of a terrible vendetta by embittered former employees who are controlling and manipulating their former clients. If nothing else, it must be said that the firm is very generous: when one of its clients complained of overcharging, it flicked him $100,000 and later said it was just a commercial goodwill gesture, and no admission at all of overcharging. Then Victoria’s Attorney-General has lashed out at barristers’ fees out of the blue, prompting a fairly strong response from the likes of Richter and Burnside QCs. Continue reading “Lawyers’ fees are hot news all of a sudden”