ByLawyers News and Updates

Costs – All states

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By Lawyers 101 Costs Answers reference manual has been extensively reviewed and enhanced.

This comprehensive reference manual is available in the Reference materials folder on all By Lawyers matters plans. The 101 Costs Answers guide is also as part of the By Lawyers Practice Management publication.

Commentary enhancement

An important new section of commentary has been included dealing with disclosure before settlement in litigation matters. Barrister Philippe Doyle Gray, who we are delighted to welcome to the ranks of our authors, covers in detail the requirement under the Legal Profession Uniform Law for clients to receive advice about the cost implications of settlement. Philippe has also made his helpful Settlement Computer available via a link in the By Lawyers commentaries. This automated spreadsheet assists practitioners with the sometimes complicated calculations required to properly give disclosure before settlement, taking into account the various possibilities for the resolution of a matter.

The new section of commentary has been added to the By Lawyers litigation and injuries guides in those states where the Legal Profession Uniform Law applies, namely New South Wales, Victoria and Western Australia.

New precedents

Two new precedent letters to the client have been added to provide clients with the necessary disclosure before settlement:

  • Letter to client – Costs disclosure before settlement – NSW, VIC and WA;
  • Letter to client – Costs disclosure before settlement – QLD, SA, TAS, ACT and NT.

There is one precedent letter for Legal Profession Uniform Law states and one for the other jurisdictions where costs disclosure before settlement is not mandatory but is nonetheless best practice.

These new letters are available in the If required – Updating costs disclosure and security for costs folder on all By Lawyers matter plans. They are also available on the relevant litigation and injuries matter plans under Going to court.

Costs agreements

By Lawyers extensive suite of costs agreements that comply with the regulatory requirements in each state are currently under review. Keep an eye out for a future News & Updates post when the revised versions are published.

Costs disclosure – QLD

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Abbreviated costs disclosure is available to Queensland law firms from 1 March 2024.

A new section 307B of the Legal Profession Act 2007 (QLD) provides for a simpler form of disclosure where legal costs in a matter, excluding GST and disbursements, are not likely to exceed the detailed disclosure threshold set out in s 300, which is currently $3,000.

This new form of disclosure is available as an alternative to the detailed disclosure requirements under s 308 of the Act.

Under s 307B, a law practice is required to disclose to the client:

  • in general terms, the legal services that will be provided to the client;
  • the basis on which legal costs will be calculated, including whether a scale of costs applies;
  • an estimate of the total amount of the legal costs;
  • an estimate of the total amount of disbursements; and
  • the client’s right to:
    • negotiate a costs agreement with the law practice;
    • receive a bill from the law practice;
    • request an itemised bill after receiving a lump sum bill; and
    • be notified of any substantial change to the matters disclosed under s 307B.

All By Lawyers Queensland and Federal publications have been updated with a compliant abbreviated costs disclosure precedent.

By Lawyers 101 Costs Answers guide has been updated to include commentary on the new abbreviated costs disclosure requirements.

CTP claims costs – NSW

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Reporting of CTP claims costs by legal practitioners in NSW is now lodged via an online portal.

The State Insurance Regulatory Authority (SIRA) has launched a new Claims Costs Disclosure (CCD) portal to capture settlement costs data relating to Compulsory Third Party (CTP) damages claims made under the Motor Accident Injuries Act 2017 (MAIA).

Legal practitioners representing a CTP claimant must provide SIRA with a breakdown of costs related to the settlement of the claim, including:

  • the total amount for which the claim was resolved;
  • all deductions, including all legal costs and disbursements;
  • the total amount paid to the claimant.

CTP claims costs for damages claims settled on or after 1 March 2023 need to be lodged via the new portal. Retrospective disclosure prior to 1 March 2023 is not required. Registration for the portal has been available since 8 February 2023.

The By Lawyers Motor Vehicle Accident – From 1 December 2017 (NSW) guide has been updated accordingly.

Uniform Legal Profession Law – WA

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By Lawyers are preparing for the Legal Profession Uniform Law in Western Australia

Legal Profession Uniform Law (LPUL) is due to commence in Western Australia on 1 July 2022.

By Lawyers guides and precedents will be updated in due course.

Overview

The WA provisions are contained in the Legal Profession Uniform Law Application Bill 2021 (WA) which will replace the Legal Profession Act 2008 and the Law Society Public Purposes Trust Act 1985 on commencement.

Simplified and standardised regulations for WA legal practitioners will align with those in New South Wales and Victoria. The Uniform Law is governed by the Legal Services Council and the office of the Commissioner for Uniform Legal Services Regulation. Each participating jurisdiction has a representative on the council which sets the rules and policy underpinning the Uniform Law. The Commissioner oversees dispute resolution and compliance functions.

The WA Legal Services and Complaints Committee and the Legal Practice Board will continue to carry out complaint and investigation functions, the granting of practising certificates, and professional development.

Costs disclosure and billing under the LPUL

While the Uniform Law makes sweeping changes, those which impact day-to-day practice the most relate to costs disclosure and billing.

Costs disclosure

Written costs disclosure must be given when instructions are taken or as soon as reasonably practical after. It must include the basis on which costs will be calculated and an estimate of the total costs. It must be updated if there is any significant change.

The client must be informed of their rights to negotiate a costs agreement, receive a bill, request an itemised bill, negotiate the billing method and the availability of costs determination.

If a law practice fails to meet its disclosure obligations, then any cost agreement with the client is void and the client is not required to pay the legal costs. The firm cannot commence or maintain any proceedings for recovery of legal costs until they have been assessed, or the dispute is determined by the Legal Practice Board. A contravention can also result in disciplinary action.

Firms must take all reasonable steps to ensure the client has understood and given consent to the proposed conduct of the matter and the proposed costs.

Disclosure obligations vary depending on the estimated costs in a matter. Disclosure is not required if costs are not expected to exceed $750 excluding GST and disbursements. Where costs are not expected to exceed $3000 excluding GST and disbursements, the prescribed uniform standard disclosure form can be used.

Billing under the LPUL

A bill may be lump sum or itemised. A client who receives a lump sum bill may request an itemised bill. The request must be made within 30 days after the date on which the legal costs became payable and must be complied with within 21 days after receiving the request.

If the costs in an itemised bill are higher than the a lump sum bill, the additional costs will only be recoverable where the client was told that the costs in any itemised bill may be higher – and the additional costs are determined to be payable after a costs assessment or binding determination.

Each bill or a covering letter accompanying each bill must be signed by a principal of the firm, or nominate a principal as responsible for the bill.

A law practice must not charge for the preparation or delivery of a bill.

Each bill must include or be accompanied by a written statement setting out the options available to the client in the event of a dispute about the costs and any time limits which may apply.

Interest can be charged on costs unpaid 30 days or more after a complying bill has been given. Interest can only be charged where the bill contains a statement that interest will be payable and the rate chargeable. The maximum rate is prescribed; currently it is 2% above the cash rate target specified by the Reserve Bank of Australia at the time the bill was given.

The billing provisions of the Uniform Law do not apply if the client is a commercial or government authority

Cost assessment procedure

The Uniform Law does not change the procedure for party / party cost assessments in Western Australia. The procedure and form for an assessment of costs is set out at rule 4.7 of the Consolidated Practice Directions of the Supreme Court.

By Lawyers guides:

All WA specific By Lawyers guides will be amended to cover the Legal Profession Uniform Law. So too will the relevant WA commentary and precedents in Federal guides and reference materials.

The main changes will include:

  • New LPUL compliant costs agreements and short form costs disclosure for all WA guides, Federal guides including Family Law, Employment Law, Companies, Trusts, Joint Ventures and Superannuation.
  • Updates to the 101 Costs Answers reference manual, which will also include the LPUL compliant costs agreements.
  • Updates to the ‘Example invoice incorporating notification of client’s rights’ and the stand-alone ‘Notification of client’s rights’ precedents available on all WA and Federal matter plans.
  • Updates to the commentary on professional executor regulations in the Probate and Letters of Administration guides.
  • Updates to the costs section in the Wills commentary including the ‘Conflicts concerning practitioner’s own interests’ section and the ‘Solicitors as executors’ section.
  • Updates to the WA trust accounting section in the By Lawyers Practice Management guide.
  • Updates to 101 Costs Answers.
  • Updates to the ‘Solicitor mortgages’ section in the Mortgages commentary.

Costs disclosure – Increase of legal rates during a matter

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Increase of legal rates during a matter

All By Lawyers Costs Agreements and Client Service Agreements have been updated to include a clause notifying a client that legal rates may increase during the course of a matter requiring a revision of the costs estimate provided. This clause provides for 30 days written notice of any proposed changes to legal rates. While such a clause is not required by Legal Profession legislation concerning costs disclosure requirements, providing such notice on initial costs disclosure is considered best practice.

All of our Guides contain Costs Agreements (Client Service Agreements for QLD Guides) within the folder ‘A. Getting the mater underway’. All of our agreements are compliant with the relevant Legal Profession legislation and are reviewed and updated regularly to ensure compliance.

Wills and powers of attorney – Costing & Storage

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Costing wills and powers can be difficult. It is often not clear at the outset the extent of work which will be required. While many wills are ‘simple’, the complexity of a client’s financial position or their family arrangements can mean hours of time spent taking and confirming instructions and sometimes reviewing documents such as their self managed superannuation fund deed, or a family trust deed. The intended uses for a power of attorney are many and varied and may involve detailed advice. Any issues of capacity may also add significant time and expense.

Is a flat fee for a ‘simple’ will or a ‘standard’ power appropriate, or should an hourly rate apply?

Are there any scale costs that can be used as a guide? What costs disclosures must be made to the client?

What arrangements should be made for the storage of original wills?

How should copies of documents be managed?

These practical questions are dealt with in new sections of commentary on Costs and Storage in our NSW, Vic, Qld, SA, ACT, Tas and WA wills and powers publications.

All of these publications include the By Lawyers wills and powers Costs Agreements and example invoices, which meet costs disclosure requirements and include disbursements, billing and payment arrangements, client rights notice and solicitor’s lien provisions, among others.

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