A Costs Assessor in NSW recently reported a Law practice to the NSW Legal Services Commission for charging at a rate that was grossly excessive pursuant
to S.322 Legal Profession Act 2004.
The problem was the Law Practice was doing the matter on a pro bono basis and did not charge any fees at all. The costs assessor didn’t bother to find
out all the facts, instead chose to “shoot first and ask questions later.”
The brief facts of the case were as follows:
- (a)The client attended a physiotherapist. The physio applied an electric heat pack to the back of the client (Plaintiff).
- (b)The Plaintiff suffered third degree burns. She required emergency surgery at Concord Hospital Burns unit, which included a skin graft.
- (c)The client instructed the law practice to sue the physio.
- (d)The law practice instructed Counsel, obtained expert evidence on liability and on the injury itself which included plastic surgeon reports.
- (e)Proceedings were commenced and after some investigation the physio was located.
- (f)The physio was uninsured and had no assets.
- (g)When it became clear that a judgement against the physio was useless, the Law Practice decided to negotiate with the physio and run the case
- (h)The physio, feeling responsible, paid a modest sum. The Plaintiff received some money, the Experts, Doctors, Court, Counsel and interpreters
were paid something but the law practice received no fees and charged zero in Costs.
- (i)The assessor was called upon to assess a small party/party bill of about $8,000.
- (j)The assessor decided, without any investigation or complaint by the client and without seeking submissions by the law practice, to report the
law practice for charging at a rate which was grossly excessive.
These circumstances, whilst bizarre, create an interesting insight into the mind of the modern-day costs assessor that a situation can exist where
charging zero costs is overcharging.
If the costs assessor is considered by the LSC to have acted properly then the only lesson which can realistically learned from this laughable set
of circumstances is to avoid costs assessors and negotiate costs disputes.
This provides a perfect example why Costs Cover is a vital risk prevention strategy in your law practice. If you have purchased Costs Cover, the panel
lawyers will professionally and objectively conduct negotiations on your behalf in the event of a costs dispute with your former client.
The panel lawyers allocated will attempt to negotiate and if necessary attend mediation as a precursor to the costs assessment process, thereby maximising
the chance to settle the matter before being exposed to a potentially client-bias costs assessor.
If a costs assessor is prepared to report a solicitor to the LSC for charged nothing, I shudder to think what will happen if a firm actually charges
for providing their services.
By Charlie Galayini – GSA Business Development Manager