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Don’t rely on a Costs Dispute being “out of time”!

Charles Galayini | Tuesday, January 30, 2018
Don’t rely on a Costs Dispute being “out of time”!

In December 2017 yet another decision made by the Supreme Court fuelled the topic of whether a bill of costs issued by a solicitor can be assessed out of time.

In the matter of Bruce v Magee trading as Armstrong Legal NSWSC 1987 (6th December 2017), the substantive issue was heard on 6th April 2017. Before the Defendant solicitor was required the give evidence the matter was settled by the solicitor capitulating.

The question of costs was heard on 6th December 2017 where her honour McCallum J ordered that the Defendant solicitor was required to pay two-thirds of the client Plaintiff’s costs. What is concerning for all solicitors is McCallum’s reasoning. McCallum indicated that additional costs could have been prevented if the solicitor had consented to the assessment of the bills from the outset. Essentially, this is saying that solicitors should disregard the time period for assessment and just get on with having the costs assessed. Easy to say when it’s not your income that is being challenged. It brings to question why there is a time period for costs at all.

Unfortunately for this solicitor it is another expensive lesson learned for the industry. Not only did the solicitor incur the cost of the defence and the cost of counsel, but he will now incur the cost of the solicitor/client assessment process and more than likely be required to refund his former client some of her fees. The judgement gave no indication as to the amount of fees the original Bill of Costs charged, however the subsequent legal process would have significantly reduced whatever profit may have been made, not to mention take substantial time away from managing other income generating clients.

This is yet another example of how Costs Cover can be beneficial to a law practice. Had the Defendant/solicitor Magee, been insured by Costs Cover, his legal and assessment costs and any costs to be reimbursed could have been insured up to a maximum of $500,000.

To understand the benefits of the retroactive option in your Costs Cover policy, please give Charles at Costs Cover a call.

Costs Cover