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Legislative Review

Charles Galayini | Tuesday, October 09, 2018
Legislative Review

In this Legislative Review we look at the Cost Provisions in the Legal Profession Act (2004) and the Legal Profession Uniform Law (2015). Where solicitors seek to use the time limits as a defence, judges in the Supreme Court and District Court of NSW and Victoria invariably ignore the time limits and find in favour of the clients. Every matter can be a potential cost dispute regardless of when the matter concluded.

The Legal Profession Act (2004) (LPA) and subsequent Legal Profession Uniform Law (2015) (LPUL) provide clients with legislative time limits when requesting an itemised bill from their lawyer and in thereafter seeking a costs assessment. The legislative framework needs to be considered in conjunction with associated case law which provides Courts with a clear discretion in their interpretation of the relevant law and the Courts invariably exercise that discretion against lawyers.

The Legal Profession Act (2004)

LPA (2004) applies to all bills rendered or matters completed before 1 July 2015. Section 350 LPA (2004) provides for applications by the client or a third-party payer for solicitor client costs assessments. Section 350(4) provides that clients must apply for a costs assessment within 12 months of the bill being given or request for payment is made. There are however a number of provisions which make this 12-month period irrelevant.

Section 350 (5) provides,

“However, an application that is made out of time, otherwise than by:

  1. A sophisticated client; or
  2. A third-party payer who would be a sophisticated client if the third-party payer were a client of the Law Practice concerned;

May be dealt with by the Costs Assessor if the Supreme Court, on application by the Costs Assessor, or the client or third party payer who made the application for assessment determines, after having regard to the delay and the reasons for the delay, that it is justified fair and reasonable for the application for the assessment to be dealt with after the 12 month period”.

Section 728(1) states; “On application of a client of a law practice, the Supreme Court may order the Law Practice;

  1. To give the client a Bill of Costs in respect of any legal services provided by the law practice; and
  2. To give the client, on such conditions as the Supreme Court may determine, much of the clients documents as are held by the Law Practice in relation to those services.

Section 728(2), subsection (1) does not affect the provisions of Division 11 Part 3.2 with respect to the assessment of costs”.

It is clear therefore that the provisions referred to have the effect of making the 12-month period a moot point.

Legal Profession Uniform Law (2015)

Sections 187(2) and 93(3) (LPUL) seem to suggest that a client has only 30 days after the legal costs became payable to request an itemised bill and must make an application for assessment within 12 months of receiving the Bill of Costs. However, there a number of provisions which make the 30-day and the 12-month periods irrelevant.

Section 198(4) (LPUL) states; “However, an application that is made out of time may be dealt with by the Costs Assessor if the designated tribunal, on application by the Costs Assessor, or the client or third payer who made the application for assessment, determines after having regard to the delay and the reasons for the delay, that it is just and fair for the application for assessment to be dealt with after the 12-month period.”

Section 284(2) (LPUL) states in relation to the referral of matters for costs assessments, specifically to the Legal Services Commission, “Any such applications may be made outside an applicable time limit for making application for costs assessments”.

Section 472(1) (LPUL) states; “On the application of a client of the Law Practice the Supreme Court may order the Law Practice-

  1. To give the client a bill of costs in respect of any legal services provided by the law practice; and
  2. To give to the client, on any conditions that the Supreme Court may determine, any of the client’s documents that are held by the Law Practice in relation to those services.

Section 472(2) Subsection (1) does not affect the provisions of Division 7 of Part 4.3 with respect to the assessment of Costs.”

Even though the LPA (2004) has been repealed, the transitional provision in Schedule 4, clause 4 of the LPUL (2015) keeps the time limits of the 2004 Act alive. It is therefore clear that whilst there are time limits that may seem to favour the Law Practice, in all real circumstances there time limits do not assist.

 

Looking to learn more about cover? Costs Cover is the only place to protect this risk to your business so you are in the right place.

You can view FAQ here or speak to Charles Galayini 

 

 


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