The following two cases highlight the potentially disastrous consequences which can result for solicitors who self-represent during cost disputes. In both of these cases, cost disputes arose despite no suggestions in either matter that the solicitor had acted negligently or acted contrary to their clients’ interests. The solicitors were unsuccessful in both matters incurring enormous financial and emotional costs, including orders to pay the significant costs of the proceedings.
In Piper Alderman -V- Smoel & Wooster (2017) VSCA 42 (9.3.17), the Victorian Court of Appeal dismissed the solicitors appeal and determined that the solicitors lumpsum bill was an itemised bill within the meaning of the term in s188.8.131.52 of the Legal Professions Act 2004 and therefore capable of being dealt with by the Costs Court.
The Respondents, Smoel and Wooster were trustees appointed for the Morris Family Superannuation fund. The solicitors were solicitors for the fund for many years before the respondents were appointed. The respondents sought to file a summons for taxation in respect of a number of invoices, most of which had already been paid. Therefore, any reduction on taxation would require a refund be made by the solicitor.
The solicitors opposed the Summons saying that the bills were lump sum bills and therefore they were not bound by them. If this was the case they could then create lump sum bills which would invariably increase the bill thereby creating a “buffer”.
Any reduction made by Costs Court would be either completely absorbed by the buffer, or in any event, significantly reduce the extent of the refund.
The solicitors lost at first instance and on appeal and were ordered to pay costs of both proceedings.
In Ryan -V- Vizovitis, the Appellant, Ryan represented the respondent Vizovitis in relation to two car accidents which occurred in 1994 and 1996.
The cases were determined successful on behalf of Vizovitis having settled in November 2003 for $50,000 plus costs and $75,000 plus costs.
On 19th October 2004 proceedings were commenced in the Supreme Court ACT by Vizovitis to determine whether the two costs agreements between the parties were fair and reasonable.
The court at first instance and on appeal set aside the costs agreements and reduced the fees charged by $30,000 plus interest of $23,250.
The solicitor was also ordered to pay costs at first instance and of the appeal.
In obiter, the court considered that the solicitor Ryan when representing herself was far too emotionally invested in the matter and could not act with any degree of objectivity.
This lengthened the case and added enormously to the costs which were estimated to have blown out to $400,000.
This clearly was a disastrous result for the solicitors. The similarities between the matters can be summarised as follows:
- The Solicitors were unsuccessful in both matters, represented themselves and incurred enormous costs, including orders to pay the costs of the proceedings.
- There was never any suggestions in either matter that the solicitors had acted negligently in representing their clients or that they had acted contrary to their clients interest in the conduct of their cases.
- A lawyer representing themselves in a costs dispute may lack the necessary objectivity in a very complex law due to their emotional involvement.
By John Andriano – Andriano & Associates, Accredited Specialist Personal Injury Law
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