Class Notes (835,366)
Australia (1,845)
Law (441)
JSB171 (400)
All (349)
Lecture

2.2.1 Duties to the Client--Fees

8 Pages
108 Views
Unlock Document

Department
Law
Course
JSB171
Professor
All Professors
Semester
Spring

Description
Duties to the Client—Fees Overcharging Contract Complete • Contract complete—should run from beginning to close of action: Underwood [1894] o Unless there is some action by client to absolve solicitor from continuing to represent (unclear what action this might be) Overcharging Must not overcharge: s420(1)(b) (may amount to professional misconduct | unsatisfactory professional conduct) Baker v Legal Services Commissioner [2006] (overcharging—charging on no win no fee | recommending $10k settlement when legal fees $19 | charging for services which hadn’t been provided | overstating amount  professional misconduct → struck off) • High Fees o Charging outrageously high fees generally  As a whole: Forman per Kirby J (over $500K in a family law case)  Expensive costs agreements: Roach (old agreement at $300 per hour for legal | $100 for non-legal—new agreement at $300 for all—charging for photocopying | leaving unnecessary phone messages | secretaries shopping | discussing matter  excessive)  Incapactitated client: Towers o Overstating—Charging clerk at partner rates etc: Baker; Roach o Taking advantage of a weak client to charge high fees: Legal Services Commissioner v Towers (solicitor given power of attorney for crazy client—charging $300/hr for shopping & talking to him etc  taking advantage of client’s condition for his own benefit → professional misconduct → struck off) • Recommending settlement for less than legal fees: Baker • Deceiving clients out of money by filing vexatious actions: In Re R and in Re A (1927) (neglected to prepare bills of sale—received money for fees without handing to client || instituted appeal from conviction but not within time limit—asked client to pay costs even though knew it wouldn’t go through  both unprofessional conduct) • Speculative action (no win no fee) → o cannot charge more than the award received by the client: Legal Services Commissioner v Dempsey [2007] (s481C of QLS Act 1948 = may charge no more than half settlement amount, less disbursements & refunds client required to pay— lawyer in breach by not including GST) Baker o Cannot charge if no favourable outcome: Baker v Legal Services Commissioner [2006] (overcharging—charging on no win no fee | recommending $10k settlement when legal fees $19 | charging for services which hadn’t been provided | overstating amount  professional misconduct → struck off) o Barristers—Speculative fees—  only where impecunious or otherwise deserving: br121  premium never above 50%: br121 • Firm must ensure management systems in place to ensure appropriate billing & disclosure: s117(3) LPA • No amount of pamphlets can justify excessive billing: LSNSW v Foreman per Kirby P • Recently: Shine lawyers reportedly charging $300 per hous for secretaires buying chocolates & thank you card for dr’s secretary—“no fair-minded client would think justified”: The Australian 16/9/10 Cost agreements Between— Andrew Trotter LWB433 Professional Responsibility • Client & law practice: s322(1)(a) • Client & 3P law practice retained by client’s lawyers: s322(1)(b) • Client’s lawyers & 3P law practice retained by lawyers on behalf of client: s322(1)(b) • Law practice and associated third party payer: s322(1)(d). Formalities • Written or evidenced in writing: s322(2) • Offer must clearly state— o It is an offer to enter into a costs agreement: s322(4)(a) o Offer can be accepted in writing or other conduct: s322(4)(b) o Type of conduct constituting acceptance: s322(4)(c) • Acceptance can be by writing or conduct: s322(3) ← NB—need not conform with formalities if no requirement for costs disclosure: s311 etc Conditional cost agreements May be conditional on outcome: s323(1) • Not—in criminal or family matters: s323(2) • May— o Define ‘successful outcome’: s323(3)(a) o May provide for disbursements to be paid irrespective of outcome: s323(3)(b) • Requirements— o Form— (not for sophisticated clients or law firms: s323(4)(a))  In writing: s323(3)(c)(i)  In clear plain language: s323(3)(c)(ii)  Signed by client: s323(3)(c)(iii) o State that client has been informed of right to seek independent legal advice: s323(3)(d) o Cooling off period > 5 business days: s323(3)(e)  If terminates → • Can only recover costs for services performed— (s323(5)(a)) o before termination, o on instructions of client o client knew the legal services would be performed during that period • Cannot recover uplift fees: s324(5)(b). Uplift fees Conditional cost agreement may provide for uplift fee: s324(1) • Agreement must contain— o Basis of its calculation: s324(2) o estimate of uplift fee, or if not reasonably practicable, both:  A range of estimates: s324(3)(a)  An explanation of major variable that will effect the uplift fee: s324(3)(b). • Litigious matter → must not exceed 25% of total legal costs, excluding disbursements: s323(4) o If fees discounted—calculate with full amt before deduction: s323(5) • Contravention → maximum penalty 100 penalty units: s324(6) Contingency fees—prohibited Cannot— • Calculated fees as % of outcome: s325(1) (Max 100PU); br120 o This does not apply to applicable scale of costs: s325(2) • Transfer part of interest in proceedings to practice: s325(3) (Max 100PU) Andrew Trotter LWB433 Professional Responsibility Overcharging on Speculative Action • cannot charge more than the award received by the client: Legal Services Commissioner v Dempsey [2007] (s481C of QLS Act 1948 = may charge no more than half settlement amount, less disbursements & refunds client required to pay—lawyer in breach by not including GST) Baker • Cannot charge if no favourable outcome: Baker v Legal Services Commissioner [2006] (overcharging—charging on no win no fee | recommending $10k settlement when legal fees $19 | charging for services which hadn’t been provided | overstating amount  professional misconduct → struck off) • Barristers—Speculative fees— o only where impecunious or otherwise deserving: br121 o premium never above 50%: br121 Disclosure Must disclose costs in writing before, or as soon as practicable after, the other law practice is retained: s310(1) • Plain, clear language: s314(1)(a) • Client ESL → Foreign language where appropriate: s314(1)(b). • Client illiterate → convey orally and in writing: s314(2) Must disclose • Basis for calculating legal costs, including scale of costs: s308(1)(a) • Rights of client to— o negotiate costs agreement with law practice: s308(1)(b)(i) o receive bill from law practice: s308(1)(b)(ii) o request itemised bill after receipt of lumps sum: s308(1)(b)(iii) o be notified of changes where they occur: s308(1)(b)(iv) o progress report under s317 (see below) s308(1)(g) o accept written offer to enter into agreement with law practice under corresponding law: s308(1)(l)(i) • Total—estimate of total legal costs were reasonably practicable, or o if not practicable, then range of estimates, with explanation of major variables of the costs: s308(1)(c) • Intervals—if any, when client will be billed: s308(1)(d) • Interest—rate, if any, practice charges overdue costs & whether a stated rate of interest is a ‘benchmark’ interest: s308(1)(e) o Benchmark is = to or calculated from time to time by ADI or other body or organisation, or other legislation s308(2) • Orders—Litigious matter → estimate of o Range of costs recoverable in litigation s308(1)(f)(i) and o Range of costs client may be ordered to pay if unsuccessful s308(1)(f)(ii)  Must state that—  costs in favour of client may not cover all of the client’s legal costs: s308(4)(a) and  Statement that disbursements may be payable by the client even if the client enters into a conditional costs agreement: s308(4)(b) • Disbursements includes outlays: s300 • Contact—Details of person client may talk to about costs: s308(1)(h) • Disputes—Avenues to dispute client costs. These are: o Costs assessment under div 7: s308(1)(i)(i) o Setting aside of costs agreement under s328: s308(1)(i)(ii)  Limits that apply to taking an action here: s308(1)(j) Andrew Trotter LWB433 Professional Responsibility • Law of this jurisdiction applies to legal costs: s308(1)(k) In particular outcomes— • Where matter settled—reasonable estimate of costs payable: s312(1)(a) o Reasonable estimate of contributions to pay for other party: s312(1)(b) • Uplift fees—additional costs payable on successful outcome (s300) → o Law practices costs: s313(1)(a) o Uplift fee, or basis of calculation of uplift fee: s313(1)(b) o Reasons why uplift fee is warranted: s313(1)(c). • Changes—must disclose in writing, as soon as practicable after practice becomes aware of them: s315 Exemptions Costs need not be disclosed where— • Total legal costs are not likely to exceed $750, excluding disbursements & GST: s311(1)(a) o If situation changes & likely to exceed $750 → must disclose asap: s311(2) o Still entitled to progress reports: s311(5)(a) (under s317, unless s317(5) applies—not to sophisticated clients) • Client waives disclosure a. 1 or more disclosures in past 12 months: s311(1)(b)(i) b. Client agreed in writing to waive right of disclosure: s311(1)(b)(ii) c. Decides on reasonable grounds that disclosure not necessary: s311(1)(b)(iii) .  Keep written record of decision that disclosure not required with files: s311(3)  If not on reasonable grounds → could be unsatisfactory professional conduct or professional misconduct: s311(4) o Still entitled to progress reports: s311(5)(a) (under s
More Less

Related notes for JSB171

Log In


OR

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


OR

By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.


Submit