CPD 15 Barrister Costs Disclosures

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					1. Barristers’ Cost Disclosure
   “Law practices” (including barristers)
    must make costs disclosures under
    division 3 of part 3.4 of LPA .
   These provisions have been force since
    LPA commenced on 1 July 2007.
   Non-compliance by a barrister may
    have very significant adverse
    consequences .
2. To Whom Must Disclosure
   be Made?
   The primary obligation is to make disclosure
    to the “ client” .
   “Client” probably means the person who has
    retained the barrister’s instructing solicitor.
   Disclosures must also be made to any
    “associated third party payer”.
   A barrister retained by a “law practice” has
    only limited disclosure obligations.
3. What is a “law practice”?
   Comprehends sole                Does not comprehend a
    practitioners and                solicitor who is
    partnerships of solicitors       not carrying on practice
    who in each case hold a          on the solicitor’s own
    current practising               account, whether or not
    certificate and practise         the solicitor holds an
    on their own account .           unrestricted practising
                                     certificate .
4. A Barrister Retained by a
   “Law Practice”
   Need only give limited initial disclosure to
    the law practice: s 309(2), 308, 313.
    Need only give limited progress reports
    where requested by the law practice: s
   May have to give “the client” costs
    information if the barrister negotiates
    settlement of litigation: s 312(1), r 81 .
   May have to make ongoing disclosure to
    “the client”: s. 315.
5. Initial Disclosure
      The solicitor must disclosure to the client the
      barrister’s costs under s 309(1):

   s 308 (1)(a): Whether any scale of
    costs applies to any of the costs .
   s 308(1)(a): The basis on which legal
    costs will be calculated (including
    details of any uplift fee: s 313(1) .
   s 308(1) (c): An estimate of the total
    legal costs if reasonably practicable.…
6. Initial Disclosure
      The Solicitor must disclosure to the client the
      barrister’s costs under s 309(1)

   s 308(1)(c): If an estimate of the total
    legal costs is not reasonably practicable
    a range of estimates of the total legal
    costs, and an explanation of the major
    variables .
   s 308(1)(d): Details of the intervals, if
    any, at which the client will be billed.
7. Initial Disclosure
   Under s 309(2), the barrister must
    disclose to the instructing solicitor only
    the information “necessary” to enable
    the solicitor to disclose that s 309(1)
    information about the barrister’s costs.
8. Initial Disclosure
   In some cases, the only details required
    of the barrister by s 309(2) may be the
    barrister’s rates or standard fees
    (including any uplift fee), terms relevant
    to costs (e.g., any cancellation fee or
    disbursements), and billing intervals .
9. Initial Disclosure
   But barristers generally should give
    their solicitors more rather than less
    information about their costs .
10. Progress Reports
       The barrister must respond to the instructing solicitor’s
       request for information necessary to enable the solicitor to
       comply with the client’s request for:

   s 317(1)(a): A                    s 317(1)(b): A
    written report of the              written report of the
    progress of the                    legal costs incurred
    matter; and                        by the client since
                                       the last bill .
11. Disclosure on Settlement
   of Litigious Matters
Under s 312, the lawyer who negotiates
  the settlement must disclose:
 A reasonable estimate of the legal costs
  payable by the client, including those of
  another party payable by the client
 A reasonable estimate of any
  contributions towards those costs likely
  to be received from another party
12. Disclosure on Settlement
    of Litigous Matters
   The barrister must disclose his or her
    costs, and the instructing solicitor must
    respond to the barrister’s request for the
    other necessary information: LPR, s 81(2) –
   Section 312 literally obliges the barrister
    to disclose “to the client” all of the
    The barrister should at least ensure that
    the instructing solicitor provides all the
    information to the client on the barrister’s
    behalf .
13. Ongoing Obligation to
   Section 315 obliges a “law practice”
    to disclose in writing “to the client”
    any substantial change to anything
    included in a previous disclosure.
   It is unclear whether this applies to
    a barrister retained by a law
   The barrister should disclose in
    writing to the instructing solicitor
    any such change.
14. Exceptions for
   “Sophisticated Clients”
   A barrister retained on         But if the barrister
    behalf of a                      negotiates a settlement
    “sophisticated client” by        of a litigious matter for
    a law practice is not            a “sophisticated client”,
    required to give initial         the barrister must
    disclosure, progress             provide the s 312 costs
    reports, or (if there was        disclosure.
    no initial disclosure) any
    ongoing disclosure.
15. Exceptions for
   “Sophisticated Clients”
   A large range of “sophisticated clients”
    is identified in ss 311(1)(c).
   A “law practice” and an “Australian legal
    practitioner” are “sophisticated clients”:
    s 311(1)(c)(i).
   But a barrister’s instructing solicitor is
    probably not a “client” and therefore
    not a “sophisticated client”.
16. Barristers’ Cost Agreements
Costs agreements may be made between:
  s 322(1)(a): “ a client and a law
   practice retained by the client; or”
  s 322(1)(b): “a client and a law
   practice retained on behalf of the
   client by another law practice; or”
17. Barristers’ Cost Agreements
   s 322(1)(c): “a law practice and
    another law practice that retained that
    law practice on behalf of a client; or”.

   s 322(1)(d): “ a law practice and an
    associated third party payer” .
18. Barristers’ Cost Agreements
   Barristers retained by a law practice ordinarily
    should enter into a costs agreement with the
    instructing solicitor under s 322(1)(c).
   First, barristers will need to enter into a costs
    agreement to become entitled to recover the
    barrister’s agreed costs, instead of being
    relegated to an assessor’s decision.
    Secondly, barristers ordinarily need to ensure
    that the instructing solicitor is personally
    liable to pay the barrister’s costs.
19. Barristers’ Cost Agreements
      The costs agreement should include at least:

   The information the barrister is obliged
    to disclose: s 309(2).
   A provision rendering the instructing
    solicitor personally liable for the fees,
    regardless whether the client has put
    the instructing solicitor in funds.
   Terms of payment.
20. Barristers’ Cost Agreements
       Other possible provisions include:

   s 321 and regulation 82: Provision for interest on
    unpaid costs
   s 303(1)(c)(i) and (2)(a), (3): A choice of law
    clause – but these provisions contemplate such
    clauses in agreements with “the client”.
   s 344: A “sophisticated client” may contract out of
    division 7, which concerns costs assessment,
    including possible referral for disciplinary action for
    excessive costs: s 343. It is unclear whether such a
    clause in a barrister’s costs agreement with a solicitor
    is effective.
21. Barristers’ Cost Agreements
Some clauses are ineffective

   s 322(5): Contracting out of costs
    assessment under division 7, otherwise
    than by sophisticated clients .
   s 323(2): Conditional costs
    agreements about criminal law or family
    law matters …
22. Barristers’ Cost Agreements
   s 324(4):Uplift fees exceeding 25% of
    the legal costs excluding disbursements.
   s 325: Contingency fees and the like.
   s 347: (Ordinarily) provisions
    exceeding the prescribed maximum
    payment for speculative personal injury
23. Form
   A costs agreement must be either written or
    evidenced in writing: s 322 (2).
   That requirement is fulfilled (except for a
    “conditional costs agreement”) by a written
    offer that is accepted either in writing or by
    other conduct, so long as the offer complies
    with s 322(4) .
   A conditional costs agreement ordinarily must
    comply with the more detailed requirements
    of s 323 (but see s 323(4)).
24. Void Costs Agreements
   A costs agreement made in
    contravention of division 5 is void.
   Costs are then limited to the applicable
    scale of costs or assessment: s 327.
   If a costs agreement includes a
    prohibited contingency fee no costs are
    recoverable: s 327(5).
25. Setting Aside Costs Agreements
    and Assessments of Costs
   On application “by a client” or “associated third
    party”, the Supreme Court may order that a costs
    agreement be set aside if satisfied the agreement is
    not fair or reasonable: ss 328(1), 322(6).
   But a law practice which retained and made a costs
    agreement with a barrister is not given any right to
    apply for that agreement to be set aside.
   Therefore, a barrister’s costs calculated pursuant to a
    costs agreement made in conformity with LPA after
    proper disclosure should be assessed by reference to
    the costs agreement: ss 336, 340.

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