If your dispute relates to Family Law matters, you should contact our Inquiry Line on 9377 1800 for further information.


Costs Disputes

The information in this fact sheet applies to solicitors and barristers acting in New South Wales.

What should a client do if they are not happy with their lawyer’s costs?
If a client is not happy with the costs that their lawyer has charged, they should first explain their concerns to their lawyer, either by phone, in person or in writing. Many lawyers will negotiate over costs. If the client is unhappy with the explanation their lawyer gives them — or if the lawyer will not negotiate with them — the client’s options are mediation or costs assessment.

Mediation
The Office of the Legal Services Commissioner can mediate consumer disputes, including costs disputes, free of charge, and the Commissioner may, by notice in writing, require both parties to participate in mediation either formally or informally. For more information, see the OLSC Fact Sheet on Costs Dispute Resolution.

Costs assessment
Costs assessment is a scheme operated by the Supreme Court of New South Wales. Independent, court-appointed Costs Assessors consider the bill and the client’s objections to it, and decide what is a fair and reasonable amount of costs for the legal services provided. There is no court hearing because the decision is based on the written material that the lawyer and the client submit.

There is an application fee of $100, or one percent of the amount of costs remaining unpaid or in dispute at the time of making the application, whichever is the greater. If the practitioner did not disclose costs before undertaking the work, the practitioner pays for the costs of the assessment; otherwise the costs assessment application fee is paid by the person who applied for the costs assessment. The client should apply for costs assessment within 12 months of receiving the bill. However, an assessor may deal with an application made out of time if they consider it is just and fair to do so.

On completion of the assessment, the Costs Assessor will issue a Certificate of Determination which is binding on all the parties. A person who is not satisfied with a Costs Assessor’s determination may apply for a review of the determination by a panel of two Costs Assessors. There are also limited rights of appeal to the Supreme Court.

Costs assessment is available to a client or practitioner. Clients include third party payers, that is, any person who is not the client but is under a legal obligation to pay all or any part of the legal costs.

If there is a costs agreement which either specifies a lump sum fee, or the dispute is only about the hourly rate at which costs will be calculated, Costs Assessors cannot assess whether the amount charged, or the rate used, is fair and reasonable. However, if the practitioner has disclosed the rate of costs (not the amount), the Assessors may consider other factors such as whether the time claimed to do a particular task was fair and reasonable, or whether it was reasonable to carry out the task at all.

Information about the costs assessment scheme, and costs assessment application forms, are available from the Supreme Court of New South Wales, ph: (02) 9230 8636/ 9230 8803/9230 8714.

Interest
A lawyer is allowed to charge interest on unpaid costs after 30 days from the date that the bill was given to the client (or earlier, if this is written in a costs agreement) if the bill states that interest is payable and shows the rate of interest, then the lawyer may charge interest on unpaid costs.

Court proceedings
A lawyer may choose to sue for unpaid costs.

Under the Legal Profession Act, a lawyer may not commence proceedings against a client for recovery of costs until at least 30 days after giving the bill to the client. There is an important exception to this. If a lawyer has failed to make proper disclosure of the basis of the costs of the legal services provided, then:

• the client does not have to pay the costs, and
• the practitioner may not maintain proceedings for the recovery of the costs,

• Law Access: phone 1300 888 529.
• another lawyer, who will probably charge for his or her services.
• a Community Legal Centre, which provides information and referrals free of charge. For information about the nearest Community Legal Centre phone (02) 9318 2355.
• The Registrars or Deputy Registrars in Local Courts who can assist with procedural advice about the court process or documents to be put to the court. Local Courts are listed under L in the White Pages of the telephone book.