By Charlotte Morson -
Snapshot
- Failure to provide a client with an estimate that complies with the Uniform Law can have serious consequences for solicitors seeking to recover legal costs.
- Disclosure obligations are ongoing and failure to provide ongoing disclosure can void a costs agreement ab initio.
- Costs agreements are strictly regulated by the Uniform Law, which supersedes established common law principles applying to contracts.
UPDATE: On 5 May 2023, the Court of Appeal delivered its judgment in Bingham v Bevan [2023] NSWCA 86. The Court found the barrister’s entitlement to recover costs was still circumscribed by LPUL s 185(2), and he could not recover more than he would have been entitled to recover if the costs agreement had not been void.
The suite of legislation known as the Legal Profession Uniform Law 2014 (‘Uniform Law’) was enacted in New South Wales almost a decade ago. Since its enactment, only a small number of cost disputes dealing with the provisions of the Uniform Law have made their way through the courts. When they do, the resulting judgments are eagerly pounced upon by the legal costs industry as much needed guidance in the interpretation of the Uniform Law.
The recent decision in Bevan v Bingham & Ors [2023] NSWSC 19 is relevant to all solicitors and the decision highlights the consequences of not strictly complying with the disclosure requirements under the Uniform Law.
The facts
The proceedings concerned the payment of invoices issued by a barrister, Mr Bevan (‘the Barrister’), to a solicitor, Mr Bingham (‘the Solicitor’), acting on behalf of a client, for legal services provided in respect of bankruptcy proceedings in the Federal Court. The Barrister issued a costs agreement to the Solicitor in which he estimated his total fees to be $60,000. Over the next 10 months, the Barrister issued invoices to the Solicitor in an amount of $349,360. The Solicitor disputed the charges, leading the Barrister to file a costs assessment application.
The Costs Assessor, Mr Michael Eagle, determined that the Barrister’s daily and hourly rates should be reduced, and reduced various items in the Barrister’s invoices so that the total costs were assessed at $224,947.79. The Solicitor also filed a costs assessment application which was determined in a relatively similar amount.
The Barrister then filed a review of the determination, arguing that his daily and hourly rates should have been allowed by reason of the costs agreement which, under section 172(4) of the Uniform Law, would be prima facie evidence of the fairness and reasonableness of the rates.
