By Charlotte Morson -
Snapshot
- Until June this year, law practices were unable to file an application to have their costs assessed after 12 months.
- Law practices who had not disclosed and applied for an assessment of their costs within 12 months from the date of the last invoice issued to a client in a matter, were effectively statute-barred from recovering unpaid fees.
- The decision in Dive Lawyers paves the way for law practices to apply to have their costs assessed outside a 12 month period.
In New South Wales, a law practice has disclosure obligations to a client pursuant to the Legal Profession Uniform Law (NSW) (‘Uniform Law’). Those obligations, for example, include disclosing the basis on which costs will be calculated and providing an estimate of the total legal costs a client will incur in a matter. The obligations are continuing and, if there is a change to the legal costs that will be payable, a law practice must disclose the change and update the estimate of total legal costs.
The Uniform Law imposes consequences for contravening the disclosure obligations. One consequence is that, before commencing proceedings for the recovery of unpaid legal costs, the costs must have either been assessed or any costs dispute determined by the designated local regulatory authority. What this typically means is the costs have to be assessed in the Supreme Court before recovery action can be taken.
