1. Barristers’ Cost Disclosure Obligations “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

practitioners and partnerships of solicitors who in each case hold a current practising certificate and practise on their own account .

Does not comprehend a solicitor who is not carrying on practice on the solicitor’s own account, whether or not the solicitor holds an 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 317(3). 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 DisclosureThe 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 DisclosureThe 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 ReportsThe 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 written report of the progress of the matter; and

s 317(1)(b): A written report of the legal costs incurred by the client since the last bill .

11. Disclosure on Settlement of Litigious MattersUnder 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) –(3).

Section 312 literally obliges the barrister to disclose “to the client” all of the information.

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 Disclose

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 practice.

The barrister should disclose in writing to the instructing solicitor any such change.

14. Exceptions for “Sophisticated Clients” A barrister retained

on behalf of a “sophisticated client” by a law practice is not required to give initial disclosure, progress reports, or (if there was no initial disclosure) any ongoing disclosure.

But if the barrister negotiates a settlement of a litigious matter for a “sophisticated client”, the barrister must provide the s 312 costs 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 AgreementsCosts 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 AgreementsThe 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 AgreementsOther 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 AgreementsSome 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 claims.

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.