Lovell, Peter --- "Editorial: The costs commandment" [2016] PrecedentAULA 69; (2016) 137 Precedent 2

---

STATUTORY PROCESSES AND THE COSTS OF NON-COMPLIANCE

by Peter Lovell

In his work Law of Costs, G E Dal Pont remarked:

‘The law of costs remains one of the most litigated aspects of Australian law, in part because practically every case has a costs dimension, which is almost invariably framed by reference to judicial discretion. Each year there are accordingly 1000s of judicial statements or determinations on costs issues by Australian judges. That the various costs loose-leaf services are updated several times each year indicates the fluidity of the area.’^[1]

The ‘fluidity of the area’ became even more apparent with the introduction in Victoria and NSW of Part 4.3 of the Legal Profession Uniform Law from 1 July 2015 (LPUL).^[2] Entitled ‘Legal Costs’, its stated objectives sound harmless, even enticing:

‘(a) to ensure that clients of law practices are able to make informed choices about legal options and the costs associated with pursuing those options;

(b) to provide that law practices must not charge more than fair and reasonable amounts for legal costs; and

(c) to provide a framework for assessment of legal costs.’

However, while loosening some costs compliance screws Part 4.3 and related Rules^[3] tightened others. For example, while the extent of mandatory estimates and costs disclosure was eased, the consequences of non-compliance became more serious.

This informative edition of Precedent highlights the scope and nature of the changes and will hopefully help lawyers to avoid allegations of unsatisfactory professional conduct or professional misconduct.^[4]

The days of simply delivering a lump sum bill to a client for payment, without more, are long gone. Maria-Luisa Coulson provides an interesting and pertinent analysis of the evolution of costs in a (presently) non-LPUL jurisdiction, Western Australia. Phillipa Alexander focuses on costs disclosure under LPUL while Sharon Drew analyses the challenges in relation to estimates and disclosure, including the nebulous aspect of fair and reasonable costs. Interestingly, fair and reasonable costs must also be proportionate, and Peter Rosier’s article dissects this ‘tricky’ aspect.

Assuming a lawyer can overcome these challenges, Mark LaPirow provides practical information on how to draw a bill of costs including the often overlooked, but extremely critical aspect of good file management: an itemised bill of costs is only as good as its underlying file. Roger Quick (the learned lead author of Quick on Costs) focuses on the new requirements in the context of lump sum bills and itemised bills of costs.

Of course, the outcome of any taxation of costs may be subject to review, and Mark Barbazon SC examines the review process under the LPUL in light of the former NSW process of review of a costs assessor’s determination.

Some potentially adverse costs consequences can be avoided by using carefully crafted offers of compromise or Calderbank offers, the tactics and benefits of which are outlined by Genna Angelowitsch and Isabelle McCombe. Similarly, the benefits of mediation and alternative dispute resolution are illustrated by Steve Lancken who suggests that taxations of costs might sometimes be avoided by early, transparent communication with clients. However, not all costs problems can be circumvented, as shown in John Fleming’s incisive analysis of the recent NSW Court of Appeal case, Calvo v Ellimark Pty Ltd.

On reformative front, for many years ‘no win-no fee’ costs agreements have been seen as a means of providing access to justice for persons who might not otherwise be able to afford it. Amy Pascoe discusses whether percentage-based contingency fees will provide greater access to justice in any future developments of costs law. Amy’s article is counterbalanced by Michael Wheelahan QC, who challenges the necessity of contingency fees and raises the spectre of overcharging and possible threats to the independence of the legal profession. Presently, contingency fees are prohibited to such an extent that a lawyer might not be allowed to recover any costs at all for the provision of legal services.

All practising lawyers must get to grips with the consumer protection obligations imposed by the costs legislation and rules in their respective jurisdictions, with the LPUL (presently governing about 70 per cent of the legal profession) leading the way: a close reading of this edition is highly recommended

Peter Lovell practises in commercial law particularly in the area of legal costs. PHONE [phone] EMAIL [e-mail].

---

^[1] G E Dal Pont, Law of Costs, 3^rd ed, LexisNexis Butterworths, 2013, pvii.

^[2] Schedule 1 to the Legal Profession Uniform Law Application Act 2014 (Vic) & (NSW).

^[3] Legal Profession Uniform General Rules 2015, rr70-6.

^[4] Uniform Law ss178(1)(d), 202, 207.