What You Need to Know About Legal Costs

The amount a lawyer can charge you for legal services in Queensland is regulated by the Legal Profession Act 2007 and the rules of the various courts.

Legal costs are divided into two categories namely, Lawyer and Client Costs and Party and Party Costs. The former is sometimes referred to as Indemnity Costs and the latter as Standard Costs.

Party and Party costs or Standard Costs are governed by the rules of the various courts and set a limit on the cost you have to pay if the court orders costs against you in relation to an action.

In some circumstances, the losing party can be ordered to pay Indemnity Costs which are what the winning parties Lawyers have charged him.

Whenever a Lawyer is going to perform legal services for a client and the cost will exceed $1,500, the Lawyer is required to enter into a Costs Agreement with the client. If the Lawyer does not, the Lawyer can only charge the Scale Costs of the appropriate court if it is a litigation matter. A Costs Agreement can be set aside if it does not comply with the Legal Profession Act. A Costs Agreement may be set aside if it is considered not to be fair or reasonable. If it is set aside, then the Legal Practitioner can only charge Standard Costs.

For injury claims, the Legal Profession Act permits a Lawyer and client to enter into what is called a Conditional Costs Agreement commonly called “No Win, No Fee”. For a Conditional Costs Agreement to be valid, it must have a cooling off period of five days and must comply with the Legal Profession Act. The Legal Profession Act permits an uplift on fees of up to 25% on a “No Win, No Fee” Costs Agreement, above which the Lawyer would normally charge.

No Win, No Fee Costs Agreements are subject to what is called the 50/50 rule. That means a Lawyer cannot charge the client more than the client is going to receive as proceeds of the action. By way of example, if the matter settles for $100,000 the Lawyer must first pay the disbursements and statutory charges say by way of example of $20,000, that would leave $80,000. If the Lawyer’s fees costs are $25,000, the Lawyer is entitled to charge $25,000. However, if the Lawyer’s costs are $65,000 the Lawyer may only charge $40,000 so that the Lawyer does not get more money than the client.

Conditional Costs Agreements cannot be used for Family Law or Crime.

A client who is not satisfied with the bill sent by the Lawyer, may have the bill assessed by a Costs Assessor who will assess the bill in accordance with the Costs Agreement or the Statutory Scale if applicable to ensure that all the charges are proper.

Contact Rita Derek of this firm for further advice.

Posted in: Derek Legal Blog at 24 January 18