Chapter 6 Fees. Who is Liable? 85. Disclosure Requirements 86 Se#lement of litigious ma#ers 87 Upli5 fees 88 Failure to disclose 88

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1 Chapter 6 Fees Who is Liable? 85 Disclosure Requirements 86 Se#lement of litigious ma#ers 87 Upli5 fees 88 Failure to disclose 88 Agreements 88 Costs agreements 88 Conditional costs agreements (no win, no fee) 89 Fees: Manner of Charging 90 Contingency fees 90 Brief fee and refreshers 91 Daily and hourly fees 91 Preparation fees 92 Advice work 92 Junior brief fees 93 Circuit fees 93 Treatment of disbursements 94 Fees on se#lement 95 Fees in the event of adjournment/not reached 96 Fees paid in advance 97 Mode of payment 98 Billing 98 83

2 84 GOOD CONDUCT GUIDE Recovery of fees 99 Interest on fees 100 Pro bono briefs 101 Ad hoc work 101 Costs Dispute 102

3 FEES 85 Who is Liable? 6.1 At common law, a barrister may recover fees from a legal practitioner, practising as a solicitor, or the client. 1 The introduction of the Act does not alter the common law position. Although the Act imposes disclosure requirements upon barristers in respect of their fees, 2 the Act does not establish a statutory contract between the barrister and solicitor, or the barrister and the client. 6.2 Liability for a barrister s fees is a question of fact as to who are the contracting parties on each occasion. 6.3 In Dimos v Hanos, Gillard D cautioned barristers against contracting directly with the client or on the basis that the client is solely responsible for the fees, because, in his Honour s view, the solicitor is in control of the situation. The solicitor knows both client and barrister. The solicitor knows the client s ability to pay the barrister s fees and charges. The solicitor is always in the best position to obtain moneys in trust Traditionally a barrister s backsheet, memorandum and documents enclosed in the brief evidence the contract between the solicitor and the barrister. The disclosure statement provided by a barrister pursuant to s of the Act will presumably also form part of the contract. 6.5 A solicitor may mark a backsheet at a particular fee for an appearance or advice. If a barrister receives a brief which has been marked at a fee which is less than the barrister s usual fee for such an appearance or advice, the barrister may return the brief. 4 Courtesy and common sense require that a telephone call be made either by the barrister or the clerk to the solicitor prior to the return of the brief for the purpose of negotiating a mutually acceptable fee or to suggest other appropriately qualiled barristers who may be willing to accept the brief. 6.6 A barrister who is briefed to appear in separate proceedings must have a separate backsheet marked for each proceeding. 5 Where a barrister is briefed to negotiate on behalf of several plaintins against one defendant, the barrister may accept a single brief and that brief, subject to the agreement of the barrister, may be marked with a single or 1. Dimos v Hanos P2001Q VSC 1T3. 2. s Dimos v Hanos P85Q P86Q. 4. Rule X6(h). 5. Rule X1(a).

4 86 GOOD CONDUCT GUIDE composite fee. Similarly, where a barrister is briefed by the same legal practitioner to appear in two or more related proceedings, the barrister may accept a single brief to appear in such proceedings, and subject to the barrister s agreement the brief may be marked with a single or composite fee. 6 Related proceedings are delned by Rule X1(d). T Disclosure Requirements 6.T In respect of legal costs, the Act requires legal practitioners to provide information to clients as to the legal costs that will be incurred. Section 3.4.X sets out the information to be provided by a law practice[barrister to a client. This section applies to barristers accepting briefs on a direct access basis. Chapter T discusses direct access ma\ers in detail. 6.8 Section (1) provides that where a law practice intends to retain another law practice on behalf of the client, i.e. a solicitor retaining a barrister on behalf of a client, then the solicitor has to provide the following information as to the barrister s fees] (a) the basis on which legal costs will be calculated^ (b) an estimate of the total legal costs or if it is not reasonably practicable to estimate the total legal costs, a range of estimates of total legal costs together with an explanation of the major variables that will anect the calculation of costs^ and (c) when bills will be rendered. 6.X A barrister does not have to make disclosure to the client as set out in s.3.4.x, but must disclose to the instructing solicitor the information set out in the paragraph above, to enable the solicitor to make the required disclosure to the client. 8 Further, a legal practitioner is required to inform clients as to their rights if they wish to dispute an account The Bar has prepared pro forma disclosure statements between a barrister and a solicitor. Copies of those statements are Annexure C and are also available on-line from the Bar s website The Act provides for exceptions to the requirement for disclosure, X namely] 6. Rule X1(c). T. The delnition of related proceedings for the purposes of rule X1(d) is set out in chapter 5. (See chapter 4,bRetainer and Duties to the Clientd for further discussion of these rules). 8. s (2). X. s

5 FEES 87 (a) if the total legal costs in the ma\er, excluding disbursements, are not likely to exceed et50.00^10 (b) if] (i) the client has received one or more disclosure statements pursuant to s.3.4.x or s (1) from the barrister in the previous 12 months^ and (ii) the client has agreed to waive the right to disclosure^ and (iii) the principal of the law practice decides on reasonable grounds that, having regard to the nature of the previous disclosures and the relevant circumstances, the further disclosure is not warranted^ or 11 (c) if the client is one of the following] (i) a law practice or an Australian legal practitioner^ (ii) a public company or subsidiary^ a foreign company or subsidiary^ a registered Australian body^12 a Lnancial services licensee^13 a Minister of the Crown acting in that capacity^ a government department or a public authority The Act imposes an additional disclosure requirement in respect of se\lement of litigious ma\ers and uplig fees. Se#lement of litigious ma#ers 6.13 Prior to the negotiation of a se\lement of a proceeding, a barrister must either ensure that the solicitor has complied with s (1) or make the disclosure required by that section to the client directly. 15 Section (1) requires that before the se\lement of a proceeding is executed the client is advised of a reasonable estimate of the amount of legal costs payable by the client if the ma\er is se\led, including any costs of another party that the client is to pay, and a reasonable estimate of any contributions towards those costs likely to be received Many barristers, in the ordinary course of advising on a se\lement, would provide an estimate as to costs, however, the section now makes it mandatory for such disclosure to be in writing and for the barrister to ensure that the solicitor has given a reasonable estimate. 10. Or the prescribed amount, whichever is the higher. 11. Although a barrister may decide not to make disclosure pursuant to this section, the safer course would be to make disclosure in all cases. 12. Within the meaning of the Corporations Act 2001 (Cth). 13. Within the meaning of the Corporations Act 2001 (Cth). 14. s (1)(c). 15. s (2).

6 88 GOOD CONDUCT GUIDE Upli5 fees 6.15 An uplig fee is delned by s of the Act to mean ba premium payable on the legal costs (excluding unpaid disbursements) otherwise payable under a costs agreement on the successful outcome of the ma\er to which those costs relate, as referred to in s d. Section deals with conditional costs agreements involving uplig fees Where a barrister enters into a costs agreement involving uplig fees, then the barrister must disclose to the client in writing, before entering into the agreement, the barrister s usual uplig fee expressed as a percentage of those fees and provide reasons why the uplig fee is warranted. 16 Failure to disclose 6.1T The consequences of a failure to disclose the ma\ers required by the Act are] (a) a client will not be compelled to pay, and a barrister will be unable to maintain a proceeding for recovery of fees, unless the costs have been reviewed under Division T of Part 3.4^1T and (b) such conduct may constitute unsatisfactory professional conduct or professional misconduct by a barrister. Agreements Costs agreements 6.18 Barristers may enter into a costs agreement either with solicitors or clients. Although there is no statutory obligation to enter into a costs agreement, any such agreement must comply with the requirements of the Act X A costs agreement must be wri\en or evidenced in writing. A barrister may satisfy the requirement that the costs agreement be in writing if the barrister has provided a wri\en oner and that oner is subsequently accepted in writing or by other conduct. 1X The wri\en oner must clearly state] 16. s T. s.3.4.1t. Division T makes provision for costs review by the Taxing Master of the Supreme Court. 18. s X. s (3).

7 FEES 89 (a) that it is an oner to enter a costs agreement^ and (b) that the client may accept it in writing or by other conduct^ and (c) the type of conduct that will constitute acceptance The Bar has a pro forma disclosure statement and costs agreement. The types of conduct that will constitute acceptance are] (a) signing the document and returning a signed copy to the barrister^ or (b) continuing to provide the barrister with instructions in the ma\er^ or (c) any other method of acceptance. The pro forma disclosure statement and costs agreement is Annexure C and is available on-line from the Bar s website. Conditional costs agreements ( no win, no fee ) 6.21 A barrister may accept a brief fee on the condition that some part or the whole of the fee will only be payable in the event the client obtains a se\lement or a judgment in favour of the client, colloquially known as bno-win, no-feed briefs. A barrister may not accept a brief on the basis of a conditional costs agreement under the Family Law Act 1975 (Cth) or in any criminal proceeding If a barrister accepts a brief on a no-win, no-fee basis, then the barrister has additional obligations in relation to any costs agreement entered into with the client. 22 In particular, the costs agreement] (a) must set out the circumstances that constitute the successful outcome of the ma\er to which it relates (e.g. liability of the defendant either agreed to at mediation or by way of judgment order, to pay the plaintin any amount in excess of e20, plus costs)^ (b) must be] (i) in writing^23 (ii) in clear plain language^ and (iii) signed by the client^ (c) must contain a statement that the client has been informed of the client s right to seek independent legal advice before entering into the agreement^ and 20. s (4). 21. s.3.4.2t(2). 22. s.3.4.2t(3). 23. In contrast with an ordinary costs agreement, a conditional costs agreement cannot be accepted by conduct.

8 90 GOOD CONDUCT GUIDE (d) must contain a cooling-on period of not less than Lve clear business days during which the client, by wri\en notice, may terminate the agreement The requirements contained in paragraphs (b)(iii), (c) and (d), above, are not required if the conditional costs agreement is made between a solicitor and a barrister. 24 Therefore in circumstances where a barrister is asked to accept a brief on a no-win, no-fee agreement three days before the trial of the proceeding, the barrister can only enter into a conditional costs agreement with the solicitor, not the client The Rules identify conditional costs agreements as conditional fee agreements. 25 Rule 200 sets out the circumstances in which a barrister may return a brief accepted under a conditional fee agreement, namely, in circumstances where] (a) the barrister and the instructing solicitor consider on reasonable grounds that the client has unreasonably rejected a reasonable oner of compromise contrary to the barrister s advice^ (b) the client has refused to pay the barrister a reasonable fee for the work done and to be done^ and (c) the client has been informed of the enect of Rule 200 prior to the barrister accepting the brief and the barrister has the Lrm view that the client has no reasonable prospect of success or of achieving a be\er result than the oner. Fees: Manner of Charging Contingency fees 6.25 A contingency fee is a fee calculated by reference to] (a) the value of any property or any transaction involved in the ma\er^ or (b) the amount of any award or se\lement or the value of any property that may be recovered in any proceedings Contingency fees are prohibited by s.3.4.2x of the Act. 24. s.3.4.2t(4). 25. Rule X(f). The Rules employ the language of the 1XX6 Act. 26. s.3.4.2x(1).

9 FEES 91 Brief fee and refreshers 6.2T Traditionally the basis of charging counsel s fees for of a court hearing was a brief fee and a refresher. Party party costs are ogen taxed on that basis, particularly in personal injury litigation. Barristers appearing on behalf of plaintins in personal injury ma\ers may charge on the basis of a brief fee and refresher. Similarly, barristers appearing for defendants who are funded by Victoria Legal Aid in criminal ma\ers may sometimes charge on this basis In respect of the taxation of costs, the Supreme Court (General Civil Procedure) Rules 2005 allow for brief fees and refreshers, or daily fees, in respect of barristers fees for trial. 2T 6.2X Traditionally a brief fee includes remuneration for preparation extending up to at least a substantial part of the day before the hearing, as well as for time spent in court before the Lrst refresher commences. 28 Where fees are claimed on the basis of a brief fee and refreshers, the Supreme Court Taxing Master allows a refresher fee for every Lve working hours (including lunch) ager the Lrst six hours. A Lnal refresher may be allowed for any period less than Lve hours that the hearing occupied. 2X 6.30 Where a barrister is briefed on the basis of a brief fee and refreshers, a refresher of two-thirds of the brief fee is the traditional basis for counsel to charge. The determination of the amount of the brief fee is dictated by the amount of proper and reasonable preparation and the complexity of the factual and legal issues involved in the ma\er. Daily and hourly fees 6.31 The vast majority of barristers today agree fees with instructing solicitors on the basis of daily fees for court appearances and hourly fees for bin chambersd work. Depending on the complexity of the issues of a ma\er, a barrister may negotiate with the instructing solicitor to be paid for preparation. This is either negotiated on a daily fee or an hourly basis. Unless other wise agreed, a daily fee includes all time spent by counsel in court on a day of hearing and all time spent by counsel in preparation and conferences on that day. 2T. Rule 63.81(1)(a) & (b). 28. Magna Alloys & Research Pty Ltd v Kevin Lindsay Coffee (No.2) P1X82Q 2 VR XT. 2X. Supreme Court (General Civil Procedure) Rules 2005, r 63.82(3).

10 92 GOOD CONDUCT GUIDE Preparation fees 6.32 Brief fees make some allowance for preparation, subject to agreement otherwise, and daily fees also include some preparation within the fee charged. In cases which involve complex factual and legal issues it may be reasonable and proper for counsel to charge an additional fee for preparation In Magna Alloys 30 Fullagar D said in relation to the Taxing Master s discretion to allow a separate fee, bthat generally speaking he should allow it only in ma\ers of great complexity or voluminous documentationd. That case involved the taxation of party party costs SigniLcant changes have taken place in the practices of counsel and in the nature of litigation, particularly commercial litigation, since the Magna Alloys decision. It is not uncommon for counsel to charge preparation fees in commercial litigation. Barristers appearing in complex criminal proceedings such as those involving drug charges or fraud charges, which have increasing amounts of paper work, may reasonably charge preparation fees. Preparation fees are also ogen charged in family law ma\ers listed for hearing for more than half a day Barristers ought not to assume that instructing solicitors take into account necessary preparation when brielng. Instructing solicitors are ogen unaware of the extent of preparation required. Barristers should, as with all fees, inform the instructing solicitor that they will be charging preparation and give an estimate as to what the likely cost of that preparation will be. This estimate may sometimes only be able to be given upon receipt of the brief. Barristers are required to comply with the statutory costs disclosure requirements in respect of preparation. That obligation is a continuing one Some solicitors (notably prosecuting authorities and other government departments and agencies) ogen seek to impose strict thresholds (ex per hour for preparation in excess of six hours) or to impose a cap on fees for preparation. The enect of those restrictions, if accepted, may be that a barrister undertakes many hours, or even days, of unpaid work. Counsel should be alert to this possibility arising and negotiate a fee with his or her instructor appropriately. Advice work 6.3T Fees for briefs to advise are usually marked at an hourly rate. Barristers need to take care in providing an estimate of the number of 30. Magna Alloys & Research Pty Ltd v Coffee PNo.2Q P1X82Q VR XT at 10X.

11 FEES 93 hours required to advise, especially in advance of receiving the brief. Experience has shown that briefs to advise ogen take many more hours than expected. If the brief concerns an area of law with which the barrister is unfamiliar, a certain amount of bself-educationd may be involved before the advice can be provided. Most barristers do not charge for the hours involved in such education. Junior brief fees 6.38 Dunior brief fees ought to be agreed on the basis of the junior s seniority, experience and skill, and the responsibility the junior is likely to have during the course of the proceeding. Dunior counsel cannot hide behind the robes of their leader but owe an independent duty of care to the client. 31 Accordingly junior counsel s fees ought to reoect this duty and the obligation of junior counsel to exercise independent forensic judgment. Circuit fees 6.3X Circuit fees are payable where a barrister is briefed to appear in a place within Victoria but outside the barrister s home town, generally outside Melbourne. Circuit fees are designed to compensate the barrister for the expenses which will be incurred for accommodation, meals and travel, although out of pocket expenses might exceed the actual circuit fee paid. Circuit fees are Lxed by the courts. Barristers may negotiate a higher circuit fee with the instructing solicitor in each case. Some barristers are instructed by one Lrm to appear on behalf of a number of clients listed for hearing in the circuit court. A circuit fee is properly charged on each brief Sometimes barristers are briefed to appear in places interstate or overseas or to travel overseas for the purpose of conferring with witnesses. Circuit fees do not apply to those situations. Where a barrister is required to travel interstate or overseas, it is usual for the instructing solicitor to arrange and pay travel expenses. Barristers may choose to pay for their own accommodation and meals and agree a fee with the instructing solicitor on a daily basis to reoect these additional expenses. Alternatively instructing solicitors may prefer to pay all accounts on behalf of the barrister. 31. Flower & Hart v White Industries (Qld) Pty Ltd (1XXX) 163 ALR T44 at T5X.

12 94 GOOD CONDUCT GUIDE 6.41 Barristers are entitled to charge some fee for travelling to far away destinations. As with others, this fee is negotiated according to the individual circumstances. For example, a barrister travelling to London to confer with a witness is likely to lose three to four days in travelling time. The barrister may or may not do some work on the aeroplane, but not for the entire trip. If the barrister was not involved in travelling to London, then the barrister may be actively engaged in other work. The barrister may wish to charge one or more daily fees or an hourly rate for the time spent travelling. Some barristers take the view that the nature of the brief and the fees that will be earned do not warrant charging the client for travel time. Treatment of disbursements 6.42 Generally barristers do not charge separately for disbursements, nor is there provision in the scale for the recovery of disbursements incurred by barristers. Most barristers absorb the costs of photocopying, telephone calls and secretarial assistance in the brief fee. Barristers are not expected to meet the cost of providing copy documents and authorities to the court or to opposing counsel. It is entirely proper for barristers to request that the instructing solicitor obtain appropriate number of copies of documents and authorities to be used at a hearing With the advances in technology many solicitors will scan documents, including correspondence from the other party, and forward the documents for inclusion in the barrister s brief via . This can ogen result in a large amount of printing by the barrister. If a barrister does not wish to absorb that cost, it is reasonable for the barrister to request the solicitor provide a hard copy of the documents However, in some circumstances it may be appropriate for a barrister to charge disbursements, for example long international telephone calls or facsimile costs. When a barrister wishes to charge for these out-of-pocket expenses, the barrister should render an account to the instructing solicitor identifying the costs. Barristers clerks should be consulted as to appropriate ways of identifying these costs. Clerks generally account for disbursements separately, and do not take disbursements into account in calculating their commission or clerking fees.

13 FEES 95 Fees on se#lement 6.45 Where a case se\les before the commencement of the hearing a barrister who has received a brief to appear is entitled to charge either a brief fee or the Lrst day s fee. Notwithstanding that entitlement, whether it is reasonable to charge a brief fee or a day s fee will depend on how long before the hearing date the proceeding was se\led and how much preparation was undertaken In circumstances where a proceeding is se\led within a reasonable period for the barrister to be briefed for the same day, it is the custom of the Bar that the barrister will not charge a fee. This custom is more readily applicable to courts of lower jurisdiction. In circumstances where counsel is briefed well in advance and has forgone the opportunity of other work, or the proceeding has involved signilcant preparation, it may not be unreasonable for counsel to charge a fee which is appropriate in the circumstances. Ogen the barrister will have negotiated a separate preparation fee so that there is no issue as to charging for such preparation. Where preparation has been fully paid there may still be a question as to whether the whole of the appearance fee should be charged. In such circumstances, counsel ogen choose to charge a reduced daily fee (for example, two-thirds) to take into account the lost opportunity to obtain another brief. 6.4T Where a proceeding is se\led during a hearing, unless previously agreed counsel are only entitled to charge the fees incurred to the time of se\lement. Therefore if a proceeding is se\led on the morning of the third day of a trial, counsel may charge three daily fees together with any reasonable and[or agreed preparation fees. If a proceeding is se\led before the end of the hearing in court on the second day, counsel will usually charge only two daily fees plus preparation However, it is not uncommon for counsel entering into costs agreements in respect of long and complex litigation to make provision for at least one day s fee to be paid in the event of se\lement before or during the hearing. For example, if a hearing was estimated to run for four weeks and se\led on the tenth day, counsel may have negotiated a bdisappointment feed of one or two daily fees, to compensate them for having held themselves available for four weeks. 6.4X Courts may sometimes order mediation to take place on the eve of the commencement of a trial or even during the course of a hearing. In such a case it is not unreasonable for counsel to negotiate a fee for the mediation and a brief fee in the event that the proceeding is se\led,

14 96 GOOD CONDUCT GUIDE on the basis that counsel must be available for the trial and must be prepared to appear if the proceeding is not se\led. Fees in the event of adjournment/not reached 6.50 Unless it is specilcally agreed, it is the custom for barristers not to charge a fee in the event that a hearing is not reached on a particular day. In circumstances where a ma\er is not reached, a barrister may retain the brief in chambers with the expectation that the barrister will be briefed when the hearing is re-lxed A barrister is entitled to charge a fee if the hearing is adjourned including where a practice court ma\er is adjourned close to the return date. In circumstances where the hearing is adjourned a day or two before the hearing, the barrister may choose to mark a reduced fee. This is a ma\er within the discretion of the barrister If the barrister is briefed for the party consenting to an adjournment, the barrister should make the instructing solicitor aware that a fee will be charged to enable the solicitor to negotiate payment of that fee as part of the costs thrown away by the adjournment There is an increasing practice amongst some solicitors to bsecured junior counsel to appear on the return of a summons or a hearing, without sending a brief. At the same time the solicitor is hopeful of se\ling the proceeding or summons. At the eleventh hour, the solicitor will either send the brief, giving the barrister a short time to prepare the ma\er, or inform the barrister that the ma\er has se\led. The delivery of the brief, not the telephone booking, is the formal evidence of a retainer. In the absence of a backsheet (or a costs agreement made under s ) it is dipcult, if not impossible for the barrister to charge a fee. In those circumstances, the barrister should insist on the delivery of a backsheet and inform the solicitor that a fee will be charged if the ma\er is se\led. If the solicitor declines to forward a backsheet then the barrister should inform the solicitor that the barrister is prepared to accept a brief in the ma\er in due course, but will accept another brief if onered for that day In circumstances where a hearing is adjourned on the day of hearing due to the sudden ill health of opposing counsel or some other personal and unforeseen circumstance, it is a courtesy of the Bar for counsel not to charge a fee to their client so as to avoid the embarrassment to opposing counsel of being asked to indemnify the client in respect of that fee.

15 FEES 97 Fees paid in advance 6.55 A barrister is entitled to require an appropriate fee be paid on delivery of the brief or before the work is done. Moneys on account of fees are usually held by the solicitor in the solicitor s trust account. If the barrister has some doubt as to whether the solicitor will pay the fees in a timely manner, or where the cost agreement is between the client and the barrister, then the barrister can request moneys on account of fees be paid into the barrister s clerk s trust account Where a barrister enters into a costs agreement in accordance with the Act, a barrister can delne the terms upon which payment of fees is to be made. In Tuczynski v Bristow 33 O Bryan D held that a barrister is entitled to request that his client pay fees in advance or periodically during the course of a trial and to enter into an agreement accordingly. On the facts of that case, the court found that there was no express term restraining the barrister from rendering an interim account for trial fees during the hearing. Further it was not reasonable to imply such a term into the costs agreement. Accordingly, it was held that the barrister was entitled to seek payment of his fees before completion of the trial and to terminate his services before completion of the trial if they were not paid. Notwithstanding that decision, it is preferable, and recommended, that counsel who wish their fees to be paid in advance of a hearing should stipulate that requirement in a costs agreement made under s T Similarly a barrister is entitled to request that money be paid into a solicitor s trust account before agreeing to appear or to commence work on behalf of a client. A barrister may refuse a brief where the barrister has requested fees to be paid in advance and the client has refused to put the solicitor in funds, as that would constitute a reasonable ground to doubt that the fee will be paid reasonably promptly Where fees are paid in advance and the barrister has rendered an account for the work completed in accordance with the brief, the barrister is entitled to be paid from those funds. Accordingly, if a barrister has money paid into the barrister s clerk s trust account for a Lve-day hearing, at the end of each day the barrister is entitled to render an account to the instructing solicitor and then draw down on that money to pay the daily fee. 32. A barrister who does not employ a clerk cannot do this, neither can such a barrister receive advance fees himself or herself because such money is, by delnition, trust money. 33. Tuczynski v Bristow P1XXXQ VSC 16T. 34. Rule X6(b).

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