A BILL FROM YOUR LEGAL PRACTITIONER WHAT TO DO IF YOU THINK IT S TOO MUCH

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1 A BILL FROM YOUR LEGAL PRACTITIONER WHAT TO DO IF YOU THINK IT S TOO MUCH Western Australia Legal Profession Complaints Committee NOTE: THIS FACT SHEET APPLIES TO: ALL INSTRUCTIONS GIVEN PRIOR TO 1 MARCH 2009 NEW INSTRUCTIONS GIVEN BETWEEN 1 MARCH 2009 AND 30 JUNE 2009 ONLY IF A COSTS AGREEMENT IS ENTERED INTO PURSUANT TO THE LEGAL PRACTICE ACT Taxation If you receive a bill from your legal practitioner which you think is too much then you have the right to have it assessed by the court. These days when we think of taxation we think of what we have to pay to the government. However, to tax also means to determine the amount of or to assess. The court calls the process of assessing a legal practitioner s bill taxation. Legal practitioners fees Legal practitioners cannot charge what they like. There are two usual ways for calculating legal practitioners charges: firstly, in accordance with official costs scales or, secondly, in accordance with a written costs agreement between you and your legal practitioner. Costs scales may be found at the website of the Legal Costs Committee Official costs & scales The level of fees which legal practitioners may charge is set by the Legal Costs Committee under Section 210 of the Legal Practice Act. (From now on we will simply call this the Act ). This Committee consists of 3 legal practitioners and 3 lay persons, one of whom is an accountant. The fee which a legal practitioner may charge depends on the type of work that he/she has done. This Committee issue schedules which set out the various levels of fees for particular kinds of work - these schedules are called scales.

2 2 For example, if your legal practitioner has acted for you in civil litigation in the Supreme Court or the District Court, and court proceedings have commenced, he/she must charge on the basis of the scale which is set out in the Scale of Costs determined by the Legal Costs Committee under Section 210 of the Act which relates to the Supreme Court unless you have signed a written costs agreement. In two kinds of proceedings your legal practitioner is not permitted to charge more than the relevant scale of costs in any event. Firstly, from 26 May 1995 a legal practitioner can only charge pursuant to the relevant scale for work done in respect of workers compensation proceedings, unless a particular item of work is unusually complex. Secondly, from 4 May 1994 for personal injury actions arising from motor vehicle accidents a legal practitioner cannot charge more, in total, than the applicable scale of costs. Written agreements This is an agreement, signed by you, which sets out the rate of fees the legal practitioner will charge for the work to be done for you. If there is no written agreement your legal practitioner must charge you in accordance with the official costs scales. Fees and disbursements The bill which you receive from a legal practitioner will normally include two parts. The first part relates to what the legal practitioner charges for work that he has actually done - these are the legal practitioner s fees. The other part relates to money that the legal practitioner had paid out on your behalf, for example on title searches or court filing fees -these are called disbursements. What to do when you receive a bill There are two types of bills which a legal practitioner may send. The first type simply sets out a figure without giving details of how the amount of fees has been calculated. This is called a lump sum bill. A lump sum bill should set out the disbursements separately from the legal practitioner s fees. The other type gives details of how the amount of the legal practitioner s fees have been calculated. This is called an itemised bill. In the case of a lump sum bill legal practitioners are required by law (Section 231 of the Act) to have on the face page of their bills a notice to you in the following form: Within 30 days of receipt of this account you may require me by notice in writing to provide to you an itemised bill of costs the subject of this account. Within 30 days of receiving an itemised bill of costs, you may require me by

3 3 notice in writing to submit the bill of costs to a taxing officer of the Supreme Court for review of the amount of costs charged to you, the subject of this account. In the case of an itemised bill legal practitioners are required by law (Section 232 of the Act) to have on the face page of their bills a notice in the following form: Within 30 days of receiving this account you may require me by notice in writing to submit the bill of costs to a taxing officer of the Supreme Court for review of the amount of costs charged to you, the subject of this bill of costs. The first thing to do when you get a bill is to decide whether it is a lump sum bill or an itemised bill. If it is a lump sum bill then you can request an itemised bill. Section 231 of the Act provides that if you receive a lump sum bill then you may apply in writing for an itemised bill within 30 days of receiving the lump sum bill. Form 1 provides a sample request for an itemised bill. The lump sum bill is of no effect once an itemised bill is requested (Section 231(4) of the Act) and it may be that the legal practitioner charges more once the fees are itemised. Once you receive an itemised bill go through the items. The bill should itemise, or detail, all the work that was done and how much you are being charged for each part of the work. You may simply not have realised all the various things that your legal practitioner needed to do to act for you. Once you receive an itemised bill the figure may not seem as high as you first thought. Once you receive an itemised bill, or if the first bill you received was itemised, then within 30 days of receiving the itemised bill you may request that the legal practitioner have the bill assessed by the court, ie. taxed. This is done by writing to the legal practitioner requesting that he tax his bill. Form 2 sets out a letter of request for an itemised bill to be taxed. You should be aware of the fact that, under the Act, the practitioner, if asked to tax his bill, has the right to prepare and serve an amended bill of costs which will stand in place of his original bill (Section 237 of the Act). The amended bill may, of course, be for a higher amount than his original bill. Whether you are requesting an itemised bill under Section 231(3) or requesting taxation under 232(3) of the Act, if you are outside the 30 day time limit then still make the request to your legal practitioner. If your legal practitioner refuses then you may write to the Court and ask for an extension of time or you may file in the Court an originating motion seeking an extension of time supported by an affidavit

4 4 sworn by you (Section 229 of the Act). If you choose to send a letter to the Court it must be in the same terms as the letter set out in Form 3 and you must serve a copy of the letter on your legal practitioner. Attached to Form 3 are notes that will assist in completion of the letter to the Court. The Principal Registrar at the Supreme Court can allow an extension of time if there is some good explanation for the delay in making the request. The matters which the Court may take into account in deciding whether to allow the extension include the reason for the delay in making the request, whether there is evidence that suggest that the bill may be excessive and any possible prejudice to you or your legal practitioner as a result of the delay. Accordingly, if you wish to apply for an extension of time you should do so as soon as possible. The request for an extension of time attracts a fee which is presently $246 for an individual and $370 for a person other than an individual. You will be notified by the Court of the date when your application is being considered either for directions or for hearing. If your legal practitioner disputes the facts you set out in your letter, before reaching a decision the Registrar may direct that affidavits be filed by you or your legal practitioner or both. Once you request that a bill be taxed Section 237 of the Act requires the legal practitioner to lodge the bill of costs with the taxing officer of the Supreme Court within one month of receiving your request. He must also serve a copy on you. If the legal practitioner doesn t do so within one month a) write immediately to the legal practitioner, and b) 7 days later tell the Complaints Committee. Once the bill of costs has been lodged by the legal practitioner the taxing officer will fix a date, time and place for the hearing and the legal practitioner must then send you notice of the date, time and place and a copy of the bill, at least 7 days before the date fixed for the taxation. You will need to attend at the taxation. At the taxation the legal practitioner will explain the work that he has done to the taxing officer and explain why he charged that amount. The taxing officer will ask you what items you object to and why you object to them. The taxing officer will consider the work that has been done and then compare that to the amount allowed by the scale, if a scale applies, or the fees agreed in the written agreement. The taxing officer will then either allow the item at that amount or reduce the amount. If he reduces the amount then it is said to be taxed-off. In those cases where there is no written agreement as to costs and the work done does not come within an official costs scale the taxing officer will apply what he considers a reasonable rate to the bill depending upon the complexity of the work done.

5 5 The taxing officer of the Supreme Court may in some circumstances, instead of taxing the bill himself, transfer the bill to the court which dealt with the subject matter of the bill for taxation. Taxing fee There is a taxing fee payable by the legal practitioner when he lodges the bill for taxation. At taxation this is added to the bill. The fee is $173 for an individual and $259 for a person other than an individual. In addition to the lodgement fee a taxing fee at the rate of 2.5% of the bill is added to the amount at which the bill is drawn. The costs of the taxation of the legal practitioner s bill The taxing officer will determine who should pay the costs of the taxation of the legal practitioner s bill at the conclusion of the taxation. If the bill is not reduced at all or only by a small amount then you will have to pay the costs of the taxation of the legal practitioner s bill, including the legal practitioner's time for preparing for and attending the taxation and the taxing fee. If the bill is reduced by a substantial amount the legal practitioner may have to pay the costs of the taxation of the bill. Applying to review a written agreement If you have entered into a written agreement regarding the legal practitioners fees you can apply to the Supreme Court pursuant to Section 222 of the Act to have the agreement reviewed on the ground that it is unreasonable. This is by petition or summons. The court may reduce the level of fees which have been set by the written agreement or have the fees determined under the official costs scales. Appeal against decision of taxing officer At the conclusion of the taxation the taxing officer will sign a certificate as to the amount of the bill. You are entitled to appeal against the decision of the taxing officer if you are unhappy with his decision. To appeal you must apply to a Judge in chambers to review that decision within 14 days of the taxing officer signing his certificate. Legal practitioners bills and family court proceedings Refer to the separate information sheet provided by the Family Court of Western Australia. In respect of fresh matters commenced after 30 June 2008, state taxation legislation applies in respect of legal practitioner and client costs refer the brochure.

6 6 FORM 1 [Name of legal practitioners] Barristers & Solicitors [Address] Dear Sirs I refer to your bill dated for the sum of $, which was received by me/us on Under Section 231 of the Legal Practice Act I/we require you to provide me/us with an itemised account. Yours faithfully

7 7 FORM 2 [Name of legal practitioners] Barristers & Solicitors [Address] Dear Sirs I refer to your bill dated for the sum of $, which was received by me/us on Please take notice that it is my/our intention to have the bill taxed. Accordingly, pursuant to Section 237 of the Legal Practice Act will you please lodge your bill of costs with the taxing officer of the Supreme Court within one month of this notice. Yours faithfully

8 The Principal Registrar Supreme Court of Western Australia Stirling Gardens PERTH WA 6000 Dear Sir 8 FORM 3 LPA / (Court use only) Application for an enlargement of time pursuant to s.229(a) of the Legal Practice Act I, of apply for an enlargement of time within which to require my solicitors to: (Insert name address) your and give me an itemised bill (pursuant to s.231(3) of the Act) or tax their bill (pursuant to s.232(3) of the Act). 2. My solicitors are: Their address is: 3. This application concerns a bill that I have received from my solicitors dated: I attach a copy of the bill. 4. I asked my solicitors to: or give me an itemised bill (pursuant to s.231(3) of the Act) by a letter dated:. I attach a copy of my letter. tax their bill (pursuant to s.232(3) of the Act) by a letter dated:. I attach a copy of my letter. 5. I attach a typed statement that sets out why I seek an enlargement of time. (Tick whichever applies) (Insert your solicitors name and address) (Set out date of bill or bills and attach a copy) (Insert date of letter and attach a copy) (Insert date of letter and attach a copy) 6. Date: Applicant (Sign name insert date) your and the

9 9 NOTES TO FORM 3 How to Complete an Application for Enlargement of Time form 1. The form may be typed or completed in black or blue ball point pen. If it is not legible it will not be accepted for filing by the Court. 2. You must do the following when completing the form: Para 1: You must set out your name and address in full. A post office box is not acceptable. You must also make it clear (by ticking the appropriate box) whether you seek an extension of time to require your solicitors to give you an itemised account or an extension of time to require your solicitors to tax their bill. You must tick one of the boxes. Para 2: Para 3: Para 4: You must set out the full name and address of your solicitors. You must set out the date of the bill to which your application relates. If the application concerns more than one bill then you must set out the date of each bill, if necessary in an attachment to the application. You must also attach to the application a copy of each bill. You may have written to your solicitors asking them to give you an itemised account or to tax their bill but they have not done so. If you have asked them to give you an itemised account then you must tick the first box and note the date of your letter. You must attach to the application a copy of your letter. If you have asked them to tax their bill then you must tick the second box and note the date of your letter. You must attach to the application a copy of your letter. If you have done neither, then you should not complete this paragraph. Para 5: You must attach to the letter a statement that sets out why you seek an enlargement of time. Where possible the statement should be typed. A handwritten statement will only be accepted where it is legible and written in a black or blue ball point pen. The matters that the Court may take into account when considering an application are: the reason for the delay in question; whether a refusal to enlarge time may cause injustice to you; whether there is evidence that suggests that the bill may be excessive;

10 10 whether, and to what extent, enlarging time would cause prejudice to your solicitors; and your solicitor s reasons for opposing the application. You should address those matters in your statement. The Court will not be limited to those matters however. They are simply set out as a guide to assist you. Para 6: You must sign and date the application. 3. Once you have completed the form you should post it to the Court together with a cheque for the filing fee. As the Court fees change from time to time you should telephone the Court prior to posting your application to find out the current fee. The Court s address and telephone number are: Stirling Gardens, Barrack Street, Perth WA Tel: Alternatively, you may attend at the Central Office of the Court and file the form. You will be required to pay the filing fee when filing the form. Updated 1 March 2009 LPCCWA Ad d ress correspondence t o: PO Box Z5293, S t George s Te rra ce, Perth WA nd Floor, Colonia l Building, 55 St George s Te rrac e, Pe rth W A tel (08) / f ax (08) / emai l l p cc@lpbwa.com / rg.au