The Law Handbook 2024

56 Section 2: Getting help The costs disclosure statement must: • explain how the lawyer will charge you for your matter (the billing method) – for example, this may be a fee calculated on the basis of time spent, or an agreed fee based on value or tasks completed (see ‘How solicitors charge’ below); • provide you with an estimate of the total legal costs you will need to pay (including GST and disbursements); • include information about your rights to: – negotiate the costs agreement and billing method, – receive a bill and ask for an itemised bill (see ‘How solicitors charge’ below), – ask for the VLSB+C’s help if you dispute the costs charged by your lawyer. Updated costs disclosure If there is any significant change to the information your lawyer has given you about the costs you will be charged, they must update you in writing. Before you finalise any legal matter, your lawyer must give you a reasonable estimate of the total legal costs you will have to pay. This should include any legal costs of another party and any payments you should receive from another party. These costs may be paid as part of a court order or an agreement settling the dispute. Consent and understanding Your lawyer must take all reasonable steps to make sure you understand and consent to the course of action they’re recommending for your matter, and to the estimated costs involved. You should have a clear written description of the work they will be doing for you. If you don’t understand what this description means, it’s important to ask your lawyer to explain it to you using plain language. Lawyers’ costs must be fair and reasonable Lawyers must not charge more than fair and reasonable legal costs. The law sets out the factors that must be considered when determining whether costs are fair and reasonable, including: • the level of skill, experience, specialisation and seniority of the lawyer(s) working on the matter; • the level of complexity, uniqueness and difficulty of the issues involved; • how much the matter is of public interest; • the labour and level of responsibility involved; • the circumstances, for example: – the urgency of the matter and amount of time spent on it, – the time and place where the legal work was carried out, – the number and importance of any documents involved, – the quality of the completed work, – the retainer and instructions (stated or implied) given for the matter. How solicitors charge A solicitor’s bill is in two parts. First, there is the solicitor’s professional costs – the fee for their services to complete the work (e.g. meetings, communicating with you and others, carrying out research, writing letters, lodging documents and representing you in court). Second, there are expenses called ‘disbursements’, which are costs the solicitor has paid to third parties on your behalf (e.g. court filing, barrister’s fees, bank charges, travel expenses, stamp duty, courier’s fees, attendance fees to give or collect documents, photocopying fees etc.). The professional costs can be calculated in different ways including time costing, item-by-item, fixed or agreed fees, conditional fees and subscription fees. A solicitor may ask you to make a payment before they start working on your matter (see ‘Payment in advance’ below). A solicitor must not accept money for the payment of their bill until the bill has been given to you and a certain period of time has passed, as set by the Uniform Law. Time costing Most lawyers charge according to how much time they spend working on your matter. Where a lawyer agrees to charge an hourly rate (a flat fee per hour of work), they must tell you what that rate is and how they will apply it. The amount charged can depend on the seniority and experience of the lawyer (e.g. a junior lawyer may charge less per hour than a principal lawyer). An hourly rate is charged in ‘units’. Usually, each unit is six minutes. This means that a lawyer can