The Law Handbook 2024

Chapter 2.1: Legal representation 57 charge for the full six minutes even if the piece of work took three minutes. However, this is subject to the overall costs being fair and reasonable. Item-by-item In this method of charging (also known as ‘charging on scale’), a flat fee is charged for each item of work that’s carried out (e.g. issuing a summons, preparing an affidavit, making a photocopy). These amounts are added together to make up the total amount charged. This way of charging is common in court cases. The amount that can be charged for each item is set out in a court’s scale of costs and varies according to which court your case is heard in. Fixed or agreed fees In the fixed or agreed fee method of charging, fees are based on the entire matter, or particular stages or milestones of work completed (rather than each item of work carried out). Examples include preparing a will or a property transfer, or lodging divorce applications in court. Fixed fees are becoming more common in cases involving litigation (settling a dispute in court). Depending on the legal matter, fees may be fixed by the court or by government. Fees can also be fixed by agreement between the lawyer and client, with set amounts for each stage of the matter (this is sometimes called ‘agreed pricing’ or ‘value- based costing’). Conditional fees payment schemes (including no-win, no-fee) In a conditional fees payment scheme (also known as a ‘conditional costs agreement’), you and your lawyer agree on the conditions under which you will pay your lawyer’s fees (e.g. you will pay them only if the legal action is successful). A conditional costs agreement must be in writing, and you must sign it for it to be accepted. It must also inform you of your right to seek independent legal advice before entering into the agreement. Conditional costs agreements vary between lawyers. For example, if you lose, you may pay nothing or you may only have to pay disbursements (e.g. the cost of medical reports or photocopying fees). However, you may have to pay the legal costs of the other (successful) party. Your lawyer must make sure you understand exactly what you are agreeing to. Alternatively, if the case succeeds, the conditional costs agreement may allow the lawyer to charge you up to 25 per cent more than their normal fee. It’s important to know that this doesn’t allow the lawyer to take any percentage of the money recovered in the case, only charge an extra percentage of their fees. You should also make sure that both you and your lawyer agree on what a ‘successful outcome’ means in your agreement. Subscription fees Some law firms offer subscription fees. These fees are a regular set payment, usually made monthly. Subscribers can use particular legal services within a specific scope or time period. For example, a lawyer may offer their client a set number of advice consultations per month for an agreed fee. This approach is particularly useful for clients who frequently need advice on a range of low-level legal work, such as a small business owner. For more information, see the VLSB+C website (www.lsbc. vic.gov.au/lawyers/legal-costs/innovation-pricing/ subscription-pricing) . Contingency fees and group costs orders In any matter involving court proceedings, a lawyer cannot enter into an agreement with you where the lawyer gets paid an agreed percentage of the total amount awarded to you. These fee arrangements (known as ‘contingency fees’) are not lawful in Victoria, other than in the following circumstances: The Supreme Court is able to make what are known as ‘group costs orders’ in class actions. These orders allow lawyers of plaintiffs (parties that start legal proceedings against another party) to receive a percentage of any amount recovered in the proceedings as payment for legal costs, with all class members sharing the responsibility for paying those costs. The percentage received by a plaintiff’s lawyer is set by the court and may be varied at any time during the proceedings. Payment in advance A solicitor may ask you to make a payment before providing legal services. Any advance payment you make must be paid into a trust account (an account where a lawyer keeps money on behalf of their client).