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  • Cited by 1
  • Print publication year: 2018
  • Online publication date: April 2019

8 - Lawyers’ Fees and Costs: Billing and Over-Charging

Summary

Introduction

Legal fees and access to justice

Clients are more likely to complain about their lawyers’ fees and costs than any other issue, and even the most conscientious lawyers have trouble explaining fees to clients and controlling their growth. Successful lawyers are effective in managing the communication process so that costs are paid on time, but that communication has many elements and some common pitfalls. Typical complaints include that the lawyer has failed to make proper disclosure of likely costs at the commencement of the matter, failed to provide a written bill, failed to provide an itemised bill when requested by the client, failed to provide an updated estimate, or has charged for the preparation of an itemised bill (even though clients have a right to request one). Deliberate ‘gross’ over-charging also features prominently among client complaints, as does the withdrawal of costs from a client's trust account without their permission, or the deduction of fees in the absence of a proper bill. In all these matters, small individual clients are especially vulnerable. Corporate clients are in a better position to complain effectively about costs because of their greater capacity to deny ongoing work to a lawyer who is seen to be price-gouging. Not surprisingly, clients complain about lawyers who have the temerity to charge costs for litigated matters that amount to more than the amount actually recovered in the litigation. Also featuring prominently among client complaints about lawyers are complaints about excessive hourly billing rates and exploitation of ‘no-win, no-fee’ agreements. There is considerable potential for clients to think that ‘no-win, no-fee’ means exactly that, whereas it is clear that a client's disbursements (out of pocket expenses) and, as we outline below in the section ‘Fees and costs in litigation’, the reasonable legal costs of the other party will generally be paid by a losing client. Clients routinely complain that they have been promised that they will incur no fees unless they win, but find themselves losing and either having to pay the costs of the other side or disagreeing with their lawyer about whether there has been a ‘win’.

One Queensland lawyer was suspended for 12 months for gross over-charging for billing a ‘no-win, no-fee’ client $300 per hour plus a premium of 25% for all work done by any employee of the firm, from partner to paralegal to secretary.