Lawcovernotes March 2020

Disputes with clients about payment of your legal costs and disbursements can sometimes lead to a civil claim for negligence against your law practice. Unfortunately, claims of this nature are not covered by your Lawcover Professional Indemnity Insurance policy unless the claim is for, or includes, payment of fees relating to barristers and experts. It is important for a solicitor to understand their obligations under the Legal Profession Uniform Law (NSW) (LPUL) in relation to costs and disbursements. Note: 1. Your client has the right to have a negotiated costs agreement with your law practice 1 2. Your disclosure of costs must be in writing. You must provide your clients with information disclosing the basis for legal cost calculations and an estimate of total legal costs 2 3. Your duty to provide written disclosure of costs is ongoing. If there is any significant change to your costs you must, as soon as practicable, provide the client with information disclosing: ^ Any changes to your previous disclosure ^ Sufficient information about the impact of that change to allow the client to make an informed decision regarding further conduct of the matter 3 . 4. You must inform your client of their rights to : ^ Negotiate a costs agreement with you ^ Negotiate the billing method ^ Receive an itemised bill ^ Seek the assistance of the NSW Legal Services Commissioner in the event of a dispute over costs 4 5. You must ensure that your client has given informed consent. You must take reasonable steps to satisfy yourself that your client has understood the information provided and given consent to the proposed course of action for the conduct of the matter and the proposed costs 5 . Is costs disclosure always required? No, cost disclosure is not required if total legal costs amount to less than $750.00 (excluding GST and disbursements) 6 . What if initial cost estimates are below $750.00 and then rise above that figure? 7 When you become aware, or ought to have reasonably become aware, that total legal costs are likely to exceed $750.00 (excluding GST and disbursements) you must disclosure that information to your client. Remember, you must monitor your costs and make continuous disclosure to your client as the situation changes. What if the costs are going to be over $750.00 but less than $3,000.00 excluding GST and disbursements? Disclosure of costs is required by either: ^ Making full disclosure as above ^ Providing the client with the uniform standard disclosure form as prescribed by the Uniform Rules As stated above, when you become aware, or ought to have reasonably become aware, that total legal costs are likely to exceed $3,000.00 (excluding GST and disbursements), then full disclosure will be required. Understandingyour cost disclosureobligations Knowing when to take appropriate steps will help prevent problems down the track. 14.