Legal costs: Rights and obligations

There are almost always costs involved in any legal matter. Legal practitioners have a professional obligation to keep their clients fully informed of all the costs that might be incurred with their matter.

You can negotiate with your lawyer about legal costs. This is called a ‘costs agreement’. You can ask your lawyer if you are unsure about any aspect of the costs agreement.

You will have to pay the costs you agree to, unless a court orders otherwise.

Costs agreements

There are two types of cost agreements:-

  1. Conditional Cost Agreement:  Lists the fees and other expenses you will pay ONLY if your matter is successful. This is known as a ‘no win, no fee’ agreement.
  2. Cost Agreement:   For all other types of legal work, a costs agreement sets out the fees and expenses you must pay, no matter what the final result may be.

What is included in a costs agreement?

For any costs agreement, your lawyer must tell you in writing:-

  • how the costs are calculated (for example, whether they are based on a particular ‘scale of fees’ or similar costs table)
  • A realistic estimate of the total cost (or a number of estimates) with an explanation of the major variables that might affect the final amount
  • Your right to:-
    • negotiate the costs agreement
    • receive a bill
    • request an itemised bill
    • be notified of anything that might cause a substantial change in a cost or fee
    • receive progress reports
    • apply for a cost assessment and the time limits that apply if you dispute the bill
    • apply to the Supreme Court to over-rule the costs agreement.
    • know when and how often you will be billed.
  • the interest rate charged for overdue amounts
  • the identity of the person in the legal practice to contact to discuss costs
  • the percentage rate of any ‘uplift fee’ (conditional cost agreements only) and the reasons why this fee would be warranted.
    • An uplift fee can apply if a legal matter goes on for an extended period (usually a number of years).
    • An uplift fee must not exceed 25 percent of the costs (excluding ‘hard’ costs that the lawyer has to pay out on behalf of the client)
  • a cooling-off period of five clear days (conditional cost agreements only)
  • for litigious matters (a case that will go to a court or tribunal), the legal practice must also disclose the range of costs you may expect to recover if the matter is successful, and the range of costs you may expect to pay if the matter is unsuccessful.

Legal costs less than $1,500.00

Your lawyer does not have to give you all this information if the legal work is estimated to cost less than $1500.00 (excluding GST).

A bill usually summarises the work the lawyer has done on behalf of their client and gives the total amount charged for that work.

You have a right to receive a bill before paying for legal work.

Itemised bills

You can also ask the lawyer for a more detailed account or an itemised bill. An itemised bill sets out the work the lawyer did and the amount charged for each item of work.

Lawyers cannot charge their clients for preparing itemised bills, however, it is possible that the total amount of the bill may increase once each piece of work is itemised. Your lawyer must provide the itemised bill within 28 days of your request.

Non-payment of bills

Your lawyer can take court action against you if you don’t pay your bill. However they wait until:

  • 30 days after giving you the bill, or
  • 30 days after giving you an itemised bill, if you have requested one, or
  • after a costs assessment.

Your lawyer must also send you a notice with the bill telling you about your rights to challenge legal costs.

Legal matters in other States

Sometimes a legal matter may extend across state boundaries. In such cases your lawyer might ask for interstate costs laws to apply. You can accept or reject this request. Also, you can tell your lawyer if you want interstate costs laws to apply to your matter.

You can ask your lawyer for a written report about

(a) the progress of your case, and

(b) the legal costs you have run up in total, or since your last bill.

Your lawyer can charge for the progress reports, but is not allowed to charge for the update on legal costs.

If you have an issue or concern with your legal bill, remember to speak to your lawyer about your concerns.

If you would like to challenge the legal costs in your bill, remember that strict time limits apply. See the information on Challenging legal costs.

Usually, the law of the state or territory in which you first engaged your lawyer will be the law that will apply to any dealings you may have with your lawyer. However, the law of another state or territory may apply if your matter has a substantial connection to that state or territory, and you and your lawyer agree that law of that other state or territory will apply.

Note: This information applies to costs for legal matters dealt with in Queensland except for certain family law matters being dealt with in the Family Court. The existing rules relating to the regulation of costs in the Family Court will continue for all pending matters and ongoing matters already filed in the Court before 1 July 2008.

For a dispute between a lawyer and a client about the costs charged by the lawyer in a family law matter:

(a) for a new application commenced after 30 June 2008 or

(b) under a new agreement between the lawyer and the client entered into after 30 June 2008 or

(c) under a retainer entered into with a new lawyer after 30 June 2008

then the regulation of the legal costs relationship with your lawyer will be governed by the following information. For further information see the Family Court.