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Alexander, Phillipa --- "Requests for itemised bills of costs" [2015] PrecedentAULA 14; (2015) 126 Precedent 52


REQUESTS FOR ITEMISED BILLS OF COSTS

By Phillipa Alexander

An increasing number of clients who have received lump sum bills are exercising their rights under s332A of the Legal Profession Act 2004 (NSW) (LPA) to request their solicitors provide them with itemised bills of costs.

Sub-sections 332A(1) and (2) of the LPA provide:

‘(1) If a bill is given by a law practice in the form of a lump sum bill, any person who is entitled to apply for an assessment of the legal costs to which the bill relates may request the law practice to give the person an itemised bill.

(2) The law practice must comply with the request within 21 days after the date on which the request is made.’

This entitlement will be retained in the Legal Profession Uniform Law (NSW) (LPUL) which is to take effect in 2015. As part of a law practice's disclosure obligations under s174 of the LPUL, the law practice must include information about the client's rights to receive a bill from the law practice and to request an itemised bill after receiving a bill that is 'not itemised or is only partially itemised'. This appears to be more expansive than a 'lump sum bill'. However, sub-section 187(1) of the LPUL somewhat inconsistently uses the term 'lump sum bill' and provides:

‘(1) If a bill is given by a law practice in the form of a lump sum bill, any person who is entitled to apply for an assessment of the legal costs to which the bill relates may request the law practice to give the person an itemised bill.’

Section 186 of the LPUL does provide that a bill may be in the form of a lump sum bill or an itemised bill so arguably anything less than an itemised bill containing the prescribed information must be regarded as a lump sum bill, taking into account the wording of the disclosure obligation under s174.

WHO IS ENTITLED TO MAKE THE REQUEST?

Section 332A of the LPA and s187 of the LPUL entitle any person who is entitled to apply for an assessment of the legal costs to which the bill relates to request an itemised bill. This includes clients, associated third party payers and non-associated third party payers.

In Jeray v Blue Mountains City Council,[1] the Court of Appeal considered whether an opposing party against whom costs orders had been made was entitled to make a request under s332A for an itemised bill to be provided by the costs applicant's solicitors. The Court of Appeal did not decide the issue, but Hodgson JA did observe that 'it does seem to be possibly arguable that s353 of the LPA which makes the applicant a person entitled to apply for assessment of legal costs may give him standing to make a request under s332A’.'[2]

In Dawn Wade & Anor v Reynolds & Company Pty Limited & Ors,[3] the Court also examined whether plaintiffs against whom a costs order had been made could request an itemised bill of costs following receipt of a letter advising of the costs incurred by the defendants. The Court was not satisfied that the letter constituted a 'lump sum bill' and held that, in the circumstances, the plaintiffs had not made good their assumption that s332A of the LPA was applicable.

TIMING OF REQUEST

In Firth v Yang,[4] the Court of Appeal refused to set aside the decision of Hall J in Yang v Stephen Paul Firth trading as Firths The Compensation Lawyers[5] in which Hall J had ordered, under s728(1)(a) of the LPA, that the solicitor give to Mr Yang a bill of costs in itemised form even though the 12-month period to apply for assessment had expired. The Court of Appeal did not determine the question of whether the 12-month time limit in s350 of the LPA to apply for assessment restricts the right given by s332A; the issue being hypothetical as the itemised bill had already been provided to the client by that time. However, the Court did indicate it was a matter for argument and a relevant question as to whether the time limitation in s350 does restrict the right given by s332A.

Hall J also ordered an itemised bill be provided by the solicitor to the client in Brown v Stephen Paul Firth trading as Firths The Compensation Lawyers,[6] where the 12-month period to apply for assessment had already expired.

On its face, s187 of the LPUL may resolve this issue as sub-section 187(2) provides:

‘A request for an itemised bill must be made within 30 days after the date on which the legal costs become payable.’

However, I can foresee issues arising in relation to 'the date on which the legal costs become payable', because where a law practice contravenes the disclosure obligations of Part 4.3 of the LPUL, s178 provides that the client is not required to pay the legal costs until they have been assessed or any costs dispute has been determined by the designated local regulatory authority. This means that in cases of non-compliance with disclosure, a client would be able to request an itemised bill well outside the 30-day period referred to in s187(2) of the LPUL.

TIME FOR COMPLIANCE

Both s332A(2)of the LPA and s187(3) of the LPUL provide that the law practice must comply with the request within 21 days after the date on which the request is made. In Council of the Law Society of NSW v Pizzinga[7] the Tribunal held, within the context of other breaches of the LPA, that the failure to provide an itemised bill of costs within 21 days of the request amounted to unsatisfactory professional conduct.

CONTENTS OF ITEMISED BILL

Clause 111B of the Legal Profession Regulation 2005 specifies the particulars to be included in an itemised bill given by a law practice or a barrister. The particulars must generally be set out in chronological order.

A law practice is required to provide:

(a) short details of each item of work carried out on behalf of the client, including the method by which it was carried out (whether by letter, telephone, perusal, drafting, conference, teleconference or otherwise) if not otherwise apparent;

(b) the date on which each item of work was carried out;

(c) except so far as paragraph (d) applies, the amount charged for carrying out each item of work, and particulars:

(i) of the time (in minutes or other units of time) engaged for carrying out each item or work; and

(ii) identifying the person who carried out each item of work; and

(d) if applicable, the amount charged for carrying out each item of work on some other basis on which work has agreed to be charged, and particulars of that agreed basis.

A barrister is required to provide:

(a) short details of each item of work carried out on behalf of the client, including the method by which it was carried out (whether by letter, telephone, perusal, drafting, conference, teleconference or otherwise) if not otherwise apparent;

(b) the date on which each item of work was carried out; and

(c) the amount charged for each item of work or for items of work carried out on a particular day, and particulars of the basis for calculating the amount charged.

Practitioners should ensure that their recording of work undertaken in the matter is sufficient to enable the above particulars to be provided to a client if an itemised bill is required.

Phillipa Alexander is a specialist in legal costs with Costs Partners. PHONE (02) 9006 1033 EMAIL Phillipa@costspartners.com.au.


[1] [2009] NSWCA 415 (14 December 2009).

[2] Ibid at [6].

[3] [2011] NSWSC 1311 (1 November 2011).

[4] [2014] NSWCA 92 (31 March 2014).

[5] [2013] NSWSC 676 (30 May 2013).

[6] [2013] NSWSC 677 (30 May 2013)

[7] [2012] NSWADT 211 (16 October 2012).


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