Itemisation and Assessment of a Barrister’s Fee Note

Some members in private practice who attended the recent annual conference of the Association may have been struck by the fact that their fee notes or memoranda were susceptible to assessment.

Such reality:

• militates in favour of barristers furnishing reasonably generous detail in their fee notes. Doing so maximises the prospect of such fee note being characterised as an “itemised bill” as opposed to a “lump sum bill” under the Legal Profession Act 2007 (Qld).
• underscores the need to eschew any exclusion of a right of assessment in a member’s costs agreement with the retaining solicitor.

While the PowerPoint for the conference session addressing the issue (“How to make your fees as recoverable as possible”) is available on Barweb, no written paper was produced. The point of this note is to summarise the issues for the information of conference delegates and other members.

Assessment:

Pivotal in what follows is the proposition that, for the purpose of the 2007 Act, a barrister, like a sole practitioner or firm of solicitors, is a “law practice”: see schedule 2 dictionary. That is because he or she is:

an Australian legal practitioner who is a sole practitioner …

The briefing solicitor’s right to insist on assessment is provided for in s 336:

336 Application for costs assessment by law practice retaining another law practice

(1) A law practice that retains another law practice to act on behalf of a client may apply for an assessment of the whole or any part of the legal costs.

(2) If any legal costs have been paid without a bill, the law practice may nevertheless apply for the costs assessment.

(3) The costs application may be made even if the legal costs have been wholly or partly paid.

(4) The costs application must be made within 60 days after—

(a) the bill was given or the request for payment was made;

or

(b) the costs were paid if neither a bill was given nor a request was made.

(5) A costs application can not be made if there is a costs agreement between the client and the other law practice.

(6) Subject to this section, the costs application under subsection

(1) must be made in the way provided under the Uniform Civil Procedure Rules.

(my emphasis)

Several points ought be noted about this provision:

• the distinction between the retaining “law practice” (the solicitor), the “other law practice” (the barrister) and the “client” respectively.
• assessment is precluded only in the instance of a costs agreement between the client and the barrister, not between the solicitor and the barrister.
• in subs (2) and (3), the assessment may be sought whether or not the relevant fee note has been paid.
• the application must be made within 60 days of issue of the fee note or request for payment.

In addition, under s 339, a barrister may be drawn into an assessment between a solicitor and a client:

339 Persons to be notified of application

(1) The applicant for a costs assessment must, under the Uniform Civil Procedure Rules, give notice of the costs application to any other person the applicant knows is 1 of the following—

(a) a law practice to whom the legal costs have been paid or are payable;

(b) the law practice that retained a law practice to whom the legal costs have been paid or are payable;

(c) the client;

(d) a third party payer.

(2) A person given notice of the costs application under

subsection (1)—

(a) is entitled to participate in the costs assessment process;

and

(b) is taken to be a party to the assessment; and

(c) if the costs assessor so decides, is bound by the assessment.

(my emphasis)

Several points ought be noted about this provision:

• a solicitor or client applicant for assessment inter se, arguably, “must” can give notice to a barrister on the basis that he or she is:

… a law practice to whom the legal costs [in the sense of some of the costs the subject of assessment] have been paid or are payable.

(my parenthesis)

• the barrister may participate in the assessment.
• the barrister is bound by the assessment, necessarily to the extent of his or her fees the subject of a fee note or notes, but only:

… if the cost assessor so decides.

Solicitor and expert cost assessor Mr Paul Garrett (one of the panel at the conference, otherwise made up by solicitors Mr Peter Eardley and Mr Justin McDonnell) made the point that a barrister was unlikely to confront the prospect of any or a successful assessment, or challenge to an issued fee note, if a valid and comprehensive costs agreement was entered into and fee notes were adequately particularised.

Itemised or lump sum fee notes

Section 329(1) provides that “a law practice” must not start a legal proceeding to recover costs until 30 days after the law practice:

… has given a bill to the person under ss 330 and 331 …

Section 329(4) provides that such obligation ensues:

… whether or not the legal costs are the subject of a costs agreement.

Section 331 requires a notification to accompany the bill advising on the right of assessment. But this only touches the case of a bill being given to a “client” not a briefing “legal practice” (see below).

Sections 330 and 332, relevantly, provide:

330 Bills

(1) A bill may be in the form of a lump sum bill or an itemised bill.

(2) A bill must be signed on behalf of a law practice by an Australian legal practitioner or an employee of the law practice.

…

332 Request for itemised bill

(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.

Note—

A bill in the form of a lump sum bill includes a bill other than an itemised bill.

(2) The law practice must comply with the request within 28 days

after the date on which the request is made.

…

(4) Subject to subsection (5), a law practice must not commence legal proceedings to recover legal costs from a person who has been given a lump sum bill until at least 30 days after the date on which the person is given the bill.

…

(my emphasis)

Several points ought be noted about these two provisions:

• unquestionably s 332 applies to a barrister.
• a barrister ought ensure that his or her fee note (namely “bill”) is sufficiently punctuated by detail to transmute it from a “lump sum bill” to an “itemised bill”.
• the time limit of 28 days unless, of course, the barrister is confident the original fee note was “itemised” If so, reply to that effect.

Itemised examples:

No doubt every case turns on its own facts.

Sometimes a senior well-regarded silk’s fee note noting simply “opinion on liability” may suffice. At the other end of the spectrum a like sparing fee note by a junior barrister may be apt where the brief is marked or delivered under the aegis of dedicated government or insurer scale.

Outside these circumstances, at the conference Justin McDonnell gave a number of examples of what he considered was apt itemisation of fees otherwise struck by reference to hourly or daily rates.

In respect of Justin’s examples essayed below, those accompanied by italics are actual fee notes to which Justin added in italics the itemisation he thought apt:

• To reading (volumes 1-6 of brief, particularly the client file documents which comprise 4 lever arch folders) (7 hours);
• Preparation for and conference (1 day):

— preparing for conference with Mr [X] of instructing solicitors and Mr [Y], a witness in the matter, including drafting a series of questions (2 hours);

— attending to meeting Mr [X] and Mr [Y] in conference and drafting Mr [Y] witness statements from our conference (6 hours);

• To settling opinion:

— on prospects for success for defendant, including review of pleadings and all disclosed documents (6 lever arch) and attending to research on relevant termination issues (2 hours) and;

— editing proposed opinion (2 hours);

• Telephone attendance upon instructing solicitor re advising on Minister’s consent (30 mins);
• Telephone conference with instructing solicitor and client to obtain instructions for preparation of pleading (2 hours).

Granted many barristers presently furnish this measure of detail, but a reminder is apt.

Costs agreements:

I propose to canvass this issue only to the extent that it is impacted by a right of assessment.

Section 322, relevantly, provides:

322 Making costs agreements

(1) A costs agreement may be made between—

…

(c) a law practice and another law practice that retained that law practice on behalf of a client; or

(2) The costs agreement must be written or evidenced in writing.

…

(4) The offer must clearly state—

(a) that it is an offer to enter into a costs agreement; and

(b) that the offer can be accepted in writing or by other conduct; and

(c) the type of conduct that will constitute acceptance.

(5) Except as provided by section 344, a costs agreement cannot provide that the legal costs to which it relates are not subject to costs assessment under division 7.

Note—

Under section 327(1), if a costs agreement attempts to provide that the legal costs are not subject to a costs assessment, the costs agreement will be void.

(my emphasis)

As to subsection (5), the exception takes one to ss 344, and in turn ss 300 and 311(1)(c). Those matters identify the case of a “sophisticated legal client” (my emphasis).

The better view is that such exception has no application where one “law practice” (a solicitor) briefs “another law practice” (a barrister). In such circumstance the solicitor is not a “client” of the barrister, “sophisticated” or otherwise. Rather such “client” is the person for whom the solicitor is acting, and in respect of whose affairs the solicitor has briefed the barrister.

In consequence under s 327(1) a costs agreement will be vitiated, not in part but in whole in the event it purports, directly or indirectly, to exclude a right of assessment.

Conclusion:

No doubt at this point of reading this note, a member barrister is depressed at the notion that he or she may be taken to task as to due itemisation of a fee note to a briefing solicitor, and perhaps being drawn into an assessment.

Be that as it may, Mr Garrett’s words at the conference were salutary: with a sensible yet thoroughly drafted costs agreement, coupled with informative descent to detail in fee notes, a barrister ought have nothing to worry about.

The Association’s private list operates in parallel to the above statutory scheme.

Under the private list protocol, if a fee note remains unpaid for more than 60 days then the errant solicitor may be placed on the list. The member barrister may still pursue recovery by legal proceeding.

Richard Douglas S.C.