Legal Profession Uniform Law Flashcards
(21 cards)
170 Commercial or government clients - legal costs
This Part does not apply to—
- a COMMERCIAL OR GOVERNMENT client; or
- a THIRD PARTY PAYER who would be a commercial or government if they were a client of the law practice concerned.
171 A person is a third party payer, in relation to a client of a law practice, if the person is not the client and—
o is under a legal obligation to pay all or any part of the legal costs for legal services provided to the client; or
o has already paid all or a part of those legal costs under such an obligation
172 Legal costs must be fair and reasonable
(1) A law practice must, in charging legal costs, charge costs that are no more than FAIR AND REASONABLE in all the circumstances and that in particular are—
- PROPORTIONATELY AND REASONABLY INCURRED; and
- PROPORTIONATE AND REASONABLE IN AMOUNT.
(4) A COSTS AGREEMENT is PRIMA FACIE EVIDENCE that legal costs disclosed in the agreement are fair and reasonable if—
- the provisions of Division 3 relating to COSTS DISCLOSURE have been complied with; and
- The costs agreement does not contravene, and was not entered into in contravention of, any provision of Division 4 (COSTS AGREEMENTS)
173 Avoidance of increased legal costs
A law practice must not act in a way that unnecessarily results in increased legal costs payable by a client, and in particular must ACT REASONABLY TO AVOID UNNECESSARY DELAY resulting in increased legal costs.
174 Disclosure obligations of law practice regarding clients - (1) Main disclosure requirement
A law practice must:
a) WHEN INSTRUCTIONS ARE INITIALLY GIVEN in a matter (or as soon as practicable after), provide the client with information disclosing the BASIS ON WHICH COSTS WILL BE CALCULATED in the matter AND an ESTIMATE of the total legal costs; AND
b) when or as soon as practicable after there is ANY SIGNIFICANT CHANGE to anything previously disclosed, inform the client of the change, including any significant change to the legal costs that will be payable by the client—
together with the information referred to in ss (2).
(2) Additional information to be provided
Information provided under sS (1)(a) (initial costs disclosure) must include information about the CLIENT’S RIGHTS to—
(i) NEGOTIATE A COSTS AGREEMENT with the law practice; and
(ii) NEGOTIATE THE BILLING METHOD (for example, by reference to timing or task);
(iii) 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; and
(iv) contact the LSC in case of a DISPUTE about legal costs.
174 Disclosure obligations of law practice regarding clients - (3) Client’s consent and understanding
If a costs disclosure is made, the law practice must take ALL REASONABLE STEPS to satisfy itself that the CLIENT HAS UNDERSTOOD AND GIVEN CONSENT to:
- the PROPOSED COURSE OF ACTION for the conduct of the matter AND
- the PROPOSED COSTS.
174 Disclosure obligations of law practice regarding clients - (6) Disclosure to be written
A disclosure under this section must be made in writing, but the requirement for writing does not affect the law practice’s obligations to satisfy itself that client understood and consents to a) course of action and b) costs.
177 Disclosure obligations regarding settlement of litigious matters
(1) If a law practice negotiates the SETTLEMENT of a litigious matter on behalf of a client, the law practice must DISCLOSE to the client, BEFORE the settlement is executed—
- a REASONABLE ESTIMATE of the amount of legal costs payable by the client IF THE MATTER IS SETTLED (including any legal costs of another party that the client is to pay); AND
- a reasonable estimate of any contributions towards those costs likely to be received from another party.
(2) A law practice retained on behalf of a client by another law practice is not required to make a settlement disclosure to the client, if the other law practice does so before the settlement is executed.
175 Disclosure obligations if another law practice is to be retained - PETSELIS V TATARKA
(1) If a law practice (the FIRST LAW PRACTICE) intends to retain another law practice (the SECOND LAW PRACTICE) on behalf of a client, the FIRST LAW PRACTICE MUST DISCLOSE THE COSTS OF THE SECOND LAW PRACTICE TO THE CLIENT as per s 174(1) (basis on which costs charged / estimate of total etc).
(2) If a law practice (the FIRST LAW PRACTICE) retains or intends to retain another law practice (the SECOND LAW PRACTICE) on behalf of a client, the SECOND LAW PRACTICE IS NOT REQUIRED TO MAKE A DISCLOSURE TO THE CLIENT under s 174, BUT must DISCLOSE TO THE FIRST LAW PRACTICE the information necessary for the first law practice to comply with ss (1).
(3) This section does not apply if the first law practice ceases to act for the client in the matter when the second law practice is retained.
178 Non-compliance with disclosure obligations - PETSELIS V TATARKA
(1) If a law practice contravenes the disclosure obligations of this Part—
- the COSTS AGREEMENT CONCERNED (if any) is VOID; and
- the CLIENT or an associated third party payer is NOT REQUIRED TO PAY the legal costs UNTIL ASSESSED BY THE LSC (or any costs dispute has been determined); and
- the law practice must NOT COMMENCE PROCEEDINGS for the recovery of costs until they have been assessed or any costs dispute has been determined by the designated local regulatory authority or under jurisdictional legislation; and
- the contravention is capable of constituting UNSATISFACTORY PROFESSIONAL CONDUCT or PROFESSIONAL MISCONDUCT on the part of any principal of the law practice or any legal practitioner involved in the contravention.
179 Client’s right to costs agreement
A client of a law practice has the right to a negotiated costs agreement with the practice.
180 Making costs agreements
(1) A costs agreement may be made—
- between a CLIENT and a FIRST LAW PRACTICE retained by the client; or
- between a CLIENT and a SECOND LAW PRACTICE retained on behalf of the client by a first law practice; or
- between a FIRST LAW PRACTICE and a SECOND LAW PRACTICE retained on behalf of a client; or
- between a law practice and an associated third party payer.
(2) A costs agreement MUST BE WRITTEN or evidenced in writing.
(3) A costs agreement may consist of a WRITTEN OFFER that is ACCEPTED in writing or (except in the case of a conditional costs agreement) BY OTHER CONDUCT.
(4) A costs agreement cannot provide that the legal costs to which it relates are not subject to a costs assessment.
181 Conditional costs agreements
(1) A costs agreement (a conditional costs agreement) may provide that the payment of some or all of the legal costs is CONDITIONAL ON THE SUCCESSFUL OUTCOME of the matter to which those costs relate.
(2) A conditional costs agreement must—
- be in writing and in PLAIN LANGUAGE; and
- set out the CIRCUMSTANCES THAT CONSTITUTE THE SUCCESSFUL OUTCOME of the matter.
(3) A conditional costs agreement must—
- be SIGNED by the client; and
- include a statement that the client has been informed of the client’s rights to seek independent legal advice before entering into the agreement.
(4) A conditional costs agreement must contain a COOLING-OFF PERIOD of not less than 5 clear business days (this does not apply where the agreement is between law practices only).
A contravention of this section is capable of constituting unsatisfactory professional conduct or professional misconduct
182 Conditional costs agreements involving uplift fees
(1) A conditional costs agreement may provide for the payment of an uplift fee.
(2) If a conditional costs agreement relates to a litigious matter—
- the agreement must NOT provide for payment of an uplift fee unless the law practice has a REASONABLE BELIEF that a SUCCESSFUL outcome of the matter is reasonably likely; and
- the uplift fee MUST NOT EXCEED 25% of the legal costs (excluding disbursements) otherwise payable.
A contravention of this section is capable of constituting unsatisfactory professional conduct or professional misconduct
183 Contingency fees are prohibited
(1) A law practice must NOT enter into a costs agreement under which the amount payable to the law practice, or any part of that amount, is calculated by reference to the amount of any award or settlement or the value of any property that may be recovered in any proceedings to which the agreement relates.
A contravention of this section is capable of constituting unsatisfactory professional conduct or professional misconduct
184 Effect of costs agreement
Subject to the LPUL, a costs agreement may be enforced as with any other contract.
185 Certain costs agreements are void
A costs agreement that contravenes any provision of this Division is void.
296 Unsatisfactory professional conduct
Unsatisfactory professional conduct includes conduct of a lawyer occurring in connection with the practice of law that FALLS SHORT OF THE STANDARD OF COMPETENCE AND DILIGENCE that a member of the PUBLIC is ENTITLED TO EXPECT of a REASONABLY COMPETENT LAWYER.
297 Professional misconduct
Professional misconduct includes:
(a) UNSATISFACTORY PROFESSIONAL CONDUCT of a lawyer, where the conduct involves a SUBSTANTIAL AND CONSISTENT FAILURE to reach or maintain a reasonable standard of competence and diligence; AND
(b) CONDUCT of a lawyer whether occurring in connection with the practice of law or occurring otherwise than in connection with the practice of law that would, if established, JUSTIFY A FINDING that the lawyer is NOT A FIT AND PROPER PERSON to engage in legal practice.
298 Conduct capable of constituting UPC or professional misconduct
Without limitation, the following conduct is capable of constituting UPC OR PM:
a) conduct consisting of a contravention of the LPUL;
(b) conduct consisting of a contravention of the Uniform Rules;
(d) charging more than a fair and reasonable amount for legal costs;
(e) conduct in respect of which there is a conviction for—
- a serious offence; or
- a tax offence; or
- an offence involving dishonesty;
(f) conduct as or in becoming an insolvent under administration;
(g) conduct in becoming disqualified from managing or being involved in the management of any corporation under the Corporations Act;
299 Determination by local regulatory authority—UPC
The LEGAL SERVICES COMMISSIONER may, in relation to a disciplinary matter, find that the respondent lawyer or a legal practitioner associate of the respondent law practice has engaged in UPC and make any of the following orders to the respondent:
(a) a caution;
(b) a reprimand;
(c) require an apology;
(d) REDO THE WORK that is the subject of the complaint AT NO COST or to waive or reduce the fees for the work;
(e) undertake training, education or counselling or be supervised;
(f) pay a fine of a specified amount (not exceeding $25 000) ;
(g) impose a specified condition on their practising certificate.
300 Initiation and prosecution of proceedings in designated tribunal
(1) The Legal Services Commissioner may initiate and PROSECUTE PROCEEDINGS AGAINST A RESPONDENT lawyer in VCAT if the LSC is of the opinion that—
(a) the alleged conduct may amount to UNSATISFACTORY PROFESSIONAL CONDUCT that would be more appropriately dealt with by the designated tribunal; OR
(b) the alleged conduct may amount to PROFESSIONAL MISCONDUCT.
As soon as practicable after deciding to initiate proceedings under this section, the LSC must give the complainant and the respondent to the complaint written notice of the decision.
