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Assessment of Solicitor’s Bill

Section 332(1) of the Legal Profession Act 2007 (Qld) (‘LPA’) provides that, 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 335(5) LPA provides that an application for costs assessment by a client must be made within 12 months after –

(a) The bill was given, or the request for payment was made, to the client or third party payer; or

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

Most solicitors issue tax invoices (bills) to their clients which are in a form which would be considered a "lump sum bill" for the purposes of the LPA. A lump sum bill is, by definition, a bill other than a lump sum bill within the meaning of Section 300 LPA.

The test for whether a bill is an itemised bill has been affirmed by Justice Applegarth in Tabtill No 2 Pty Ltd & Ors v DLA Phillips Fox (a firm) & Anor [2012] QSC 115 (‘Tabtill’) at [92]:

‘whether the information in the bill supplemented by what is subjectively known to the client enables the client with advice to take an informed decision whether or not to exercise the only right then open to him, viz, to seek taxation reasonably free from the risk of having to pay the costs of that taxation’.

The effect of Sections 332 and 335 LPA is that a client who has been given a lump sum bill is permitted to request an itemised bill provided that the client is entitled to apply for a costs assessment. This requires the request for itemisation to be made within 12 months after the bill was given. Justice Applegarth in Tabtill observed at [45]:

‘the entitlement under s 332(1) to request an itemised bill depends upon the existence of an entitlement “to apply for an assessment of the legal costs to which the bill relates”. That, in turn, directs attention to the entitlement to apply for an assessment under s 335, and the time limit contained in s 335(5).’

Further, Applegarth J held at [79] that ‘in circumstances in which I have found that there should not be an assessment of costs ordered in respect of certain items, there should not be a direction [pursuant to Rule 743C Uniform Civil Procedure Rules 1999] for the delivery of an itemised bill in respect of those items’.

The effect of this decision is that a solicitor may not need to comply with a client's request for an itemised bill in circumstances where the client has not applied for assessment of the legal costs to which the bill relates within the period of 12 months as prescribed by Section 332(1)(a) or (b) LPA.

Section 335(6) LPA allows the Court or costs assessor to deal with an Application for Assessment made out of time after considering the reasons for delay.

In the event that the client makes an Application for an Assessment of costs under Section 335(6) LPA and the Court or costs assessor exercises the discretion conferred by that Section, the client will be entitled to request that the solicitor provide an itemised bill in respect of those costs to be assessed pursuant to Section 332(1). The Court may also give directions for an itemised bill to be prepared, filed and served pursuant to Rule 743C Uniform Civil Procedure Rules 1999. If the client seeks a court order directing that the solicitor prepare, file and serve an itemised bill pursuant to Rule 743C then the client will bear the onus of demonstrating that the client has not been provided with an itemised bill in accordance with her statutory entitlement.  Applegarth J in Tabtill stated at [96]:

‘It is not unreasonable to expect an applicant for an order under r 743C to show that further information is required to decide whether or not to pursue an assessment and that such information is not currently in it or its adviser’s possession’.

If a client, at any time after receiving a bill, seeks further information and particulars about items charged in a bill it is recommended that a solicitor provide the additional information and particulars to satisfy the client's questions. Another recommended option is to invite the client to meet with the solicitor and inspect (and discuss) those items which the client has questions about (at no cost to the client). This approach may support the solicitor's position that they should not have to provide an itemised bill to the client.

In Tabtill at [85] Justice Applegarth stated:

‘[T]he preparedness of a respondent to such an application to provide such additional information, upon request, is relevant to the discretion to make a direction under r 743C. For example, if a final bill consisted of 100 pages and only a few items on one page were deficient thereby rendering the bill to be something other than an itemised bill for the purpose of the Act, then it may be an appropriate course simply to order the respondent to provide certain further information and to cure the identified deficiency, rather than produce another 100 page document.’

The decision of Justice Dowsett in Re Walsh Halligan Douglas’ Bill of Costs [1990] 1 Qd R 288 at [294] cites some factors which may be taken into consideration in determining whether a client is able to take an informed decision regarding costs assessment. Such factors include the degree of business and legal sophistication of the client; whether another firm of solicitors is also advising; and any agreement reached between the parties as to the basis for charging.

In circumstances where a client is given (or it is offered and declined by the client) an inspection of the file coupled with the advice of  another firm of solicitors (or costs assessor) it is arguable that the client would be able to make an informed decision whether or not to make an application for costs assessment. This was the position adopted by Dorney QC, DCJ in Julstar Pty Ltd v Lynch Morgan Lawyers [2012] QDC 272, where an inspection of the file by the applicant and her legal advisors was ordered so as to enable the applicants to make an informed decision about whether to seek an assessment.

It is clear from these decisions that the position regarding whether a solicitor needs to provide an itemised bill when requested to do so by a client requires careful consideration of all the circumstances of the particular client and the matter, particularly where it is arguable that the client does not have a right to seek Assessment of the solicitor's bill. 

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