FAQ & Cases & Gallery

Often, the issue of the Legal Costs Consultants' charging fees arise in respect to the preparation of a Bill of Costs which is calculated on the gross profit costs amount, as opposed to the suggested nett profit costs amount (ie the total of the bill vs that part of the bill allowed at assessment).

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This needs to be addressed.

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We as with all consultants charge on the gross profit amount (disbursements and gst are always excluded). We justify this on the basis that if we draft say 100 pages of a Bill of Costs then we should be remunerated for that work and not say 70 pages that perhaps might be allowed on assessment.

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Why the discrepancy?

Why are these items not deleted at the outset?

Why not apply an hourly rate instead?

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First, the application of the standard 10% fee based upon the gross profit costs as a way of calculating the fees payable to the Legal Costs Consultant has been in effect for probably over 100 years and is entrenched in British and Australian legal costing. It is and has been regarded as a fairly reasonable method of dealing with something which can at times be vague and avoids the possibility of a surprisingly unexpected fee (charged on an hourly basis) which could proportionally outweigh the resultant professional costs that can be claimed.

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Second, many items in litigation will be judged on whether the assessment is on a solicitor/client or on a party/party basis, the latter being more restrictive. Drawing a Bill of Costs for strictly party/party purposes and missing out on the opportunity of having in one's possession a solicitor/client copy is short sighted. What if the client later complains about his/her own Bill, perhaps primarily due to its discrepancy with the party/party costs ? It is far better to have in hand a solicitor/client Bill ready to go. One cannot go back and re-enter those items already deleted.

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Third, items themselves can often be what might be called a "grey area". Many items can only be judged from observing the Bill of Costs as a whole. Some items which may seem reasonable or otherwise unreasonable on the run, can appear different later. The consultant must make the decision at that moment, better to be fully inclusive.

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Fourth and continuing this "grey area", there is the human element. This has become more evident now in the assessment regime than in the former taxations (conducted by a handful of Court Registrars). Costs Assessors (who are Barristers and Solicitors) are now more numerous, there are in fact dozens. There is thus more chance of a variety of opinion and the exercise of one's discretion. Some items might be allowed by one Costs Assessor but not by another.

 

And, believe it or not, there can be inherent bias. In the latter, we have found on occasions that cbd Barristers acting as Costs Assessors can be infinitely more generous in assessing costs (that were performed by a cbd firm) than would be found by a Solicitor acting as a Costs Assessor from say regional NSW (who may find some claims by cbd firms overly excessive). This is not improper, this is human nature.

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Fifth and more seriously, do you really wish to delete items at the outset and not fight for all of them, just to save on some consultants fees?

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Take this scenario. If you delete say 30% of a bill of 100 pages (ie 30% of your hard work), you are effectively saving 3% for a consultant's fee (on the standard 10% fee). Is it worth doing that ? Is it not better not only fighting for all 100% of your work at the outset, but also presenting the Costs Assessor with a 100 page Bill representing all of your work rather than a watered-down 70 page version. Of course it is. The Costs Assessor is going to have no idea that you have sacrificed 30% of your billable work. Do not do it.

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Of course if you are concerned about the costs of the assessment going against you, by say the Costs Assessor implementing the 15% discretionary rule, we can modify an existing Bill of Costs by preparing the full Bill and then deleting or reducing only selective charges (ie 2 bills), thus allowing the work descriptions to remain. This is much more effective and we believe a better way of presenting your Bill to the Costs Assessor (indeed we can provide the electronic draft and you can modify it yourself, exercise your own discretion, and save on our additional 1.0% fee).

 

The Costs Assessor will recognise that you have conceded numerous items and the end result will hopefully exceed substantially the added costs of the draft. Its again human nature, not some autonomous algorithm.

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Sometimes impressions really do matter.

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Remembering also that the Law Society has suggested that approximately 15% of a Solicitor's billable work is often not recorded - and thus lost forever.