Costs disclosure FAQ

Lawyers must provide a single figure estimate of the total legal costs payable in the matter and the basis on which costs will be charged in writing.

Where the total legal costs in a matter are likely to be between $750 and $3,000, lawyers may use the standard form of costs disclosure.

The standard form of costs disclosure can be found in Schedule 1 of the Legal Profession Uniform General Rules 2015. The Uniform Law costs disclosure forms can be found on the Legal Services Council website.

Written costs disclosure is required as soon as possible after a lawyer is briefed about a matter. Where the total legal costs in a matter are not likely to exceed $750, written disclosure may be given, but is not required. As soon as it is expected that costs will exceed $750 then written disclosure is required.

A lawyer may choose to provide a client with the standard form or with full costs disclosure regardless of the expected costs. It is still best practice, and the best way to avoid misunderstandings, to inform your client of the costs you will be charging them and how you will be charging those costs prior to commencing work.

Costs disclosure is not required to be given to a commercial or government client.

Disclosure must be made in writing either before the law practice is retained, or as soon as practicable thereafter, to avoid any unwelcome surprises for the client.

Section 174 of the Uniform Law sets out a number of clients’ rights that must be disclosed, including the right to:

• negotiate a costs agreement
• negotiate a billing method
• receive a bill and to request an itemised bill
• seek the assistance of the Legal Practice Board in the event of a dispute about legal costs.

Estimates of costs under the Uniform Law cannot be within a range of likely costs, but must be provided as a single figure, excluding GST and disbursements.

Setting out standard parameters and stages in a matter will help the client understand the legal process, the scope of work and the likely cost at each stage, as required by Uniform Law. Non-standard items or complications can be discussed and the likely costs and benefits of continuing with the matter, along with the potential final cost.

Lawyers are required to give the client updated written costs disclosure as soon as practicable after there are any changes to the matter. This is an obligation for the first, and any subsequent, instances of change, and is simple to comply with.

Updated and ongoing disclosure should be made as soon as it is apparent that the events or costs associated with initial costs disclosure have been reached or concluded.

In such matters, lawyers must disclose their own professional fees and all other potential costs that the client may incur, for example disbursements and another party’s costs. This disclosure must always be signed by the client, should clearly define a successful outcome, and must be in plain English with a cooling-off period.

Clear and transparent communication is at the core of costs disclosure. A ‘no surprises’ approach is best, giving the client clear advance notice how they will be charged. Further, a warning when costs are exceeding previous estimates and fresh instructions are sought as complications occur or costs increase.

A law practice is not required to enter into a costs agreement, but is required to meet their costs disclosure obligations to their client.

Failure to meet the costs disclosure obligations or a contravention of the costs disclosure obligations may render any associated costs agreements void.

A void costs agreement does not affect the right of a law practice or lawyer to the payment of fees accrued while acting on lawful instructions from the client. It does mean that the client or an associated third party payer is not required to pay the legal costs until they have been assessed or any costs dispute has been determined.

Where a costs agreement is deemed void due to a failure by a law practice or lawyer to disclose or to meet disclosure obligations, it is important to note the effect of Rule 72A in the Legal Profession Uniform General Rules 2015.

Rule 72A provides that a costs dispute by the Board or a costs assessment by the Supreme Court of WA, may also determine that the costs agreement is still valid in the case where:

• the law practice took reasonable steps to comply with the disclosure obligations of the Uniform Law before becoming aware of the contravention
• the law practice, no later than 14 days after the date on which it became aware of the contravention, rectified the contravention, by providing the client with the necessary information required to be disclosed under the Uniform Law
• where the contravention was not substantial and where it would not be reasonable to expect that the client would have made a different decision.