Legal costs agreements

When you see a lawyer, you can negotiate how much you will pay for the work they do. This is called a costs agreement.

Make sure you understand what you are agreeing to with your lawyer, and ask questions if you are not sure about anything.

To cancel a costs agreement, you have to go to the Supreme Court or the Queensland Civil and Administrative Tribunal.

If your dispute is about your lawyer’s behaviour, find out how you can make a complaint.

Types of agreement

There are 2 types of agreement:

• costs agreement—lists the fees and other expenses you must pay
• conditional cost agreement (also known as no win, no fee)—lists the fees and other expenses you will pay only if your case is successful.

There is a 5-day cooling off period for conditional cost agreements.

Conditional costs agreements

If you have a conditional (no win, no fee) costs agreement, your lawyer may charge an uplift fee. This is an extra fee you pay if your matter is successful.

Your lawyer must tell you (in writing) what the rate of any uplift fee is, and what a “successful” outcome means in your case.

The uplift fee cannot be more than 25% of the fees—that does not include any ‘hard’ costs your lawyer has to pay. Hard costs are things like fees to get documents and records, doctors’ reports, barristers’ fees etc.

Personal injury claims

If the conditional costs agreement is for a personal injury claim, your lawyer’s fees may be limited to half the amount of the settlement after refunds and hard costs are paid. This is sometimes known as the ‘50/50 rule’.

Bills over $1,500

If your legal bill is likely to be more than $1,500, your lawyer must give you a costs disclosure notice when you negotiate your costs agreement.

A costs disclosure statement explains how they will charge and their total estimated costs.

It must also tell you about your rights.

What your lawyer must tell you

For any costs agreement (where the costs are likely to be more than $1,500) your lawyer must tell you in writing:

• what the total cost is likely to be
• how costs are worked out
• when and how often you will get a bill
• the interest rate you will be charged if you don’t pay
• the person in the law firm to contact if you want to talk about costs.

Your rights

Your lawyer must also tell you (in writing) about your rights to:

• negotiate the costs agreement
• get a bill
• be told if there is a major change in a cost or fee
• get progress reports (lawyers can charge for progress reports)
• have a cost assessment if you dispute the bill and the time limits
• apply to the Supreme Court to over-rule the costs agreement.

You lawyer must tell you in writing that you have a right to ask for an itemised bill. An itemised bill sets out what work your lawyer did and what was charged for each piece of work. It must be given to you within 28 days of your request.

Disputing an agreement

Speak to your lawyer first if you think the cost agreement is unfair. If you and your lawyer can’t agree, you can apply to have the court appoint an independent person to consider your bill. This is called a costs assessment.

The court involved will depend on the amount owed on your bill:

• Supreme Court—more than $750,000
• District Court—between $150,000 and $750,000
• Magistrates Court—between $25,000 and $150,000
• Queensland Civil and Administrative Tribunal—under $25,000.

You can apply for a costs assessment by contacting your nearest courthouse. There are fees to apply for a costs assessment and the assessor that the court appoints will also charge you.

What an assessor does

The assessor will look at the disputed costs based on your costs agreement.

The cost assessor will consider whether the:

• work was required
• work was carried out in a reasonable way
• costs were fair and reasonable.

The assessor will also want to know if the lawyer gave you a realistic estimate of the costs and told you about any major changes.

Other legal fees

You may have to pay other legal costs as part of the assessment.

As a general rule, if the costs are reduced by more than 15%, the lawyer has to pay those costs.

If the costs are reduced by less than 15%, you will have to pay those costs. These costs can be very expensive.

Ending a costs agreement

You can apply to the court or the Queensland Civil and Administrative Tribunal to end a costs agreement.

Independent legal advice is recommended if you decide to do this.