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December 8, 2014 By Louise Mathias

Do solicitors need to disclose a barristers cost/fee agreement to the client?

After having some very unpleasant and unprofessional experiences in relation to the payment of my fees, I wondered how many other Solicitors brief and pay Barristers according to their own “rules” and not according to the Solicitors professional ethical obligations found in the Legal Profession Act 2004 (NSW) or the NSW Professional Conduct and Practice Rules 2013 (“Solicitors Rules”)? Do you know what are solicitors ethical obligations in respect to Barristers?

Briefly, what are Solicitors ethical obligations to clients and Barristers as respects Barristers costs/fees and disclosure to the client?

Rule 35.1 Solicitors Rules 2013 states:

35.1 If a solicitor instructs a third party (i.e. Barrister)  on behalf of the client, and the solicitor is not intending to accept personal liability for payment of the third party’s fees, the solicitor must advise the third party (i.e. Barrister) in advance.

Section 326 LPA states that a cost agreement may be enforced as any other contract. Therefore, any solicitor who disregards or ignores a Barristers cost/fee agreement and does not disclose to the client, may be responsible for the Barristers fees, pursuant to the cost agreement, from their own funds, as the “contract” is between the Solicitor and the Barrister unless the Solicitor has informed the Barrister of his/her intention to not accept personal responsibility (r35.1).

The Legal Profession Act 2004 (NSW) (“LPA”) Chapter 3, Division 3.2 provides solicitors with their ethical obligations for cost disclosure in respect to their own fees and third party (Barrister fees).

In particular, section 310 LPA outlines disclosure is necessary if another law practice (i.e. Barrister) is to be retained. A Solicitor must disclose (as a minimum) to the client, pursuant to s 309 (a, c and d) in relation to the other law practice (Barrister):

  • The basis on which legal costs will be calculated
  • An estimate of the total legal costs if reasonably practicable, if not reasonably practicable a range of estimates with an explanation of the major variables that will effect the calculation of these costs
  • Details of the intervals at which the client will be billed

The consequences for failure to disclose (section 317 LPA) may  result in disciplinary action, if found to be in breach of a Solicitors professional obligations, which will create much bigger problems than compliance at the beginning not to mention a tarnished reputation that will be hard to improve upon.

It is imperative that Solicitors are aware of their ethical obligations found in the Legal Profession Act 2004 (NSW) and the Solicitors Rules 2013 and comply with those obligations when disclosing Counsel fees to clients and payment of Counsel fees according to the “contract terms” of the cost/fee agreement. This will result in professional and smooth relationships for solicitors and barristers, so that everyone knows and understands their position at the outset.

If you would like more helpful hints, sign up for my fortnightly blog on www.sydneybarrister.net.au or contact me at Elizabeth Street Chambers on (02) 9336 5399

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Filed Under: Blog, Criminal Law (Local Court), Family Law (Parenting and Property), Personal Injury + Medical Negligence, Wills and Probate (including Family Provisions) Tagged With: Ethics

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