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Cost Recovery for Solicitors

Get advice on cost recovery and get your case moving on the right track.

Legal Practices, like all businesses, have to manage cash flow and getting paid. The timely payment of tax invoices is the lifeline of a Law Practice and unpaid tax invoices can be stressful and time consuming in chasing, resulting in lost time and money that could be better spent on building the practice or focusing on providing excellent service in your area of speciality.

We here at Pattison Hardman are experts in the areas of obtaining costs certificates, which can be converted into judgments via the Costs Assessment process, through the Supreme Court of NSW.

Legal Practices, unlike any other business, are in the unique, and we would suggest enviable, position, that instead of suing for their fees they, as an alternative, can have their costs “assessed”, to obtain a ruling on the amount of the costs that their client must pay in relation to tax invoices.

Suing for fees as a debt comes with a number of risks including:

  • A defence that the costs were incurred negligently, unreasonably, or were overcharged;
  • A crossclaim that the solicitor was negligent in the manner they provided the legal services (which may result in notification to your insurer);
  • A motion to strike out the whole proceedings on the basis that the solicitor breached their duty of disclosure and therefore cannot commence or maintain the proceedings until costs have been assessed, which may result in an adverse cost order;
  • An expensive hearing having a taxation before the judicial officer hearing the matter which could take days or weeks;
  • The matter being stayed whilst the matter is referred off to assessment anyway; and
  • Finally, in light of the High Court decision in Bell Lawyers Pty Ltd v Pentelow, [2019] HCA 29, if you elect to spend your own time chasing the fees and do ultimately win, any costs order in your favour may be of little worth as you may not be able to recover your own time expended on the matter.
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Cost Recovery for Solicitors Sydney

None of the above is to say that, in some instances, filing a claim and suing for outstanding legal fees is not appropriate. But we suggest that you confer with Pattison Hardman before electing such course. As a general rule the Local, District and Supreme Court have little appetite to deal with a claim for unpaid legal costs and understandably as if it proceeds to a hearing will be very time consuming. The Bell Lawyers decision also makes it less attractive to act for yourselves through such debt recovery proceedings.

In contrast to suing for a debt, Costs Assessment of solicitor’s tax invoices:

  • Is paper driven, no appearances are required;
  • The only issue before the assessor is assessing the fair and reasonable costs.
  • Compared to being bogged down in the Courts suing for unpaid tax invoices, the assessment process is fast, with guidelines suggesting assessments under $100,000 should be finalised in three months and assessments for costs over $100,000 should be finalised in six months;
  • The Costs Assessors are solicitors and barristers from private practice and as a rule they understand what amounts to fair and reasonable costs and the cut and thrust of private practice;
  • If there has been compliance with aspects of disclosure and the requirements for a costs agreement, then the costs will be assessed as against the complying costs agreement; and
  • Is considerably cheaper as a general rule than legal recovery proceedings.
How to get the best result

Like any jurisdiction, Costs Assessment has its own peculiar nuances that for the unfamiliar can result in Applications being rejected, results that can appear unfair or favour the client and costs orders made against the solicitor for the costs of the assessment. Not to mention that filing itself can be time consuming because it cannot be done online, and time can be lost when rejected at the registry only resulting in a second attempt to get the Application filed.

We take the view that your time is valuable and could be better spent focusing on what you do best and not dealing with a costs dispute about your unpaid fees. We leverage down on our hourly rates which are usually less than professional staff, have efficiency and experience in the assessment process which should result in you, the Law Practice, getting the certificate as quickly and as painlessly as possible.

Yes there will be some costs and yes the issue of a determination of the costs is but the first step to getting the money if the former client does not pay, but we here at Pattison Hardman take the approach that it is in our interest to get a result for you as quickly as possible as lawyers and their fees are our business.

Pattison Hardman can offer you a full service from taking instructions, reviewing everything from one outstanding tax invoice to managing a whole debt book of unpaid tax invoices, filing the Application for assessment, acting for you through the process, making submissions and obtaining a certificate of determination of your costs.

With ICL Lawyers, the enforcement arm of the business that specialises in issues that face legal practitioners including debt recovery and insolvency, we can register the judgment quickly, advise on appropriate enforcement proceedings and generally take steps to recover the monies the subject of the judgment.

Call us today and let us do the work we do best, and you can focus on what you do best. We don’t charge for a quick discussion about our services.

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