How To Dispute Legal Fees In Australia

Clients often question their legal fees when they believe their lawyer has billed them excessively. This concern is particularly relevant for businesses and individuals involved in high-value legal matters, such as commercial and family law, especially in high-stakes divorce scenarios.

At Law in Check, our extensive experience in legal costing and our affiliations with major legal costing firms in Australia means we have the experience and expertise to guide you through these legal challenges.

Situations Where Disputing Legal Fees is Applicable

The following scenarios highlight the importance of understanding and challenging legal fees.

• Commercial Contract Disputes: Businesses in a legal altercation over a significant contract may find the fees disproportionate to the legal work done.
• Property Settlement in Divorce: During high-value divorces, especially where substantial assets are involved, legal fees may be disputed if they seem unjustified considering the case's complexity.
• Business Partnership Dissolutions: Legal fees can be contested if they appear excessive in relation to the legal assistance provided during the dissolution of a business partnership.
• Trademark Litigation: When defending or challenging a trademark in court, the legal fees may sometimes exceed the norm, prompting a dispute.
• Defending Against Unfair Dismissal Claims: Businesses facing legal action from former employees might challenge legal costs if they seem unreasonable.

Benefits of Disputing Lawyer Fees

Challenging legal fees safeguards your financial interests and ensures greater fairness and transparency in the legal process. There are five important benefits to disputing your legal fees, as follows.

• Financial Adjustment: Clients can achieve significant financial benefits when they dispute legal fees. This process may lead to a refund or a substantial reduction in the fees originally charged, ensuring that clients pay only what is fair and reasonable for the legal services they receive.
• Billing Clarity: A dispute over legal fees often leads to a deeper understanding of the billing process for clients. They become more informed about how legal fees are calculated and what services they include, empowering them to scrutinise and comprehend their legal bills more effectively.
• Financial Planning: Disputing legal fees plays an important role in financial management because it assists clients in planning and budgeting for legal expenses. Understanding and potentially reducing legal costs allows clients to allocate their resources more efficiently, ensuring better financial control and planning in legal matters.
• Enhanced Communication: Disputing legal fees often fosters improved communication between clients and lawyers. It encourages open and transparent discussions about billing practices and legal services provided. This enhanced dialogue helps build trust and understanding, leading to a more collaborative client-lawyer relationship.
• Ethical Accountability: Challenging legal fees serves as a mechanism to ensure that lawyers adhere to ethical billing standards. It promotes a culture of accountability and transparency within the legal profession. Lawyers must justify their fees, aligning their billing practices with ethical and professional standards.

Steps to Dispute Legal Fees

In Australia, the process of disputing legal fees involves both common and state-specific steps. While initial approaches, such as negotiations with legal counsel, are consistent nationwide, the specific legal protocols differ in Victoria, New South Wales, and Queensland.

Steps for Disputing Legal Fees Common Across All States and Territories

• Negotiation: The first step in disputing legal fees is to initiate a discussion with your former lawyer. This negotiation aims to reach a mutual agreement on a reasonable total amount for the legal services provided. It's an opportunity for clients to express their concerns about the fees and seek a resolution reflecting the value and complexity of the legal work.
• Review Billing Basis: This step thoroughly examines how the legal fees were calculated. Clients should consider whether the costs must be recalculated, especially if they differ significantly from the lawyer's initial charges. In cases where the billing details are unclear or seem unjustified, requesting a more itemised bill is advisable. This detailed breakdown can provide better insight into the services charged and facilitate a more informed discussion about the fees.

State-Specific Procedures for Legal Fee Disputes

Victoria (VIC):

• Summons for Taxation: You must initiate the process by filing a summons for taxation in the Supreme Court's Costs Court division, starting the formal legal procedure to challenge the legal fees charged.
• Directions Hearing: Attend a hearing to outline further steps, including possibly holding a preliminary hearing and inspecting the solicitor's file, providing an opportunity to gather more evidence.
• Formal Objection and Mediation: Formally dispute the invoices and engage in a Court-appointed mediation to resolve the fee dispute through a facilitated negotiation process.
• Assessment and Taxation Hearing: If unresolved in mediation, the matter progresses to a detailed assessment in chambers and potentially a taxation hearing, where a judicial officer reviews the fees.
• Court Orders for Fees: The process culminates with the Court issuing orders that detail the adjusted legal fees or refunds due, finalising the disputed amount.

New South Wales (NSW):

• File Inspection: After initial negotiations, inspect the solicitor’s file if necessary to understand the basis of the fees charged.
• Invoice Objection and Review: Clients should formally object to the invoices and critically review any responses provided by the solicitor, ensuring all charges are justified.
• Cost Assessment Application: Involves applying a cost assessment at the Supreme Court, Costs Assessment division, which formally initiates the fee review process.
• Costs Assessor's Determination: A designated Costs Assessor evaluates the fees and determines what is reasonable, culminating in issuing a Certificate of Determination, which finalises the fee amount.

Queensland (QLD):

• Cost Assessment Application: The process begins with an application for cost assessment in the District or Supreme Court of Queensland, supported by an affidavit formally challenging the legal fees.
• Formal Bill Objection: Involves a formal objection to the solicitor’s bill as a key step in disputing the charges.
• Directions Hearing and Assessor Appointment: Attendance at a directions hearing is required for procedural decisions and the appointment of a Costs Assessor, setting the stage for the assessment.
• Assessor's Evaluation and Certificate: The appointed Costs Assessor thoroughly evaluates the fees and issues a Certificate of Determination, which conclusively sets the adjusted fee amount.

Final Reflections

Disputing legal fees is vital for ensuring fairness and transparency in legal proceedings. Regardless of your location across Australia, the process involves initial negotiation, an assessment of billing practices, and formal legal steps to challenge unreasonable charges.

With its deep expertise and affiliations, Law in Check is a valuable resource for navigating these complexities, especially for businesses and individuals facing substantial legal costs in high-value cases.

See here for 5 tips to ensure your legal fees remain reasonable.