Legal Jargon Busted: Understand Terms in Your Costs Agreement

If you’ve ever opened a legal costs agreement and felt like you needed a law degree just to read it—you’re not alone. Legal documents are often packed with jargon, but understanding what you’re agreeing to is essential, especially when it comes to legal fees.

In this post, we break down some of the most common (and confusing) terms you’ll find in a costs agreement under the Legal Profession Uniform Law (LPUL)—so you can feel confident about what you’re signing.

1. “Costs Disclosure”

What it sounds like: Legal speak for an estimate.

What it actually means: This is a written explanation of how much your lawyer expects their fees to be.

Why it matters: Under Section 174(1) of the LPUL, your lawyer is required to give you this disclosure before or as soon as practicable after you start engaging them. It should include:

The estimated total legal costs,

How those costs will be calculated (e.g. hourly rates),

Your rights to negotiate, seek independent advice or challenge the bill.

If this is missing or unclear—you might have grounds to dispute your fees later.

2. “Legal Costs”

What it sounds like: Just the lawyer’s bill.

What it actually means: Legal costs under the LPUL include professional fees, disbursements, and GST.

• Professional fees are the lawyer's time (charged hourly or fixed).
• Disbursements are third-party expenses, like court filing fees or expert reports.
• It’s important to check whether disbursements are marked up or charged at cost.

3. “Costs Agreement”

What it sounds like: A one-sided contract.

What it actually means: This is a formal agreement between you and your lawyer about how fees will be charged.

• A costs agreement must be fair and reasonable.
• Just because you signed it doesn’t mean it’s enforceable if it’s not compliant with the law or you weren’t given enough information.

4. “Reasonable Costs”

What it sounds like: A lawyer’s opinion.

What it actually means: Costs must be proportionate to the complexity and value of the matter.

• LPUL requires that fees are not just lawful but also fair and reasonable under Section 172(1).
• If you’re being charged $10,000 for a simple letter of demand, something may be off.

5. “Billing Arrangements”

What it sounds like: Just the hourly rate.

What it actually means: This includes how often you’ll be billed, what for, and what rates apply.

Common types include:

• Hourly billing – You’re charged by the hour or part thereof.
• Fixed fee – A set amount for a specific task.
• Conditional or “No Win, No Fee” – Only payable if you win (note: disbursements might still apply!).

Lawyers must be clear and upfront about these arrangements—and you can negotiate them.

6. “Assessment or Review of Costs”

What it sounds like: : Something lawyers do in-house.

What it actually means: A formal process where a court or independent assessor reviews the reasonableness of a legal bill.

Common types include:

• You can apply for a costs assessment if you believe the bill is too high.
• Under Section 198 of the LPUL, you generally have 12 months from receiving the final bill to apply.

Lawyers must be clear and upfront about these arrangements—and you can negotiate them.

Final Thoughts

Lawyers are required to be transparent about their fees—but the legal language in costs agreements can still be overwhelming. If you're unsure, don’t hesitate to:

• Ask questions before signing,
• Request clarification in writing, or
• Seek a second opinion from a costs lawyer.



At Law in Check, we specialise in helping individuals and small businesses review legal bills and challenge unfair fees. If you're concerned about what you’ve been charged—or want to avoid being overcharged in the first place—get in touch.

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