What Actually Happens During a Legal Costs Assessment?

If you believe your lawyer has charged you too much, you may have heard that you can apply for a legal costs assessment. But what does that actually involve, and what happens once the process begins?

For many clients, the idea of a formal assessment can feel intimidating. You may be worried about additional legal costs, having to attend court or whether challenging your lawyer's bill will make the situation worse.

A legal costs assessment is a process designed to independently examine legal fees and determine the amount that is properly payable. Understanding how it works can help you decide whether it may be an appropriate option for your circumstances.

What Is a Legal Costs Assessment?

A legal costs assessment is a formal process in which an independent assessor or court examines legal costs to determine whether the amount charged is appropriate under the applicable law.

The process can be used in certain circumstances where a client disputes their own lawyer's fees. Costs assessments can also arise in other situations, such as disputes about costs payable between parties to litigation.

The exact procedure depends on the state or territory, the type of costs involved and the relevant legislation.

For example, New South Wales has a costs assessment scheme, while Victoria has processes involving the Costs Court. Queensland also has its own costs assessment procedures.

Although the processes differ, the general purpose is similar: to provide an independent determination of legal costs rather than leaving the parties to resolve the dispute themselves.

When Might You Consider a Costs Assessment?

A costs assessment may be worth considering if you have received a legal bill that you believe is excessive or unreasonable.

You may be concerned that the final amount is significantly higher than the original estimate, that you were not properly informed about increasing costs or that the invoice contains charges you do not understand.

Other concerns may include repeated work, excessive time entries, unnecessary attendances or charges that appear inconsistent with your costs agreement.

A high bill does not automatically mean you have been overcharged. However, if you have genuine concerns about the amount charged, an assessment may provide a formal way to have those costs examined.

What Happens Before an Assessment?

Before commencing a formal process, it is often helpful to obtain independent advice about your legal bill.

A legal costs lawyer can review your costs agreement, disclosure documents, invoices and other relevant material to identify whether there may be grounds to challenge the fees.

This preliminary review can also help you understand the potential costs, risks and likely benefits of proceeding.

In some circumstances, it may be possible to resolve the dispute through negotiation without needing to commence a formal assessment.

If an agreement cannot be reached, a costs assessment may be the next step.

How Do You Apply for a Costs Assessment?

The application process depends on the jurisdiction.

Generally, an application must be made to the relevant court, authority or costs assessment body using the required procedure.

You may need to provide information about the legal matter, the amount of costs in dispute and the reasons you believe the fees should be reviewed.

Supporting documents may also be required, including your costs agreement, invoices, itemised bills, costs disclosures and relevant correspondence.

There may be application fees and other costs associated with the process, so it is important to understand these before proceeding.

What Does the Assessor Actually Look At?

A costs assessor does not simply look at the final amount and decide whether it seems too high.

The assessment involves considering the legal work performed and whether the costs charged are appropriate in the circumstances.

Depending on the applicable law, relevant factors may include the complexity of the matter, the skill and experience required, the time spent, the necessity of the work and the rates charged.

The assessor may also consider the costs agreement, the disclosure provided to the client and whether the work was reasonably required.

For example, a substantial amount of time spent preparing for a complex trial may be justified, while the same amount of time spent on a relatively straightforward task may warrant closer examination.

The assessment is therefore focused on the circumstances of the particular matter rather than applying a single standard price to all legal work.

Will Every Invoice Entry Be Examined?

The level of detail involved can depend on the nature of the assessment and the issues in dispute.

An itemised bill can be particularly useful because it provides a breakdown of the work performed, the time recorded and the charges associated with individual tasks.

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The assessor may consider whether particular entries are reasonable, whether work appears to have been duplicated or whether the amount of time charged is justified.

However, an assessment is not necessarily limited to identifying individual billing mistakes. Broader issues, including costs disclosure and the overall reasonableness of the costs, may also be relevant.

Do You Have to Attend Court?

Not every costs assessment involves a traditional court hearing.

Some assessment processes are conducted primarily through written documents and submissions, while others may involve conferences, hearings or further procedural steps.

The requirements depend on the jurisdiction and the nature of the dispute.

If you are considering an assessment, a legal costs lawyer, like Law in Check, can explain what the process is likely to involve in your particular circumstances and whether you may need to attend or provide further information.

What Happens If the Assessor Finds the Fees Are Excessive?

If the assessment determines that the amount properly payable is lower than the amount originally charged, the legal costs may be reduced.

If you have not yet paid the bill, this may reduce the amount you are required to pay.

If you have already paid more than the amount determined to be payable, you may have rights to recover the difference, depending on the applicable law and circumstances.

However, an assessment does not guarantee a reduction. The assessor may determine that the costs charged are reasonable, or that only some of the disputed charges should be reduced.

The outcome will depend on the evidence and the particular legal costs being assessed.

How Long Does a Costs Assessment Take?

There is no single timeframe that applies to every costs assessment.

The length of the process can depend on the jurisdiction, the complexity of the matter, the amount of costs in dispute, the documents required and whether the parties disagree about particular issues.

Some matters may be resolved relatively efficiently, while more complex disputes can take considerably longer.

Before commencing an assessment, it is worth obtaining advice about the likely timeframe and what will be required from you throughout the process.

Are There Time Limits?

Yes. Strict time limits can apply to applications for legal costs assessment.

In New South Wales, Victoria and Western Australia, the Legal Profession Uniform Law generally provides a 12-month period for certain client applications, subject to the relevant provisions and possible extensions in particular circumstances.

Queensland also has its own time-limit rules, and other states and territories may have different requirements.

The applicable deadline can depend on when the bill was given, when payment was requested or made, and other circumstances.

If you are concerned about your legal fees, it is important to seek advice promptly rather than assuming you can challenge the bill at any time.

Is a Costs Assessment Worth It?

Whether a costs assessment is worthwhile depends on the amount in dispute, the strength of your concerns and the potential costs of pursuing the process.

For some clients, a formal assessment may provide an important opportunity to challenge a substantial legal bill. For others, negotiation or another form of resolution may be more appropriate.

An independent preliminary review can help you understand whether there appears to be a reasonable basis for challenging the fees and what options may be available.

The Bottom Line

A legal costs assessment provides a formal way to have legal fees independently examined.

It is not simply a process for deciding whether a bill feels too expensive. It involves considering the work performed, the circumstances of the matter and whether the costs charged are appropriate under the applicable law.

If you believe your legal bill may be excessive, understanding the assessment process can help you make a more informed decision about what to do next.

At Law in Check, we help individuals and businesses across Australia understand and challenge legal costs. Our experienced legal costs professionals can review your invoices, costs agreement and disclosure documents, advise you on your options and, where appropriate, assist with costs assessment proceedings.