Cost recovery proceedingsbylawyers

Many lawyers issue recovery proceedings in the Magistrates Court against their clients in order to recover their fees. In many cases the client will defend the proceedings, often on the basis that they have been "overcharged", and usually also on the basis that their lawyer did not provide an adequate service (for whatever reason).

The service of  the proceedings will often be the trigger for the client to complain to me about overcharging. Sometimes, the client will have already complained to me before the proceedings are issued - indeed, the complaint may be the trigger
for the lawyer to issue the proceedings. The complaint will usually mirror the client's defence to the proceedings. 

When all of that happens, there is clearly an overlap between my role in relation to the complaint and the Magistrates Court's role in relation to the recovery proceedings.

A Magistrate no longer has any power to refer these type of proceedings to the Supreme Court - so, quite simply, once proceedings are commenced in the Magistrates Court, that Court has to deal with the proceedings one way or another. Similarly, once an overcharging complaint is made to me, I have to deal with it one way or another.

What then can lawyers and firms expect when they issue recovery proceedings in the Magistrates Court and the client also complains (or has already complained) to me about overcharging? In discussions I have had with the Chief Magistrate, we have come to a "common understanding" as to how we will usually deal with the potential overlap between us. 

The Commissioner's Powers 

Mypowersinrelationtooverchargingcomplaintsaresetoutinsection77NoftheLegalPractitionersAct(Act).Inverygeneralterms:

  • when I receive an overcharging complaint, I first consider whether it can be resolved through conciliation conducted by my office; 
  • if  conciliation is either inappropriate or unsuccessful, it may be appropriate that I then have a costs assessment undertaken by a suitably qualified practitioner;
  • if the amount I determine to be appropriate for the work done is less than the amount that the practitioner has charged, then I can make a (non­ binding) recommendation that the bill be reduced (or, if already paid, that there be a refund);
  • if my recommendation isn't accepted (by either or both the practitioner and the complainant), then:
    • if the amount in dispute is more than $10,000, I am unlikely to be able to do much else (although I could take adjudication proceedings in the Supreme Court under clause 42 of Schedule 3 of the Act); or
    • if the amount in dispute is $10,000 or less, I can make a binding determination as to whether or not there has been overcharging and, if so, the amount that has been overcharged;
  • a binding determination can only be set aside by the relevant bill being adjudicated in the Supreme Court.
Because of the expense involved in obtaining a costs assessment, I will usually only do so when the amount in dispute is $10,000 or less (such that I can make a binding determination).