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Sterling Law sets leading precedent on itemised bills

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With its latest big win, Sterling Law is establishing its place as an elite Queensland litigation firm, and a force to be reckoned with.

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The facts

When Joanne Murdock deliberately remained uncontactable to her solicitors for an extended period of time, she received a bill from them for all the work they had done for her.

The bill set out the charges item by item, particularising the date, the time spent and the person who performed the work, but for most items only provided very concise descriptions of the work performed. Examples later complained of included “attendance with you”, and “telephone attendance with you”.

Nearly a month later, Joanne Murdock saw another firm named Whitehead Crowther Lawyers for advice on the bill. They wrote to her former solicitors requesting “a bill in itemised format prepared in accordance with the law society rules (sic)”. Because of Joanne Murdock’s failure to make any part payment, secure the costs of her former solicitors or even accept instructions for service, her former solicitors commenced proceedings in the Magistrates Court of Queensland for recovery of their fees and disbursements.

A few months later, her former solicitors obtained summary judgment at a hearing before Magistrate Noel Nunan, who also refused to order a costs assessment.

Joanne Murdock then appealed this decision, appointing Rose Litigation Lawyers to do so. Rose Litigation Lawyers filed a Notice of Appeal, in summary contending that Magistrate Nunan had erred in finding the bill was an itemised bill and for refusing to order a costs assessment.

Legal Profession Act 2007 (Qld)

Section 300 of the Legal Profession Act 2007 (Qld) defines the following terms:

“itemised bill” means a bill stating, in detail, how the legal costs are made up in a way that would allow the legal costs to be assessed under division 7.

“lump sum bill” means a bill that describes the legal services to which it relates and specifies the total amount of the legal costs.

Section 332 of the Legal Profession Act 2007 (Qld) relevantly provides that:

332 Request for itemised bill

(1) If a bill is given by a law practice in the form of a lump sum bill, any person who is entitled to apply for an assessment of the legal costs to which the bill relates may request the law practice to give the person an itemised bill.

A bill in the form of a lump sum bill includes a bill other than an itemised bill.

(2) The law practice must comply with the request within 28 days after the date on which the request is made.

(5) If the person makes a request for an itemised bill within 30 days after receiving the lump sum bill, the law practice must not commence proceedings to recover the legal costs from the person until 30 days after complying with the request.

The Legal Profession Act 2007 (and the many statutes before it) provides for a process where an independent person known as a costs assessor goes through a lawyer’s bill and decides which charges on a bill are fair and reasonable, and should be allowed. This process is known as a costs assessment, and is primarily intended to protect clients of solicitors.  Section 335 of the Legal Profession Act 2007 (Qld) relevantly provides that:

335 Application by clients or third party payers for costs assessment

(1) A client may apply for an assessment of the whole or any part of legal costs.

(10) Subject to this section, a costs application under subsection (1) or (2) must be made in the way provided under the Uniform Civil Procedure Rules.

Uniform Civil Procedure Rules 1999

Rule 740 of the Uniform Civil Procedure Rules 1999 relevantly provides that:

(1) After a certificate of assessment is filed, the registrar of the court must make the appropriate order having regard to the certificate.

(2) The order takes effect as a judgment of the court.

Rule 743A of the Uniform Civil Procedure Rules 1999 relevantly provides that:

743A Application for costs assessment

(1) A person applying for a costs assessment must apply to the relevant court.

(2) The application must—

(a) be in the approved form; and

(b) state the names of any persons to whom notice must be given under the Legal Profession Act 2007, section 339 (1); and

(c) if practicable—

(i) nominate a particular costs assessor for the assessment; and

(ii) state the applicable hourly rate of the nominated costs assessor; and

(d) be accompanied by the following—

(i) an affidavit;

(ii) if applicable, the nominated costs assessor’s consent to appointment to carry out the costs assessment and confirmation that, if appointed, there would be no conflict of interest;

(iii) the prescribed fee.

(3) If the applicant has an itemised bill for all of the costs to be assessed under the application, a copy of the itemised bill must be an exhibit to the affidavit.

(4) If the applicant does not have an itemised bill for all of the costs to be assessed under the application, the best information the applicant has as to the costs to be assessed must be included in the affidavit.

(5) The affidavit must also—

(a) state whether the applicant disputes or requires assessment of all or what part of the costs; and

(b) if the applicant disputes all or part of the costs, state the grounds on which the applicant disputes the amount of the costs or liability to pay them.

Relevant Case Law

In Keene v Ward [1849] EngR 1210, The Queen’s Bench held that a solicitor’s bill must contain sufficient information for him to obtain advice about taxation, but that an exactness of form was not required.

In Cook v Gillard [1852] EngR 942, the House of Lords held that a solicitor’s bill which failed to specify in which Court the business was done was still valid, as such information would presumably already be within the knowledge of the client.

In Haigh v Ousey (1857) 7 El. & Bl. 578 119EngRep, it was held that the question of whether a bill was sufficient for a client to be advised about whether to seek taxation of the solicitor’s costs depended on what further information the client was able to tell their advisors about the charges.

In Clayton Utz Lawyers v P & W Enterprises Pty Ltd [2011] QDC 5, Judge Reid of the District Court of Queensland held that the generalised and incomplete descriptions of the work in the bills provided by the law firm were not itemised bills within the meaning of the Legal Profession Act 2007 as they provided “a wholly inadequate explanation of the work actually performed”. Consequently, the law firm was ordered to deliver itemised bills.

On the other hand, in Pott v Clayton Utz [2012] QSC 167 it was held by the Supreme Court of Queensland that the client has an onus to show what further information they require to get advice about applying for a cost assessment, otherwise the solicitor’s bills would be presumed to be itemised bills, and that merely swearing to a generalised concern of overcharging is insufficient to discharge this onus.

Decision of the District Court

At the hearing, Judge Porter QC immediately identified that the central issue of the appeal was whether the bill provided was an itemised bill within the meaning of the Legal Profession Act 2007, as all of the grounds of appeal depended on the bill being found to not be an itemised bill. His Honour also correctly noted that the central problem for Joanne Murdock was that she had not sworn any affidavit in the Magistrates Court proceedings concerning the extent of her knowledge of the charges contained in the bill. An adjournment application to adduce fresh evidence at the hearing was dismissed ex tempore.

Whilst Judge Porter QC held that a proper request for an itemised bill had been made within 30 days as required to enliven the prohibition on suing in section 332(5) of the Legal Profession Act, he also held that the bill was an itemised bill, and therefore there was no prohibition on the law practice commencing recovery proceedings when it did. The reasons why the bill was an itemised bill were because it specifically identified all the work performed and the names of other persons involved, most of the unparticularised attendances involved relatively short periods of time, and that Joanne Murdock would be expected to know much about the work performed for her. In any event, the absence of evidence by Joanne Murdock as to the extent of her knowledge meant that she had failed to discharge the onus of showing she did not have sufficient information to obtain advice about the bill.

Judge Porter QC rejected other arguments in support of the appeal, including that Magistrate Nunan should have ordered a costs assessment, that the terms of the mandatory costs disclosure provided to Joanne Murdock formed a part of the contract between herself and the firm, and that the Defence filed for Joanne Murdock constituted evidence of the truth of its contents because it was exhibited to an affidavit filed by the firm.

Because there was no error on the part of Magistrate Nunan, the appeal was dismissed with costs.

Conclusion

This case is the latest in a long case history of clients being sued for outstanding fees complaining about the sufficiency of the contents of the bill in order to avoid judgment being entered or standing against them. Applying the established principles derived from the case law, the District Court held that the client had failed to discharge her onus to show that the bill was not an itemised bill, because she had not provided any evidence of the extent of her knowledge of the work done for her. As a result, the appeal had to be dismissed.

This case again shows how whether a bill is sufficient will vary from case to case, depending on the client’s own knowledge or presumed knowledge. The (common) view that it is only the information that is contained on the face of the bill itself that matters is erroneous, because the test is whether another solicitor can provide advice based on the contents of bill supplemented by the client’s own knowledge of the matter. It is only when the sum of these two factors still means that the client cannot make an informed decision of whether to seek a costs assessment that the bill can be deemed inadequate and (upon a proper request) the prohibition on the law firm suing provided in section 332(5) of the Legal Profession Act applies.

 

Sterling Law’s sterling victory over delinquent debtor

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Sterling Law is gaining a reputation as a feared litigation firm in the wake of a resounding victory over Rose Litigation Lawyers and a debtor named Joanne Murdock who didn’t want to pay her bill.

In April, summary judgment was granted by the Magistrates Court against the debtor Joanne Murdock. But Joanne Murdock appealed against the decision, contending that she shouldn’t have to pay because she hadn’t been given a proper itemised bill.

Everyone knows that people who don’t want to pay their bills are the most likely to complain about the content and form of the bills themselves, alleging that they do not provide them with enough information about the fees and charges.

Over 170 years ago, the English Courts cottoned onto this as well. This is why in Keene v Ward [1849] EngR 1210, the King’s Bench observed that:

“In requiring the delivery of an attorney’s bill, the Legislature intended that the client should have sufficient materials for obtaining advice as to taxation; and we think that we fulfil that intention by holding the present bill sufficient within that principle; whereas, if we required in respect of every item a precise exactness of form, we should go beyond the words and meaning of the statute, and should give facilities to dishonest clients to defeat just claims upon a pretence of a defect of form in respect of which they had no real interest.”

Rose Litigation Lawyers were supremely confident of victory, but Sterling Law had a superior understanding of the law of bills, and this was clearly apparent at the hearing.

Today, Judge Porter QC handed down judgment in the matter of Murdock v Sterling Law (Qld) Pty Ltd [2019] QDC 226 (BD 1636/19). In this case, the debtor Joanne Murdock in effect claimed that she had no recollection whatsoever of numerous telephone calls she made and personal attendances of hers, and therefore that she was unable to make up her mind about whether or how to challenge the bill. This is in spite of the fact that in the Magistrates Court hearing she had expressed outrage at the costs, and had proposed and sought a costs assessment.

There was thus a glaring contradiction at the heart of her appeal between her claims of being unable to make up her mind about seeking a costs assessment and a costs assessment being the outcome that she was seeking on appeal.

Judge Porter QC today (in our view) shut down the charade by quoting the above passage in Keene v Ward and dismissing the appeal with costs. In summary, there was no evidence that the debtor Joanne Murdock did not know enough about the charges to make up her mind on whether to apply for a costs assessment.

This is a big win for Sterling Law and for all people who have performed work for those who, like the debtor Joanne Murdock in this case, are unwilling to pay for the services provided to them, and have to be taken to court in order to make them pay.

Why do you need a lawyer?

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Why do you need a lawyer? On some level this is a basic and obvious question, but there is a lot more to the answer than first meets the eye. Although it seems like a pretty obvious question, there are in fact a number of advantages of having a lawyer.

advantages of having a lawyer

1. Lawyers have knowledge and experience

A lawyer usually has special knowledge and experience acquired from their qualifications and their years of legal practice. A lawyer knows the law, should know the procedures, and will be able to prepare documents and handle your case in the most effective way. By engaging a lawyer, you are taking advantage of the knowledge and skills that he or she possesses, which should benefit your case enormously.

Lawyers know what points and arguments are most relevant and effective, and which ones are less so. Experienced lawyers know of the temperament and expectations of particular judges, and are able to tailor their approach accordingly. Lawyers can effectively advise you of the advantages and disadvantages of a proposed course of action.

In contrast, relying on the advices of people who are not legally qualified is a very dangerous thing to do, even if such people mean well. There are a lot of myths in the community about the legal system and how it works. By speaking with a lawyer, you can find out whether what you have heard is in fact true, and if not your understanding of your matter will become more accurate and realistic.

2. Lawyers can help prevent disputes

One of the popular and enduring myths about lawyers is that they create and promote conflict. In reality, lawyers issue try to prevent conflict and attempt to resolve conflict without the need for final judicial determination. Disputes can and often are resolved through the sending of constructive correspondence, negotiation and participation in alternative dispute resolution.

By protecting your rights and interests, getting the agreement into writing and ensuring that everything is legally sound, a lawyer can significantly reduce the likelihood of having a costly dispute arise in the first place. And even if a dispute does eventuate, the number of uncertainties and the risks of a seriously bad outcome are substantially less the earlier a lawyer is retained.

3. The other party will take you more seriously

Because lay people representing themselves are at such a disadvantage, the lawyers for the other party(ies) might be less likely to put forward decent offers to settle the case, which can result in you settling for less than you otherwise would. Without the benefit of legal advice, you are unlikely to know whether an offer you receive is reasonable, or whether you are likely to get a better outcome by rejecting it.

Even if you know the offers the other side have been prepared to put forward are inadequate, you may be less likely to settle your case because the other side know that you will struggle to prove your case as a self-represented litigant, which means more time, stress and risk.

4. Lawyers take the stress out the situation

Having someone on your side who is handling the situation for you can be rather reassuring, and reduces the stress you are feeling about your case. It saves you from having to read every piece of correspondence that comes in about your matter, feeling like you are in it alone or having to think about it constantly.

5. Lawyers save you time

For most people, time is valuable. By doing most of the work for you, the lawyer allows you to have the time to live your life. As a result, that you can spend time with your family and friends, and not have to take substantial time off work.

6. Lawyers are not emotionally involved

Because your lawyers are not you, there is a benefit of detachment that exists that allows your lawyer to view your case objectively and provide you with sound advice and recommendations. There’s an old legal truism that “he who acts for himself has a fool for a client”. This applies even to lawyers who represent themselves, because a self-represented litigant is usually too emotionally involved to see things objectively and make rational judgments. This is particularly the case in family law, where emotions are heightened.

7. If you win, you can get your costs

In civil litigation, the general rule is that the loser usually pays the winner’s costs. So if you win, you get (partly) compensated for the legal bills you have paid with a costs order in your favour. In contrast, if you are self-represented you are only entitled to claim for disbursements such as filing fees, and therefore cannot be compensated for your time and effort.

8. Lawyers have insurance

In Australia, all lawyers are required to have professional indemnity insurance. If your lawyer makes a critical error which costs you a lot of money, you can sue your lawyer for this. In contrast, if you mess up your own case you only have yourself to blame and therefore are not entitled to any compensation.

Conclusion

Of course, all this is not to say that you need a lawyer in every legal dispute you ever have. If for instance you have a dispute over a small sum in a tribunal where costs cannot be awarded, you would probably best be served by representing yourself. But in most other cases, the benefits of having a lawyer in a legal dispute far outweigh the costs.

This blog also has recommendations on how to minimise your legal fees and how to help your own case when you have a lawyer representing you.

Solicitor struck off for the second time

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Michael James Quinn has the dubious honour of being the first solicitor in Queensland legal history to be struck off twice.

Legal advice

Normally when a lawyer is removed from the roll (‘struck off’) that effectively ends their legal career, as they are permanently ineligible to obtain a practising certificate which would enable them to practice law again. In this case, the unusual history of the matter led to the practitioner being struck off twice.

The facts

From 1 April 2009, Michael James Quinn practised as sole practitioner in the firm Q5 Law Proprietary Limited until 4 May 2012 when his practising certificate was cancelled.

In 2015, Quinn was first struck off by the Queensland Civil and Administrative Tribunal (QCAT) after failing to appear and contest 64 charges arising from the trust account of Q5 Law Proprietary Limited.

In 2016, Quinn successfully appealed this decision because QCAT had failed to satisfy itself that the charges had been proven pursuant to section 453 of the Legal Profession Act 2007. The Court of Appeal set aside the QCAT orders and ordered a re-hearing.

On 12 October 2017 Quinn was convicted after trial by a District Court jury of one count of fraud with a circumstance of aggravation contrary to section 408C of the Criminal Code for trust account defalcations of Q5 Law Proprietary Limited. He was sentenced to 12 months imprisonment, with immediate suspension and an operational period of two years.

The Legal Services Commissioner applied to QCAT for another order that Quinn be struck off for the trust account defalcations conviction as well as unlawful drawing of trust moneys, retention of trust moneys in a general account contrary and a failure to keep records as required by the Legal Profession Act 2007.

The Law

Section 408C of the Criminal Code provides that:

“(1) A person who dishonestly

(a) applies to his or her own use or to the use of any person

(i) property belonging to another; or

(ii) property belonging to the person, or which is in the person’s possession, either solely or jointly with another person, subject to a trust, direction or condition or on account of any other person; or

(b) obtains property from any person; or

(c) induces any person to deliver property to any person; or

(d) gains a benefit or advantage, pecuniary or otherwise, for any person; or

(e) causes a detriment, pecuniary or otherwise, to any person; or

(f) induces any person to do any act which the person is lawfully entitled to abstain from doing; or

(g) induces any person to abstain from doing any act which that person is lawfully entitled to do; or

(h) makes off, knowing that payment on the spot is required or expected for any property lawfully supplied or returned or for any service lawfully provided, without having paid and with intent to avoid payment;

commits the crime of fraud.”

Section 419 of the Legal Profession Act 2007 states as follows:

419 Meaning of professional misconduct

(1)”Professional misconduct” includes

(a) unsatisfactory professional conduct of an Australian legal practitioner, if the conduct involves a substantial or consistent failure to reach or keep a reasonable standard of competence and diligence; and

(b) conduct of an Australian legal practitioner, whether happening in connection with the practice of law or happening otherwise than in connection with the practice of law that would, if established, justify a finding that the practitioner is not a fit and proper person to engage in legal practice.

Section 452 of the Legal Profession Act 2007 states as follows:

“Starting proceeding before a disciplinary body

(1) The commissioner may apply—

(a) to the tribunal for an order against an Australian legal practitioner in relation to a complaint against the legal practitioner or an investigation matter.”

Section 453 of the Legal Profession Act 2007 states as follows:

“Hearings

The disciplinary body must hear and decide each allegation stated in the discipline application.”

Section 456 of the Legal Profession Act 2007 relevantly provides as follows:

“456 Decisions of tribunal about an Australian legal practitioner

(1) If, after the tribunal has completed a hearing of a discipline application in relation to a complaint or an investigation matter against an Australian legal practitioner, the tribunal is satisfied that the practitioner has engaged in unsatisfactory professional conduct or professional misconduct, the tribunal may make any order as it thinks fit, including any 1 or more of the orders stated in this section.

(2) The tribunal may, under this subsection, make 1 or more of the following in a way it considers appropriate—

(a) an order recommending that the name of the Australian legal practitioner be removed from the local roll;

(b) an order that the practitioner’s local practising certificate be suspended for a stated period or cancelled;

(c) an order that a local practising certificate not be granted to the practitioner before the end of a stated period.”

QCAT’s decision

The charges and the facts supporting them were expressly admitted by Quinn.

As QCAT Member Justice Daubney noted, Quinn’s conduct clearly amounted to professional misconduct because it involved both a substantial and a consistent failure over a period of 16 months to keep reasonable standards of competence and diligence, and also justified a finding that the practitioner is not a fit and proper person to engage in legal practice. This was notwithstanding the fact that no client of Quinn’s had suffered any loss.

Justice Daubney then made the following observations:

“It is trite to observe that the clients of solicitors must be able to expect absolute probity from solicitors in relation to dealings with moneys held in trust. Various terms have been used to describe the level of that probity. Those terms have elevated the extent of that probity to levels such as it being a sacred trust. Whatever words one uses, the inherent relationship between a solicitor and their client must be founded on trust, and a necessary practical manifestation of that trust must be the absolute probity with which solicitors both theoretically and in practice approach their dealings with moneys that have been entrusted to them by or on behalf of clients.”

Due to the relative currency of Quinn’s conviction, the serious nature of the offending and the fact that that offending occurred in the course of his conduct of a legal practice, Justice Daubney determined that the appropriate sanction was removal from the roll.

Justice Daubney consequently ordered that Quinn’s name again be removed from the roll and that he pay the Commissioner’s costs.

Conclusion

This case is one of many that shows that trust account defalcations are a serious matter, and in cases where there are numerous or serious defalcations a solicitor can be struck off for them, even when their own clients are not left worse off.

Quinn’s win in the Court of Appeal, in which he managed to have an order that he be removed from the roll overturned, was a temporary victory. A subsequent fraud conviction in relation to some of the same trust accounting issues for which he had been struck off at first instance ensured that he would be struck off again.

How you can save on legal fees

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This post discussed why legal fees tend to be so high. The good news is that as a client there are a number of ways you can reduce your legal fees, as the rest of this article will show.
Continue reading “How you can save on legal fees”

When the Solicitor-Barrister relationship turns sour

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There are many aspects to the solicitor-barrister relationship. In some ways the relationship is symbiotic: solicitors need barristers when a case requires specialist advice or is going to trial, and barristers need solicitors to refer work to them. It is certainly in the interests of solicitors to have good relations with at least some barristers and vice versa. However, many (but not all) barristers consider themselves to be the more senior arm of the profession, to the chagrin of solicitors.

When a barrister is instructed by the solicitor, the two act as a team in preparing for and presenting the client’s case. The solicitor’s role is to obtain the client’s instructions, sort the facts in a digestible format for the barrister and to gather the relevant information and evidence in preparation for hearing. The barrister on the other hand provides advice and performs the advocacy work in court. When the solicitor and barrister work well together, that is to the benefit of the client, whose chances of a favourable outcome are increased.

However, two Discipline Applications brought against solicitors in the Queensland Civil and Administrative Tribunal (QCAT) in 2013 show that disputes can arise between solicitors and barristers that can have serious consequences for the legal practitioner found to have acted unethically.
Continue reading “When the Solicitor-Barrister relationship turns sour”

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