If you believe you’ve been overcharged by your lawyer or law firm, first check that you have a costs agreement and itemised bill. These documents will help you work out which items are in dispute. In Victoria, NSW and Queensland, lawyers are legally obliged to give you an itemised bill within 28 days of being asked.
Talk to your lawyer
This could be the most cost-effective solution when you think you have been overcharged — but be aware of your rights. CHOICE subscriber Anastasia, who was upset with her lawyers for failing to prepare a response to the court on a child custody dispute with her ex-husband, wanted to terminate her relationship with the law firm. She asked for her bill, which came to a lump sum of $2500. “I then asked for an itemised bill so I could understand the high cost,” she says. “Instead, I received a letter from the firm offering an $800 discount only if I did not request an itemised bill.” Disillusioned, she paid the $1700 and represented herself in court.
Mediation is generally quicker and cheaper than costs assessment in court. In most states, legal bodies provide free mediation where you and the lawyer come together with an independent mediator. Most mediators cannot give legal advice or decide whether the costs are fair or reasonable, but being independent facilitators, they may be able to help both parties come to an agreement.
Make a formal complaint
Every state has a body that handles consumer complaints about legal services and lawyers (see Contacts). Generally, the cost dispute will be looked into and may be referred to another legal body, where a disciplinary inquiry against the lawyer may be initiated. There is also a time limit — usually between 30 and 60 days — to make a complaint. The processes and costs for seeking redress vary with each jurisdiction (see Different states, different rules).
CHOICE reader experiences
"My ex-husband and I drew up a simple agreement in relation to the division of our assets that should only have cost $600, but ended up costing me $1800. My lawyer insisted she needed extra information to draw up the agreement. In the end, she drew up one that looked exactly like the one I gave her, yet the costs trebled from all the emailing and telephoning for which she happily charged me.
"When I confronted her, she said she would not give me the document until I paid the full amount. I had to pay in the end as I needed this legal agreement to avoid paying stamp duty on the house.”
— Lara, NSW
“In 2006, my neighbour made a claim against me for negligence in not repairing a faulty fence in a timely manner. He had scaffolding put up and made a $54,000 claim against me – $14,000 for the cost of the scaffolding and professional expenses and $40,000 for his estimated legal fees. As part of my defence, my lawyers advised me to cross-claim against my builder who was to blame for not repairing the fence when instructed. They estimated that the legal cost of defending the case would be between $20,000 and $40,000, most of which could be passed on to my builder if I was successful in establishing the cross claim.
"After the first hearing, my legal costs more than trebled to about $150,000. My lawyers said this was partly because of the delaying tactics of my neighbour. As I no longer trusted their advice and felt I had been overcharged, I dismissed them and had their costs assessed. As a result, $15,000 was discounted from the bill, most of which I've settled. I have now appointed new lawyers and have spent between $30,000 and $40,000 fighting two cases – one against the neighbour's claim and the other against my previous lawyers."
— Michael, NSW