Outrageous Legal Bills and What To Do About Them

Having to pay for a lawyer to prepare your case and go to court is one thing – but how would you feel if you were billed for your lawyer’s ‘friendly’ welcome letter?

27-year-old Chris ‘Wombat’ McGrath certainly wasn’t happy when he had a look through the itemised bill he received from his lawyers. After signing up to the firm, the Sydney man received a welcome letter from them, but had no idea he would be billed $48 for it!

And that was just the start – his bill revealed several other outrageous costs, including a photocopying bill for $8600. And another client of the same firm later revealed that he was charged for the time it took his lawyers to read his ‘thank you’ email!

Mr McGrath took his claim to an independent costs assessor – and so did several other clients of the firm. Their bills showed that single lawyers at the firm had achieved the impressive feat of billing for over 24 hours worth of work in one single day! This was only discovered when the timesheets of several clients were compared – although the figure would likely have been even greater if the timesheets of all clients were available. It seems that the firm relied on the fact that many clients never question, let alone contest, their exorbitant legal bills.

A high portion of the personal injury firm’s clients came from non-English speaking backgrounds, or were from overseas, and did not understand how the Australian legal system works. Some had mental health conditions, often as a result of the accident that brought them to the firm in the first place.

Unsurprisingly, the large firm is no longer in operation. Altogether, over 100 former clients sued the firm, and the partners ended up owing millions. One partner was “struck off” by the Law Society and can no longer work as a lawyer, and several declared bankruptcy.

Not an Isolated Incident

And not too long ago, another lawyer was struck off, not in NSW but Victoria. This sole-practitioner will not be allowed to practice again until 2020. He was prosecuted for overcharging clients, and the investigation revealed that his practising certificate had already been suspended – twice!

The Tribunal Member sitting on his hearing was “not satisfied that it is safe to allow him to continue in legal practice.”

Do these stories ring warning bells for you? Faced with accounts from greedy lawyers who have acted unethically, you might wonder if there are any decent lawyers out there!

Fortunately, only a small portion of lawyers are willing to go these lengths to make money unethically at the expense of their clients – and at the risk of their own reputation and career!

But even if the worst has happened to you, you may be able to get your money back by applying for a “costs assessment”.

Cost Assessments in NSW

Since 1 July this year, the Legal Profession Uniform Law (NSW) governs how the law deals with over-charging by lawyers.

If you believe that your legal bill is too high, or have a problem with the whole or part of your legal fees, you can apply for an independent costs assessor to determine:

• If a valid costs agreement exists;
• If your costs are fair and reasonable; and
• If your costs are not fair and reasonable, the appropriate amount (if any) that you are liable to pay.

You can make an application for a costs assessment, even if you have wholly or partly paid the bill, and there is generally a 12 month time-frame to make the application – although if you have good reasons, an application can be dealt with after this period.

If successful, not only could you receive your money back, but the unethical lawyer could face disciplinary action. Coming up with unreasonable bills can qualify as unsatisfactory professional conduct or even the very serious offence of professional misconduct, which can result in the lawyer being ‘struck off’ – no longer able to practice as a lawyer.

All law firms are required by law to provide you with an “itemised bill” if you ask, which will detail the date of the work, nature of the work, time spent and amount charged. And all good lawyers will take you through the cost agreement in detail before asking whether you wish to sign it. It is often a good idea to take the agreement home and consider it for some time, before deciding whether to sign it.

So if anything can be learnt from these tales of outrageously oversized legal bills, perhaps it is the importance of carefully considering your cost agreement, taking time to go through your legal bills, raising any concerns with your lawyer and, if they do not rectify the situation, seeking a cost assessment with a view to receiving a fair bill and bringing unethical lawyers to account.