Month: April 2017

What will you pay? Costs Charged to Clients in Litigation matters

 

 

NOTE You should always check the links we have provided for the most current Court Scales. The Court Scales usually change each January and July
Objective:
It is always our objective to obtain the best possible result for our client at the least possible cost to the client.
What Amount?  How is it calculated?
1. Apart from hourly rates for the lawyers, based on their individual professional experience, Hassall’s Litigation Services (HLS) charge clients in accordance with the Court Scale applicable to the Court in which the litigation is being conducted. We usually charge in accordance with the County Court Scale, see: the County Court website Link to County Court Site and https://www.liv.asn.au/PDF/Practice-Resources/LIV-Legal-costing/2015-Supreme-Court-Scale.

1.1

In most litigation it is impossible to give a fixed fee without extensive qualifications and limitations to arrive at the fixed fee making the scope of work narrow and inflexible.  Most cases evolve as the matter progresses and the parties choose an option from a variety of available options.  We never know exactly how another party will react to what we do – so we are always trying to second guess another party’s response to arrive at the fixed fee.  By the time we get most disputes the opportunity for rational discussion has passed.

1.2

NOTE: Most Clients need a monthly payment plan or a secured loan to pay the costs of proceedings and a Trial if it occurs. Please discuss this with your solicitor after the Assessment*, Preliminary Advice* and Cross-Checking* has occurred – see below for these items.

 

2. Legal Costs

(i)

The term legal costs is used to include the total charges of the solicitor for the legal services, this being the solicitor’s professional fees, together with all the disbursements, which are the additional fees the solicitor has incurred, with the client’s consent, in acting for the client.

(ii)

The disbursements include the fees paid to the barrister/s, the fees paid to the expert/s fees, for example, the reports of the medical expert and hospital reports and the like and all other disbursements, which can range from the cost of recording the proceedings in court and typing the transcripts to the smaller sundry disbursements, the photocopying fees and postage.  The Goods and Services Tax is also included in the legal costs, charged by the solicitor.

(iii)

We will not incur the responsibility for payment of any disbursement unless and until the client has complied with our request to pay the deposit for our services and provided us with clear funds to pay for any disbursement*

 

3. NON – Court Scale

3.1

For non-litigious matters we charge in accordance with the Practitioner’s (i.e. the solicitor’s) Remuneration Order, (being an Order of a Court) see: https://www.liv.asn.au/getattachment/Professional-Practice/LIV-Cost-Lawyers/Scales-of-Costs/20160912_PDF_LP_PRO2017FinalSigned_FINAL.pdf.aspx

3.2

We charge in accordance with the County Court Scale in most matters because we are providing Litigation Services i.e. advice about whether or not to go to litigation, or whether or not to defend a claim against you or what is the best way to obtain a resolution to a problem without all the costs of a Court or Tribunal proceeding or at least minimising the costs of the proposed proceedings which can be done by making an offer.

 

4. Assessment* – KNOW YOUR OPTIONS
What are – Hassall’s Litigation Services
The objective we have at first contact/interview is to assess whether or not our client has a claim or a defence to someone making a claim against our client. We provide the first hour of service for free (phone, email, or conference) assessing the client’s documents and statements. The assessment usually takes up to 2 hours so clients end up paying for 1 hour to get an idea of where they stand, what they can and cannot do.
5. Preliminary Advice*
After or during the assessment we provide a Preliminary Advice about likely success (or otherwise) and the rough guesstimate of the legal costs you might incur.
Cost The client can end up paying nothing or for 1 hour or up to about $2,500 to the end of the Preliminary Advice stage of our services.
6. Cross-Check*
Sometimes when issues are complex we need your agreement to have us engage a barrister for the purposes of cross-checking our assessment and advice. The barrister we engage will be experienced in the area of the dispute, e.g. building & construction, divorce & family law, Wills & probate, often it is not necessary or there is no time to be wasted getting a case up and running or defending a claim against our client, if the barrister says the case is weak.
Cost A Barrister’s fee for Cross-Checking our Assessment and Preliminary Advice depends on the years of experience and the area of law in which the barrister practices. For general litigation matters we can usually (as at April 2017) get a Cross-Checking Advice for between $1,500 and $2,500.

 

7. Example – Building & Construction:
In a recent (March 2016- April 2017) building and construction dispute we were provided with 2 storage boxes of documents (mainly emails) to read, sort and index for reference to a building consultant and barrister, in addition to the time spent with the builder getting the “story”.

We engaged and had a building consultant inspect the premises and provided a report which identified the value of the defects and incomplete works to compare what the owner was claiming.

We used this material to copy and refer a brief of documents, including the 2 original reports (and subsequent commentaries), emails and contract documents with copy letters by us to our client and the owners’ lawyer, to a barrister for the cross- checking of our Assessment and Preliminary Advice, where the owners were claiming $153,000 in defects and incomplete works and the builder was claiming $50,000 in unpaid claims and variations.

The total dispute may might about $200,000.

The barrister agreed that it would be cheaper, in the long run for our client, the builder, to settle with the owner by giving up the claim for $50,000 and avoiding litigation if possible because the cost of the litigation would exceed the builder’s claim of $50,000, especially with each day at VCAT costing between $5,000 and $7,500 per day, for solicitor, barrister, expert witness and hearing fees.

We had put a scope of work on the matter after getting the boxes of documents and before any other work, of about $17,000 for us plus the building consultant at about $5,000 and a barrister at $2,500. For the cost of about $25,000, the builder has an expert witness statement prepared and clear options on how to approach and probably resolve a dispute of $200,000.

To finalise the dispute would be the next scope of works.  The builder was made aware of his options so he could make an informed decision.

 

8. Costs Agreement and Disclosure

8.1

In Victoria a solicitor is required by law to make full disclosure to a client

“when or as soon as practicable after instructions are initially given in a matter, provide the client with information disclosing the basis on which legal costs will be calculated in the matter and an estimate of the total legal costs; (section 174(1)(a) of the Legal Profession Uniform Law 2014.”

The Legal Profession Uniform Law 2014 (“LPUL”) is the Act which regulates the relationship between the solicitor and the client in respect to costs.

8.2

The LPUL and the Legal Profession Uniform Legal Practice (Solicitors) Rules 2015, made under the LPUL govern disputes between lawyers and clients regarding costs.

8.3

Should a Lawyer comply with s.174(1)(a), above then sections 99, 172 and 200 of the LPUL apply to the dispute.  Section 99 says in sub-section (5) – that an order specifying the amount payable as legal costs “is to be based on VCAT’s assessment of what is fair and reasonable in all the circumstances” and s.172 says that “in charging legal costs, charge costs that are no more than fair and reasonable in all the circumstances and that in particular are proportionately and reasonably incurred; and proportionate and reasonable in amount.”

8.4

In our experience when costs disputes end up at the Legal Services Commission, VCAT or the Costs Court the appropriate Court Scale of costs is the reference for what is proportionately and reasonably incurred and proportionate and reasonable in amount, as required by the LPUL and that is why we use it as the basis of our costs disclosure and the invoices we send to our clients for our legal costs.

 

9. Don’t Hesitate – Litigate!
Part of the Assessment process is that, we work with the client to assess the options available to either make a claim or defend a claim and as we give Preliminary Advice and/or had our advice Cross-Checked, we have to consider the implications and risks associated with the obligations under the Civil Procedure Act 2010, which requires your solicitor to sign a Proper Basis Certificate and the client to sign an Overarching Obligations Certificate, which can be found at: http://www.supremecourt.vic.gov.au/home/forms+fees+and+services/forms/4a+overarching+obligations+certification. Please ensure that you read it carefully.
10. Once all the options and obligations are canvassed and satisfied we then provide our client with further Litigation Services that they might require.
11. Please contact us at admin@hls.net.au to obtain introductory advice.

 

This article provides information that is general in nature and is not a substitute for legal advice.

Can the Builder Return to Fix Defects or Complete

Yes is the short answer. In the NSW case of The Owners- Strata Plan No 76674 v Di Blasio Constructions Pty Ltd [2014] NSWSC 1067, the Supreme Court in NSW agreed that the Builder does have the initial right to return and fix defects if there is an opportunity to do so offered by the owner.

BUT if there is “an inadequate response” by the Builder then the Builder will lose the right to return and fix.

The Owners’ Corporation (“OC”) got a report of defects (“Report”) and gave it to the builder with the request the Builder fix the defects as set out in the scope of works provided in the Report.
The Court found that the owner who suffers a loss due to a breach of contract is required to act reasonably so as to recover the loss, and this includes making reasonable attempts to mitigate (reduce) the loss.
By the same token the plaintiff who has suffered the loss is entitled to recover the costs of reinstating the property so it corresponds to the contract.
And it is for the defendant – the Builder in this case – to prove the owner acted unreasonably and taking Court proceedings is one factor taken into account when deciding if the owners acted reasonably.
Making offers and trying to avoid litigation is an indicator of acting reasonably – for both Owners and Builder – in every case.
Making an offer is a matter of expertise as to the exact terms, and whether or not it qualifies as reasonable – the Builders offer was not reasonable.
Case Note – Can the Builder Return & Fix:
In a current matter a Builder client of ours was locked out on the basis that the Builder had exceeded the building period. Using the default provisions in the Contract the Owners’ lawyer sent the Builder a “Notice of Default” carefully worded to comply with the law. Completion was due on 17 September 2013 and the building works were not complete by 19 November 2015. The Builder claims it was waiting for decisions to be made by the Owners. The Owners claim the Builder asked for payment of Progress Claims before the payments were due to be paid.  Subsequently the Owners’ lawyer served a Notice of Termination. Our argument is that the Notice of Termination is invalid and therefore is repudiation of the Contract by the Owners which would entitle the Builder to the money owing and damages for loss of profit.  The cheapest option is a commercial settlement – if we can get one.
It would be cheapest for both parties if a compromise could be reached as to what amount, if any, is paid to the Builder and the Builder goes back and finishes the work – or some variant of that is able to be negotiated.
In our case the Builder was waiting for a decision by the Owners on what type of roof should be installed on a pergola but as the Builder had finished all other building works for a Lock-Up Stage payment claim – the Builder claimed the Lock-Up Stage payment.  The Builder also claimed the Fixing Stage payment because that work (in the house) was completed too.
The case of Cardona & Anor v Brown & Anor [2012] VSCA 174, an Appeal case in the Victorian Supreme Court decided that a Builder can only ask for Progress Payments in the order fixed in the Contract. So if the Builder is waiting for the Owners to make a decision on the roof (tiles or colour bond) before putting on the roof the Builder cannot claim Lock-Up Stage payment or any part of it unless all the roof is on – even if the Builder has gone on with the building works and completed all work necessary to be able to claim Fixing Stage. The Builder has to finish Lock-Up Stage before being entitled to claim Fixing Stage.
The answer might be to have the parties sign a variation to the Progress Payment stages which will permit – by the variation – a reduced amount to be paid for a partial Lock-Up Stage and provides for some of that payment to be set aside until the owners make a decision.
Another option is for the Builder to suspend the building works and claim an extension of time until such time as the owners provide written instruction in respect to the type of roof selected.
Another option in Victoria is for the Builder to suspend the building works and claim an extension of time – as above but also put the owners on notice that if the decision is not made within (a reasonable time), for example, 14 days, an application can now be made to Domestic Building Dispute Resolution Victoria (DBDRV) (go to https://www.dbdrv.vic.gov.au/dispute-resolution-process) who will if the dispute is too complex issue a Certificate for the dispute to be referred to VCAT for an order directing a variation to the Progress Payment amount/s for the Lock-Up Stage and also provide for some of that Lock-Up Stage payment to be set aside until the owners make a decision. The type and variety of orders that can be sought will depend on each set of circumstances in each case.
Contact us at admin@hls.net.au if you need to make an application to DBDRV or draft a Variation or special conditions to allow variation of the Progress Payment Schedule.

This article provides information that is general in nature and is not a substitute for legal advice.

What is Spousal Maintenance?

Spousal maintenance is a payment made by one spouse/de facto partner to another for the maintenance of that person.

Spousal maintenance is not an automatic right.

Section 72 of the Family Law Act 1975 states that:

A party to a marriage is liable to maintain the other party, to the extent that the first-mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:

1. By reason of having the care and control of a child of the marriage who has not attained the age of 18 years;

2. By reason of age or physical or mental incapacity for appropriate gainful employment;

OR

3. For any other adequate reason.

A party may apply to the Court for an Order for spousal maintenance 12 months from the date of divorce or 24 months from the date of separation in the case of a de facto relationship.

It is common for parties to remain separated but not apply for a divorce. If that is the case, then there is a danger that one spouse may make a claim for spousal maintenance against the other even though the parties may have separated for a long time.

Spousal maintenance payments are generally separate to the property division between parties although they may sometimes form part of the property division/settlement.

 

For more information about spousal maintenance, speak with one of our lawyers today.

 

This article provides information that is general in nature and is not a substitute for legal advice.