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Boutique’s attempt to recover $150k blocked by costs assessor
A court was asked to step in when a boutique firm’s bid to recover almost $150,000 from a client was stalled because a costs assessor refused to accept one of its three applications for review.
Naomi Neilson
Boutique firm Dive Lawyers, based in both Sydney and Singapore, turned to the NSW Supreme Court when a costs assessor manager refused to accept one of its applications for a costs assessment because it was filed just over a week after the deadline.
Dive Lawyers assisted a woman between May 2020 and sometime in late 2021 with a dispute she had with her former solicitors.
In that time, the client racked up four bills in the sum of $147,909.59 but had not paid any amount. The fee is still outstanding.
The attempts to recover the sum were stalled when the client made a complaint to the Office of the Legal Services Commissioner (OLSC) and claimed she referred the invoices to a costs assessor.
One year later, OLSC closed the costs dispute part of the complaint.
The rest of the complaint was closed, and the firm received a caution over its failure to provide the client with a written costs estimate.
Shortly afterwards, the firm tried to file three costs assessments, with one immediately accepted and the second eventually accepted several months later. The third was knocked back.
The manager said the current interpretation of the Legal Profession Uniform Law excluded an extension of time being considered for law practices, and it only applied “to clients and third-party payers”.
Dive Lawyers submitted the manager was wrong and the third application should have been accepted “for at least consideration of whether an extension of time should be granted”.
Justice Michael Elkaim reviewed the Uniform Law and concluded section 198 – which concerns applications for costs assessments – does not “provide an explanation of why a law practice is not able to apply for a determination” but a client or third party can.
“It may be that there is an element of consumer protection, but that does not explain depriving a law practice of rights given to clients and third-party payers,” Justice Elkaim said in his reasons for judgment.
“A law practice, in particular a small practice as seems to be the case here, is just as likely to miss an important date as a consumer.”
Justice Elkaim said the same section should permit an application to be at least determined by a costs assessor.
“It would be no answer to this procedure to say that an application could not be filed as it was out of time, because section 198 clearly contemplates the first defendant dealing with an application which has been filed by a client or third-party payer who has also made an application regarding determination concerning a late filing,” he said.
Justice Elkaim set the decision of the manager aside and ordered the third costs assessment to be accepted for filing.
Naomi Neilson
Naomi Neilson is a senior journalist with a focus on court reporting for Lawyers Weekly.
You can email Naomi at:
