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Conduct and Costs

Conduct and Costs

By Steven Sapountsis

Courts Finance Uniform Laws 

Recent decisions of the Supreme Court of Victoria sound a clarion call to lawyers to carefully and critically assess the work and evidence required to run or defend a matter at the start of the matter, as costs charged for that work may not be recoverable if they are assessed to have been disproportionately incurred. There are two statutory provisions requiring lawyers to charge or incur costs that are “proportionate” to issues in a matter. Section 172(1) of the Legal Profession Uniform Law 2015 allows only the charging of costs that are fair and reasonable and which are: proportionately and reasonably incurred; and proportionate and reasonable in amount. Section 24 of the Civil Procedure Act 2010 (the Act) provides that it is an overarching obligation of parties and their lawyers to “use reasonable endeavours to ensure that legal costs . . . are reasonable and proportionate to: the complexity or importance of the issues in dispute; and the amount in dispute”. An assessment of whether costs charged breach s172 of the Uniform Law is likely to be made by the Costs Court at the end of a matter, taking into account the contractual arrangement between the lawyer and the client and a range of factors affecting how a matter was conducted. An assessment of compliance with s24 of the Act is less constrained, can be made at any time during a proceeding, and can be made with a court’s critical retrospective adjudication of what work was necessary to advance the matter. The assessment is made pursuant to s29 of the Act which empowers a court to make a wide range of punitive and compensatory orders where the court finds a breach of the overarching obligations.

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