A West Australian lawyer has been ordered to hand over more than $100,000 to a former client, after the state’s Supreme Court found the lawyer charged excessive amounts of money for work that was described as “wasted” and “inappropriate”.
Handing down his judgment yesterday, Supreme Court registrar Christopher Boyle found the lawyer, referred to in court documents as Mr K, charged his client, Mr M, more than $330,000 for legal representation in a family law dispute between November 2008 and April 2010.
But Boyle said Mr K “did not know what he was doing”, kept “unreliable” records and spent too much time undertaking administrative or clerical work, sometimes at an hourly rate of $270.
He therefore charged “substantially more than was reasonable or proper”.
Boyle ruled Mr K was only entitled to $220,000, as that amount would have adequately covered the amount of work if it was done by a competent and properly resourced legal practitioner, and ordered him to give back $110,000.
“That gives Mr K roughly two-thirds of what he claimed, and I think that properly reflects wasted or otherwise inappropriate work,” Boyle said.
While Boyle acknowledged the family law dispute between Mr M and his wife was “contentious and difficult” and Mr M’s legal costs were exaggerated by the behaviour of his wife and her legal team, he said Mr M was not experienced in family law and should either have not taken on the case or asked a more experienced practitioner to help.
Boyle referred to comments made by the Family Court judge that heard the dispute between Mr M and his wife, who questioned Mr M’s legal representation and the “staggering” amount of $1.1 million in legal costs accumulated by the two parties, which was “totally disproportionate to the pool of [their] assets”.
He also relied on written correspondence between Mr K and Mr M, which he said showed he was out of his depth, including a fax message in which Mr K referred to a proposed interlocutory application and said “at the end of the day, if we put up a good fight and lose, the Court will recognise how strongly you feel about the matter, but will realise it was difficult for you to get proof”.
“Words fail,” said Boyle.
“That observation shows in my view the practitioner’s identification with his client’s cause had overwhelmed both his professional objectivity and his understanding of the proper performance of his duties to the court.”
The registrar was particularly concerned with a number of items Mr K billed Mr M for, including a “particularly disturbing” item titled “research”, for which there was no record of what was researched but there were 200 units charged at $270 an hour.
Other charges detailed in the court documents include “collecting of documents”, charged at $120 an hour, printing two letters, charged at $270 an hour, and $378 for “providing a taxi service and having an affidavit sworn”.
The court also heard there was a 20 day period in which Mr K charged for more than 10 hours a day and on six occasions, he charged the client for 15 or more hours a day, including three days in which he billed for 20 or more hours.
“The inevitable conclusion is that Mr K’s time records cannot be accepted as uncorroborated evidence even of time spent, let along whether that time spent was properly chargeable to the client,” Boyle said.
Rohan Harris, partner at law firm Russell Kennedy, told SmartCompany many business owners who are paying for the services of a lawyer will be protected under laws that regulate legal practices and solicitors, although these laws differ between states.
Harris says in Victoria and New South Wales, for example, there are “quite extensive” cost disclosure requirements that lawyers must adhere to and if a dispute arises, there are formal avenues for the legal costs to be reviewed. In Victoria, this may be through the Legal Services Commissioner or the Victorian Civil and Administrative Tribunal.
Harris says the “vast majority” of small businesses will be covered by these protections, with the exempt categories mainly made up of larger firms.
Harris says any business owner who is concerned about how much they have been charged in legal fees should revisit the agreement that was signed between the two parties.
“If you are not happy, you need to go back to the agreement, talk with your solicitor and see if you can resolve the dispute,” he says.
But even before an agreement is signed, Harris says “business owners really need to protect themselves from day one”.
To do this he recommends business owners do some research on their lawyer, including finding out if they are an accredited specialist in a particular area, and find a reputable professional.
“The cheapest lawyer won’t always be the best lawyer,” he says.
Harris says it is also important for business owners to establish a “proper engagement process” with their lawyers.
“Everyone should be clear on first of all, what work will be done by the lawyer, what the lawyer needs to do that work effectively, what it is going to cost and how the costs will be determined,” he says.