Ten Tips for Disclosure

Ten tips for disclosure required under the Legal Profession Uniform Law (NSW):

1. Disclosure is not required where the law practice’s professional fees will be less than $750 exclusive of GST.
2. Where the law practice’s professional fees will be greater than $750 but less than $3000 exclusive of GST, disclosure may be made by way of the standard disclosure form published by the Legal Services Council, and must disclose the basis on which legal costs will be calculated and an estimate of the total legal costs.
3. Full disclosure is required if the law practice’s fees will be more than $3000 exclusive of GST, including notification of a client’s rights to negotiate a costs agreement, to negotiate the billing method (eg. by reference to timing or task), to receive a bill and request an itemised bill, and to seek assistance from the designated local regulatory authority in the event of a dispute about legal costs.
4. A single figure estimate is required for disclosure of the total legal costs – a range of estimates is not compliant.
5. The “total legal costs” to be disclosed includes professional fees, any disbursements, any uplift fee (where applicable) and GST and must disclose the basis on which the costs will be calculated – eg. GST is calculated at 10% of total professional fees.
6. Disclosure must be made in writing, when instructions are initially given in a matter or as soon as practicable after.
7. Updated disclosure is required during the course of a matter if professional fees increase from below $750 to within the range of $750 to $3000 (simple disclosure), or from below to above $3000 (full disclosure).
8. Updated disclosure is also required when “there is any significant change” to the basis on which legal costs will be calculated in the matter and an estimate of the total legal costs, and should be made when or as soon as practicable after the change has occurred.  A client should be notified of the change, any significant change to the total legal costs payable by the client, and“a sufficient and reasonable amount of information about the impact of the change on the legal costs that will be payable to allow the client to make informed decisions about the future conduct of the matter”.
9. Where another law practice is retained on behalf of a client (eg. a barrister), the first law practice must provide all relevant disclosure to the client concerning the second/retained law practice’s legal costs.
10. Where full disclosure is required (ie. where the law practice’s fees will be more than $3000 exclusive of GST, the law practice must take all reasonable steps to satisfy itself that the client has understood and given consent to the proposed course of action for the conduct of the matter and the proposed costs.

The Uniform Law provides that if a law practice does not comply with its disclosure obligations:

• the costs agreement concerned (if any) is void;
• the client is not required to pay the legal costs until they have been assessed or any costs dispute has been determined by the designated local regulatory authority;
• the law practice must not commence or maintain proceedings for recovery of any or all of the legal costs until they have been assessed or any costs dispute has been determined by the designated local regulatory authority or under jurisdictional legislation; and
• the contravention is capable of constituting unsatisfactory professional conduct or professional misconduct on the part of any principal of the law practice or any legal practitioner associate or foreign lawyer associate involved in the contravention.

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