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Overcharging still rife: report

Overcharging still rife: report

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The legal industry still has some work to do on overcharging clients, with a new report claiming the act is rife.

The legal industry still has some work to do on the practice of overcharging, with a new report claiming the act is rife.

Consumer organisation Choice has released a report claiming consumers are getting a “raw deal” from legal practitioners.

In one case examined by Choice a lawyer charged $750 for typing a three-page document and $40 for receiving a message to return a phone call.

In another case Russell, who engaged a lawyer acquaintance to handle his mother's estate , received a bill for almost $8000, with a costs disclosure document he claims he was not shown or told about previously.

And these cases are not alone. In the 2007-08 financial year, 827 complaints were lodged with Victoria’s Legal Services Commissioner relating to overcharging, while in South Australia almost 40 per cent of cases at the state’s Legal Practitioners Conduct Board related to overbilling.

In the same period, complaints about legal costs comprised 23.5 per cent of all written complaints received by the NSW Office of the Legal Services Commissioner (OLSC).

“The generalisation that lawyers over charge is the perception out there- it’s the challenge for lawyers to educate their clients and bring to the fore their value proposition,” said Mills Oakley Lawyers partner, Warren Scott.

“I think often while a client may raise it in a joking fashion there is some seriousness to it.”

Scott understands the concerns of consumers who are often unfamiliar with legal billing systems, but said consumers were starting to become more informed about the value of some legal services.

“I think people are seeing that paying a reasonably high hourly rate is acceptable as long as the practitioner has experience and is not learning on the job,” he said. “I think that they have a better understand these days of value for service.”

One of the main reasons overcharging occurs is because interactions with lawyers are often infrequent he said.  

“It is more project based work rather than an ongoing relationship.”

Scott claims seeing the wrong legal practitioner for the job can also lead to what can seem like exuberant fees.

“People are going to see a specialist in a particular area and getting charged accordingly. But often, people are going to see the micro surgeon instead of the general practitioner, when really a GP could have helped them.”

However, it’s not all bad news, with the increasing number of firms and more independent operators opening, Scotts predicts the increased competition will eliminate the unscrupulous operators.

If that doesn’t work, there are moves to reform the legal billing complaints system, which is currently overseen by 55 bodies across the country, to bring it under a national regulator. The reforms include uniform rules on lawyers’ trust accounts and costs disclosure, fines for any breaches of provisions adopted and a new regulation under which the principals of law firms – not their solicitors or any other person – would approve bills. The new legislation is expected to be drafted before May 2010.
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