“DODGY LAWYERS” became an issue of some contention between New South Wales’ first legal officer and a representative body of the legal profession last week, following a state-wide report into legal fees.
The Law Society of New South Wales criticised NSW Attorney General, Bob Debus’ claims that the report, Legal Costs in New South Wales, by the Legal Fees Review Panel discloses that the current system of fees and charges is a significant contributor to the rising cost of legal services.
But, Law Society president June McPhie claimed last week, the Panel’s report acknowledged that less than nine per cent of cost disputes are based on claims of solicitors’ overcharging, while the number of complaints upheld is even smaller.
“The report accepts that the vast majority of solicitors do comply with the compulsory costs disclosure and also operate ethically and professionally,” said McPhie.
In fact, other factors also contribute to the high cost of litigation, she said, and the report acknowledges these. “These include excessive case management procedures, filing fees, and costs associated with subpoenas, expert witnesses and reports. All of which are out of the solicitor’s control.”
But the message from the Attorney General was stern and clear in purpose: “Dodgy Lawyers and rapacious legal firms have been put on notice that the days of outrageous billing practices are over,” his statement said.
The report has called for a cultural change in the legal profession, said Debus. This will see improved communication and transparency between lawyers and their clients and the report recommends an end to the dominance of time billing, he said.
“Many hard working people fear the prospect of engaging legal advice or services and ending up with an enormous bill. The practice of time billing, equivalent of a running meter, on long and complex matters can see legal bills blow out to the tune of thousands of dollars for private clients and hundreds of thousands for corporate clients,” Debus said.
He argued that transparency is the key, and that “everyone, including the profession, wants to see an end to the rorts”.
But the Law Society’s McPhie argues the “rigorous” disclosure laws in place have helped to maintain transparency, accountability and consumer confidence in the legal market.
In 2004, NSW Premier Bob Carr called for an inquiry into the legal costs system, including a calculation of prices and an examination of the methods used to present bills to clients. The inquiry was also to examine the mechanisms through which a client can object to fees they consider unfair.
Carr said at the time that “everyone has an anecdote about a lawyer handing them an outrageous bill, after a relatively small matter”. He argued that the time had come for there to be more scrutiny in the area.
There are hundreds of complaints each year about “rogue law firms”, said Carr.
Now the report has been released, relevant parties are commenting on the recommendations — but for the Law Society, some of the recommendations are seen as unreasonable.
McPhie argued that the legal profession is already heavily regulated. “NSW was the first state in Australia to adopt compulsory costs disclosure in 1994 and the Law Society has since worked diligently to ensure that solicitors comply with their obligations to clients, and the Panel’s report confirms a high level of success in this endeavour,” she said.
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