The Legal Fees Review Panel will investigate law firms in NSW which rip off their clients with excessive fees. It will then report to the state government with recommendations on how to control the scale of legal fees and measures to keep them affordable for the average client.

NSW premier Bob Carr said the review had been established following more than 2760 written complaints about lawyers received by the Office of the Legal Services Commissioner (OLSC) last year. Of these, 20.3 per cent related to overcharging.

The majority of complaints related to allegations of negligence, which comprised 20.5 per cent, followed by poor communication, accounting for 15.8 per cent.

“Everyone has an anecdote about a lawyer handing them an outrageous bill, after a relatively small matter,” Carr said.

Recent examples of complaints to the OLSC included an elderly woman who received a card and phone call after the death of her husband from a family lawyer expressing sympathy. She later received a bill for both.

Another person’s lawyer billed them for 27 hours work in a single day and one senior partner charged $600 for photocopying.

“It is time there was more scrutiny in this area,” Carr said.

Shadow Attorney General Andrew Tink said that while he supports proposals to establish a Legal Fees Review Panel to target lawyers who overcharge, “I hope that the panel will also closely examine the Government’s attempts to increase court fees”.

“The Chief Justice recently expressed serious concern about lawyers who overcharge. His concerns must be fully investigated,” Tink said.

His comments followed Chief Justice Spigelman’s observations at the Opening of the Law Term dinner this month, which had in fact contributed to the decision to set up the Legal Fees Review Panel. “A handful of members of the profession exploit their positions by providing services that either do not need to be provided at all, or provide them in a more luxurious manner than is appropriate,” Spigelman said.

The panel will examine current legal costs and explore options for alternative methods, such as “value-based costing”, by which a client and lawyer determine exactly what is required and negotiate a cost on that basis.

The panel will examine how costs are calculated, how they are presented to clients, and how clients can object to fees that they consider unfair.