Lawyers comment on costs changes

The Family Law Section of the Law Council of Australia (the peak body representing family lawyers in Australia) has commented on the proposed costs changes in the Family Court:

3 May 2007
The Hon Justice Diana Bryant
Chief Justice Family Court of Australia
GPO Box 9991 MELBOURNE VIC 3001
Dear Chief Justice
Practitioner and client costs

At its recent meeting the Executive of the Family Law Section (FLS) considered your letter dated 13 February regarding the proposed amendments to the Family Law Rules to have the effect of the Court ceasing to regulate practitioner and client costs. FLS noted your outline of the proposed transitional arrangements, and that you had invited Law Societies and Bar Associations in each State and Territory to channel their comments through FLS.

FLS considered the proposed amendments and also comments which had been received from the Law Societies of South Australia, Western Australia and from the Law Institute of Victoria. Individual comments were also received from solicitors in Western Australia and New South Wales.

FLS has incorporated all of those responses in the following comments:

1. FLS supports the effect of the proposed measures for reasons which have previously been enunciated;

2.FLS considers that practitioner and client costs in family law matters should be regulated by the legislation governing the legal profession just as they are in other areas of legal work;

3. FLS understands the need for transitional arrangements to cover two situations: (a) Disputes which may arise concerning costs in matters which commenced before the repeal of the Rules and had continued after the repeal;(b) Costs agreements entered into before the repeal regarding matters which continued after the repeal.

4. We note that costs proceedings commenced before 1 July 2008 which continue beyond that date will be covered by the current Rules.

5. As we understand it the theme of the transitional arrangements proposed are,essentially, that costs proceedings commenced after 1 July 2008 will not be subject to the provisions of the existing Rules.

6. We note that from 1 July 2008 the costs agreement provisions of the Family Law Rules cease to have effect. The relevant State and Territory law will apply to agreements entered into after that date. Agreements already in place prior to 1 July 2008 will continue in full force and effect until the finalisation of the application.

7. FLS supports the proposed transitional arrangements relating to costs agreements set out in paragraphs 1 to 3 of your letter but wonders about the necessity for the transitional provision set out in paragraph 4. Consistent with submissions received from the Law Institute of Victoria and a practitioner in New South Wales, FLS considers that the proposed transitional provision in relation to costs agreements is too complex. It is suggested that it would be simpler to repeal the costs agreement rules effective from 1 July 2008 in respect of all agreements entered into after that date, without the further transitional provision which is proposed to relate to agreements entered into between January and July 2008.

8.However FLS is aware that the model legal profession laws are yet to be enacted in Tasmania, South Australia, Western Australia and the Northern Territory. In the ACT, New South Wales, Victoria and Queensland the legislation has been passed but is under review and subject to amendments as the legislation continues be scrutinised by the Standing Committee of Attorneys’ General. There is no certainty that all States and Territories will have passed their legislation, including the costs agreement provisions before 1 July 2008. It may be that the Court needs to keep this under review as it would be undesirable if a lacuna were to be created in some jurisdictions if the Court repealed its Rules without local laws governing the same matters being in place.

9. There were some other issues raised in submissions from constituents which we wish to pass onto you without necessarily endorsing those views:
(a) A Western Australian practitioner said that the proposal may have adverse consequences for country practitioners because taxation of costs in family law matters can be conducted in the country by Family Court Registrars whilst on circuit whereas Supreme Court Registrars do not go on circuit. FLS considers that whilst there may be something in this comment it should not prevent the proposed amendment. (b) A New South Wales practitioner of more than 30 years experience commented that the Court should withdraw from the regulation of the party and party costs as well as solicitor/client costs. Whilst this move may bear some consideration, FLS does not endorse such a move at this time. If the Court gave consideration to this proposal FLS would like to be involved in those discussions.
(c) The Law Institute of Victoria considered that the transitional provisions were largely unnecessary. They comment that there is a significant overlap between the Family Court Rules and the Legal Profession Act 2004 (Vic).FLS understands that the same situation does not necessarily apply in all States and Territories, as detailed above, and some transitional provisions are required.

10. In your letter you query whether the topic of costs would be a useful one for CLE,and in particular for the 13th National Conference in Adelaide in 2008. I will forward a copy your letter and my response to the 2008 Conference Organising Committee for consideration.

11. The effect of the passage of the national professional legislation together with the withdrawal of the Family Court from solicitor/client costing, is that the laws governing the relationship between family lawyers and their clients are the same as the laws governing all other lawyers. In other words family lawyers do not have any different rights and obligations vis-à-vis their clients than do any other lawyers. The obligations in relation to disclosure, bills of costs, costs agreements, and notices of rights are the same for all lawyers including family lawyers. Moreover though there is a large degree of uniformity, the legal profession legislation in each State and Territory may potentially differ in this area. It is conceivable that we may have eight sets of rules all slightly different.

12. FLS has decided that it will no longer produce a recommended costs agreement,and hopes that either the Law Council will develop an agreement for use in all States and Territories or that each State and Territory will do so. Inherent in the changes are different costs assessment provisions in all jurisdictions.

13. FLS understands that each State and Territory Law Society and Bar Association will be holding seminars for its members in relation to this subject and given the possible disparity of the legislation around the country the FLS thinks this is an appropriate way for the profession to become acquainted with the changes in the costs provisions. However, in addition to this, FLS has included a session on this topic in the upcoming Melbourne Family Law Intensive. Justice Benjamin and Denis Farrar will make a thirty minute presentation on the proposed new regime.

14. We would also be happy to provide information to our members through Australian Family Lawyer and FLS Online News.

15. We look forward to the opportunity to comment on the draft rules to implement these amendments.

Yours sincerely

Geoffrey Sinclair
Deputy Chair