It is important that practitioners have a clear understanding of the distinction between the old Principles of Charging under the Rules of Professional Conduct for Barristers and Solicitors and the new Reasonable Fee Factors under the Lawyers and Conveyancers Act 2006.
It is also important to appreciate the changes to the way in which cost complaints by the public are now handled and in particular, the fact that these changes are not limited merely to a change in semantics in that cost revisors are now called costs assessors:
1. Section 132 (2) of the Lawyers and Conveyancers Act 2006 (the Act) provides that any person who is chargeable with a bill of costs may complain to the NZLS complaints service about the amount of any bill of costs rendered by a lawyer or former lawyer or an incorporated firm or former incorporated firm (a barrister is defined in the act as a lawyer). There is no separate part in the act relating to fee revisions. A cost complaint is, in the main, treated in the same way as any other complaint.
2. The Lawyers and Conveyancers Act (Lawyers: Complaints Service and Standards Committees) Regulations 2008 states that any person who is chargeable with a bill of costs whether it has been paid or not, may complain about the amount of the bill of costs rendered by the lawyer unless:
. The bill of costs was rendered more than 2 years prior to the date of complaint (Reg 29); or
. The bill of costs is for a sum that is less than $2000 exclusive of GST (Reg 29)
Notwithstanding these exceptions, a Standards Committee may determine that there are special circumstances which would justify an enquiry into any bill of costs.
A cost complaint can be made by the "party chargeable". This may not necessarily be the person to whom the bill is addressed.
3. There is no longer any prohibition on complaining about a bill that has been paid.
4. Any interested party in any property out of which a trustee has paid (or is entitled to pay) the bill may complain about the amount of the bill. This means a beneficiary may now complain about a bill - this does not limit the right of a trustee, executor or administrator to complain (Section 160).
5. Cost Assessors act under delegated authority from the Standards Committee to consider the reasonableness of the fee. The cost assessor undertakes an analysis of the bill of costs and the client file and prepares a report for the Standards Committee providing the cost assessors opinion as to a fee which is fair and reasonable or a range within which a fee would be considered fair and reasonable. Unlike the role of the cost revisor which was relatively narrow, cost assessors are now expected to advise the Standards Committee on anything else that has emerged from their enquiry that they consider relevant for the purpose of assisting the Standards Committee with the enquiry into the fees complaint.
6. The Standards Committee will consider the report and then issue a certificate confirming its finding. The certificate is final and conclusive as to the amount due subject to review by the Legal Complaints Review Officer. The parties are notified of the outcome.
7. For a Standards Committee to reduce a bill of costs it must first make a finding of unsatisfactory conduct. It is not part of the responsibility of a delegated costs assessor to make a determination concerning unsatisfactory conduct.
8. A Standards Committee has power to direct the parties to negotiation, conciliation or mediation. It may be that a Standards Committee will in certain matters suggest this process rather than referring the complaint to a cost assessor. There is however no power to compel parties to attend mediation.
9. As with the Law Practitioners Act, the Lawyers and Conveyancers Act imposes a stay of proceedings (Section 161)(1)) on recovery of the amount of the bill pending determination of the complaint.
10. The decision of the Standards Committee in relation to a cost complaint can be reviewed by the Legal Complaints Review Officer.
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