Years ago when the world was young and I was green I had the pleasure of hearing a - rather agitated - fellow member of the legal profession declare to the Supreme Court Taxing Master that legal costing was “a species of witchcraft”. I liked that, but I think that my learned friend rather understated the case. Legal costing is not mere witchcraft, it is a Black Art. To many lawyers it is what the law in general is to the lay public; obscure, confusing, slightly menacing but always present somewhere in the background. There are others who dismiss the whole subject as boring (practitioners of other arcane disciplines like wills drafting) or sordid (workers in community legal services) or trivial (partners in mega-firms).
If you really have no interest in costs, stop reading now and return to my home page, but not before you’ve made a note of where to contact Ashby Smyth & Co. (see bottom of page) as a resource for the day when reality lands on your desk in the form of a Summons for Taxation.
On the other hand, if you can't resist reading on, we're all lawyers here so please first read our DISCLAIMER
Questions from readers are welcomed, just bear in mind that this site (which will be under constant construction) is intended to provide information of a general nature, not legal advice to be acted on in specific situations.
In fact party/party costs are an indemnity - to the client, not the solicitor. They are that portion of the total costs (including disbursements) payable to the solicitor which can be recovered from the unsuccessful party. Think - Australian readers - of your Medicare rebate; the schedule rebate is to the medico’s actual fee what party/party costs is to solicitor/client costs.
Working out just exactly what the portion might be is what keeps the likes of Ashby, Smyth & Co. in business, not to mention the Supreme Court Taxing Master and an assortment of Registrars in other courts. It all comes down to the distinction between “reasonable” and “necessary”.
I do not think I can do better than Malins V.C. in Smith v Buller (1875) 19 Eq., p. 475 who said that “costs chargeable under a taxation between party and party are all that are necessary to enable the adverse party to conduct the litigation and no more. Any charges merely for conducting the litigation more conveniently may be called luxuries, and must be paid by the party incurring them.”
Not ordinary postage, nor ordinary phone calls. The cost of postage, the same as the cost of the envelope, is factored into the scale charge for a letter.
In fact, the practice - still far from extinct - of charging a little something for "postage, petties and sundries" has been expressly forbidden for years by the Law Institute of Victoria and there are many auditors who consequently take a dim view of any instances that they come across.
However, this prohibition only applies to ordinary postage or telephone charges. If you have to send an article by registered post or airmail, or if you make an STD or ISD call then the charges may be passed on.
The Full Court of Western Australia has ruled that past consideration is not a bar to the validity of a cost agreement: D Angelo & Partners v Cooper (lib no 960334 ). Whether an agreement does have that effect depends on the wording of the agreement. The Court may infer from the circumstances that the parties intended to have a retrospective effect. In the Cooper case the agreement had been signed after trial. Little future work remained to be done. The Court (per Anderson J) made clear that it was not being asked to rule on whether an agreement in these circumstances was reasonable . Kennedy J was not prepared to rule on the issue as the evidence before him was not considered adequate. Rowland J followed Anderson J in principle but had doubts about the evidence in this case. More details appear in the Costs newsletter for June 1996 (Law Society of WA Perth). David Garnsworthy 15 July 1996
The recovery of interstate legal costs has for many years been a problem.
The decision of the Northern Territory Court of Appeal in Howard v
Herbert can open the way to greater recovery. Gallop J held that lack of
Territory qualifications was not a bar to recovery of costs relating to
Adelaide practitioners. Thomas and Kearney JJ agreed. The reasons of
Gallop J point out that the Adelaide costs had been paid before taxation
and were therfore recoverable in any event. His Honour's reasons go much
further but need to be read carefully. Note His Honour has held that
Kearney Js decision in TNT Bulkships, except in regard to pre payment,
was wrongly decided. Thomas J agreed with those reasons. Practitioners
should also consider Minister for Works v Australian Dredging [1986] WAR
235 which appears to be to the contrary. Detailed analysis appears in
Costs Newsletter no 50 available through the Law Society of WA or e-mail
dgarns@lawsocietywa.asn.au.
David Garnsworthy 8 August 1996
Anyone who is at all interested in legal costs should subscribe to the Costs Newsletter, a unique publication that outstrips by a country mile the commercial looseleaf services. David scours the literature for developments in the law of costs, and provides very useful commentary. Absolutely essential for professional costs consultants!
Plaintiffs in personal injury and workcare matters are frequently impecunious and may well have a "no win, no pay" agreement with their solicitors, which can lead to some awkward dickering with Counsel over the unrecoverable balance of fees.
The Gippsland firm of Simon Parsons & Co. take a direct and apparently unique approach. They endorse their backsheets in these sorts of matters as follows:
As agreed you get paid what we recover from the other side when we get paid.
We are assured that they have no difficulty in finding suitable barristers willing to accept briefs on this basis.
ASHBY, SMYTH & CO.
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Last Updated: Thursday, 12 September 1996