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Barrister, retainer

Keesing v Adams [2010] NSWSC 336. Brereton J. 16.03.10.

12 The present proceedings are brought to resolve the issue tendered in effect by the costs assessor, namely, whether the costs agreement was one between Mr Keesing and the solicitors, or between Mr Keesing and the lay client Mr Ramsay.

13 Conventionally, a barrister was not entitled to sue for his or her fees, which were regarded in law as an honorarium and in ethics as a debt of honour due by the solicitor to the barrister, but not legally enforceable.

This was because there was no contract between the barrister and either the instructing solicitor or the lay client.

The authorities in this territory were helpfully reviewed by Lockhart J in Re Sharp; Ex Parte Donnelly [1998] FCA 6. The leading case was that of Kennedy v Broun [1863] EngR 136; (1863) 13 CB NS 677; 143 ER 268, in which Erle CJ said (at 287):

"We consider that a promise by a client to pay money to a counsel for his advocacy, whether made before, or during, or after the litigation, has no binding effect; and, furthermore, that the relation of counsel and client renders the parties mutually incapable of making any contract of hiring and service concerning advocacy in litigation.

14 As a result of there being no contract between barrister and solicitor or client, there was no legal basis on which the barrister could recover fees from either: Moore v Row [1629] EngR 16; [1629] 1 Rep Ch 38; 21 ER 501; Wells v Wells [1914] P 157; Morris v Hunt.

15 This was stated as recently as 1969 by the House of Lords in Rondel v Worsley [1969] 1 AC 191 in which Lord Morris of Borth-y-Gest said (at 236):

"It has for long been considered to be settled law that a barrister may not and does not enter into any contract which enables him to sue for his fees.

16 In the same case, Lord Pearce said (at 262):

"The long line of decisions that a barrister cannot sue for his fees ... is consistent. And, in my opinion, it is firmly based on sound policy

17 And in the New South Wales case of Re Neville; Ex Parte Pike [1896] 17 NSW (B&P) 24, Manning J said (at 26):

"A barrister is by law incapacitated from entering into a contract of any kind, either with solicitor or client, in respect of fees, for, at all events, litigious work as a barrister.

18 Those cases, to my mind, establish that until the intervention of legislation the inability of a barrister to recover fees was not just a consequence of public policy holding that a barrister should not be entitled to sue for fees, but of recognition that the way in which barristers practised was not to perform legal services on a contractual basis.

In the absence of a contract, there was no legal basis upon which fees could be recovered.

19 There was no rule of law preventing a litigant from instructing a barrister directly or preventing a barrister from appearing on direct instructions – only a professional practice required that counsel should take instructions from solicitors: Doe d Bennett v Hale [1850] EngR 508; (1850) 15 QB 171; 117 ER 423.

But as that case held, that practice was seen to be a beneficial one, to be maintained, and under that practice the barrister looked to the instructing solicitor and not to the lay client for fees: Re Wilton (1843) 13 LJQB 17.

20 A solicitor acting under a general retainer had authority to instruct counsel and pay counsel's fees: Morris v Hunt [1819] 1 Chit 544, 555; Dimos v Hanos [2001] VSC 173, but this authority did not extend to making a contract on behalf of the client with the barrister:

The solicitor's retainer allowed the solicitor to retain counsel, but did not authorise the solicitor to enter into a contract on behalf of the client with the barrister: Dimos v Hanos; Levy v Bergseng [2008] NSWSC 294, 72 NSWLR 178, [122].

21 Legislation now permits a barrister to contract with a client, or with a solicitor, and to sue on such a contract.

The legislation applicable for the purpose of the present case, which occurred before the commencement of (NSW) Legal Profession Act 2004, is (NSW) Legal Profession Act 1987, in which s 38I provided as follows:

38I Client Access ...

22 While s 38I permitted a barrister to enter into a contract for legal services for the provision of legal services with a solicitor or a lay client, it did not require the barrister to do so.

The result, in my view, was that a barrister could continue if he or she wished, generally or in any particular case, to render legal services on the conventional non-contractual basis, or could choose to render legal services generally or in a particular case on a contractual basis by entering into a contract for provision of legal services with a client.

If the barrister rendered services on the conventional basis, the fee would not be recoverable at law, because there would be no contract on which a barrister could sue.

23 In Re Sharpe; Ex Parte Donnelly, Lockhart J observed that the 1994 Legal Profession Act, though not expressly stating that a barrister may sue for the recovery of the fees, impliedly assumed that right in s 184, s 191 and s 192. His Honour does not appear to have been referred to s 38I.

In my view, the correct position is that a barrister who chooses to enter into a contract for legal services can, by way of s 38I, recover his or her fees at law pursuant to that contract.

A barrister who elects to render services on the conventional non contractual basis would not be entitled to recover fees at law and would be left to the traditional extra curial remedies.

24 As well as providing for barristers to enter into contracts for legal services, the 1987 Act also provides for a barrister, as well as a solicitor, to enter into a costs agreement, with the instructing solicitor or with the lay client.

“Costs agreement" defined by s 173 to mean an agreement referred to in s 184 "as to costs for the provision of legal services".

Section 184 [ed:of the former statute] provided as follows: ...

25 Again, it is notable that such an agreement is described as "an agreement as to the costs of the provision of legal services" and may form part of, but is a distinct concept from, a contract for the provision of legal services.

The practical and legal effect of a costs agreement is to be found in s 208C, which provided as follows: ...

26 Thus it will be seen that the practical consequence of there being in force a costs agreement is that, if the costs agreement is one that provides a lump sum or total amount for the costs of the work to be done, those costs are not subject to assessment, and if the costs agreement specifies the rate specified, then the rate is not subject to assessment.

In other words, the practical effect of a costs agreement is to remove from the scope of an assessment the capacity of the client to dispute the quantum of the gross fee or the quantum of the rate charged, as distinct from the reasonableness or the performance of individual items of work comprising a whole bill charged according to a rate.

That is the sole function of a costs agreement. It is an agreement "as to the costs of the provision of legal services" because it is an agreement as to what the costs of those services will be.

27 The 1987 Act also provided for disclosure of costs and obliged a barrister as well as a solicitor to disclose to a client the basis of the costs of legal services to be provided.

Section 175 (3) provided that disclosure to a client is not required to be made by a barrister who is retained on behalf of the client by another solicitor; however, the disclosure to the client by the solicitor had to include the costs of the barrister so retained, and s 176 (1) provided that a barrister retained on behalf of a client by a solicitor must disclose to the solicitor the basis of the costs of legal services to be provided to the client by the barrister.

Accordingly, there was no requirement for a barrister retained by a solicitor to disclose his or her fees directly to the lay client, but there was an obligation to disclose to the instructing solicitor.

28 It should also be noted that s 192 prohibited the institution of proceedings for the recovery of costs by a barrister or solicitor unless 30 days had passed since a bill was given.

In Re Sharpe, Lockhart J thought this indicative of an implied right of a barrister to sue for his or her fees.

I agree, but qualify that agreement with the observation that that is applicable where the barrister is rendering legal services on a contractual basis, but not otherwise.

29 Of some significance is s 201, which provided that a barrister or solicitor who is given a bill of costs may apply for an assessment of those costs.

Upon completion of the assessment, the assessor issues a certificate setting out the determination, which, upon filing in a court of competent jurisdiction, has effect as a judgment of that court for the amount of unpaid costs : see s 208J.

30 As I have mentioned, a costs agreement is not a contract for legal services although it may be included in one.

It has the very limited function of excluding from the scope of assessment the quantum of a lump sum fee or of an agreed rate.

The mere entry of a practitioner and client into a costs agreement does not create a liability to pay costs where otherwise there is no liability.

However, because the purpose of a costs agreement is to exclude the agreed matters from the scope of any assessment, and because the purpose of assessment ultimately is to culminate in a legally enforceable judgment, it seems to me that the entry into a costs agreement is a strong indication, though not an absolute one, of an intention that the practitioner is to render services on a contractual basis, such that his or her fees be recoverable pursuant to the assessment process.

If it were not so, it is difficult to see any utility in entering into a costs agreement.

31 Where a barrister does render services on a contractual basis, there will be a question as to whether the contract is with the solicitor or the lay client.

This question was considered by the Supreme Court of Victoria in Dimos v Hanos, in which a Magistrate had held that there was a presumption that any such contract was between the barrister and the solicitor.

On appeal to the Supreme Court, Gillard J held there was no such presumption.

As His Honour said, [37]:

"What the Magistrate said may be the effect of the evidence in the particular circumstances of the case, but it is not a principle of law, and cannot be stated as a general rule of law or fact.

"By stating that as a general rule, the Magistrate misdirected himself.

32 But although holding that there was no such presumption, Gillard J ultimately came as a matter of fact to the same conclusion. His Honour said: [eds: refer paras [99]-[103] and [106-107], then, in [108]

"[Subject to evidence to the contrary, the retainer between solicitor and client authorised the solicitor to retain counsel, but that authority did not extend to bringing into existence a contract between the barrister and the client.

34 It was that principle that was endorsed by Rothman J in Levy v Bergseng, to which I have referred.

35 On questions of professional legal practice, a court does not need to have evidence, but can resort to its own knowledge of professional practices and standards.

This is frequently seen in legal professional negligence cases, where in – distinction from, for example, medical negligence or architectural negligence cases – there is no need for a plaintiff, except perhaps in specialist areas of the law, to adduce expert evidence of a departure from appropriate standards: see, for example, Dickson v Creevy [2002] QCA 195.

36 Although, in some respects, a solicitor is an agent for his or her client, and although the cases to which I have referred show that a solicitor has authority to retain a barrister, that authority does not extend to making a contract on behalf of the client with the barrister.

Centuries of practice dictate that the solicitor is treated as the party to whom the barrister ordinarily looks for his or her fees and is primarily liable for that fee, even only if in honour and not at law.

In the absence of what Gillard J described as evidence to the contrary, an informed observer knowing of the historical practices of barristers and solicitors would ordinarily conclude from the delivery of a brief by a solicitor to a barrister, in a case that is not a direct access case, that any contract was made with the solicitor. ...

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