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APPENDIX C

Legal Practice Act 1996 (Victoria) sections 96–99 and 101–103

96. Making costs agreements

(1) A costs agreement may be made–

(a) between a client and a legal practitioner or firm retained by the client; or

(b) between a client and a legal practitioner or firm retained on behalf of the client by another legal practitioner or firm; or

(c) between a legal practitioner or firm and another legal practitioner or firm that retained that practitioner or firm on behalf of a client.

(2) A costs agreement must be written or evidenced in writing.

(3) A costs agreement may consist of a written offer that is accepted in writing or by other conduct.

97. Costs agreements may be conditional on success

(1) A costs agreement may provide that the payment of some or all of the legal costs is contingent on the successful outcome of the matter to which those costs relate.

(2) An agreement referred to in sub-section (1) is called a “conditional costs agreement”.

(3) A conditional costs agreement may relate to proceedings in any court or tribunal, except criminal proceedings or proceedings under the Family Law Act 1975 of the Commonwealth.

(4) A conditional costs agreement–

(a) must set out the circumstances that constitute a successful outcome of the matter; and

(b) may exclude disbursements from the legal costs that are payable only on the successful outcome of the matter.

(5) A legal practitioner or firm must not enter into a conditional costs agreement unless the practitioner or a partner of the firm has a reasonable belief that a successful outcome of the matter is reasonably likely.

98. Uplifted fees are allowed

(1) A conditional costs agreement may provide for the payment of a premium on the legal costs otherwise payable under the agreement on the successful outcome of the matter in respect of which the agreement is made.

(2) The premium must be a specified percentage of the legal costs otherwise payable, and must be separately identified in the agreement.

(3) A legal practitioner or firm must not enter into a conditional costs agreement under which a premium, other than a specified percentage not exceeding 25% of the costs otherwise payable, is payable on the successful outcome of any matter involving litigation.

Penalty: 100 penalty units.

99. Contingency fees are prohibited

(1) A legal practitioner or firm must not enter into a costs agreement under which the amount payable to the legal practitioner or firm under the agreement, or any part of that amount, is calculated by reference to the amount of the award or settlement or the value of any property that may be recovered in any proceedings to which the agreement relates.

Penalty: 100 penalty units.

(2) Sub-section (1) does not apply to the extent that the costs agreement adopts an applicable scale of costs of a court or tribunal.

101. Effect of costs agreement

(1) Subject to this Division and Division 4, a costs agreement may be enforced in the same way as any other contract.

(2) To the extent that it provides for legal costs to be paid according to a practitioner remuneration order or scale of costs of a court or tribunal, a costs agreement is subject to assessment under Division 5.

(3) The procedure in Division 1 of Part 5 may be used to resolve a dispute over an amount claimed to be payable to a legal practitioner or firm under a costs agreement unless the practitioner or firm has commenced proceedings for recovery of the disputed amount.

102. Certain costs agreements are void

(1) A costs agreement that contravenes any provision of this Division is void.

(2) Subject to sub-section (3), legal costs under a void costs agreement are recoverable as set out in section 93(b) and (c).

(3) A legal practitioner or firm that has entered into a costs agreement in contravention of section 97(5), 98(3) or 99 is not entitled to recover any amount in respect of the provision of legal services in the matter to which the costs agreement related and must repay any amount received in respect of those services to the person from whom it was received.

(4) If a legal practitioner or firm does not repay an amount required by sub-section (3) to be repaid, the person entitled to be repaid may recover the amount from the practitioner or firm as a debt in a court of competent jurisdiction.

103. Cancellation of costs agreement

(1) On application by a client, the Tribunal, constituted by the registrar or deputy registrar, may order that a costs agreement be cancelled if satisfied–

(a) that the client was induced to enter into the agreement by the fraud or misrepresentation of the legal practitioner or firm; or

(b) that the legal practitioner or firm has been guilty of misconduct or unsatisfactory conduct in relation to the provision of legal services to which the agreement relates; or

(c) that the agreement is not fair and reasonable.

(2) The Tribunal may adjourn the hearing of an application under this section pending the completion of any investigation or charge in relation to the conduct of the legal practitioner or firm.

(3) If the Tribunal orders that a costs agreement be cancelled, it may make such order as it thinks fit in relation to the payment of legal costs the subject of the cancelled agreement, taking into account the seriousness of the conduct of the legal practitioner or firm.

(4) The Tribunal may order the payment of the costs of and incidental to a hearing under this section and, for that purpose, sections 162 and 164 apply accordingly.