Legal fees worry a lot of people before they ever pick up the phone to a lawyer. Many clients are not sure what they will pay, how the bill will be worked out or what they can do if the final amount feels too high. The good news is that the law gives clients clear rights about costs. Knowing those rights makes it easier to compare lawyers and to ask the right questions early.
This guide explains costs disclosure, costs agreements and legal bills in plain terms. It covers what your lawyer has to tell you in writing and when. It also looks at itemised bills and the options you have if you disagree with a bill. Rules differ between states and territories, so treat this as a starting point.
Why the rules on legal costs differ by state
Lawyers in Australia are regulated at the state and territory level. That means the rules on fees depend on where your lawyer practises. New South Wales, Victoria and Western Australia share one set of rules called the Legal Profession Uniform Law. According to the Legal Practice Board of Western Australia, Western Australia joined the Uniform Law scheme on 1 July 2022.
The other states and territories have their own legal profession Acts. Their rules on disclosure and billing are similar in spirit but the details can vary. Thresholds, time limits and the name of the regulator may all be different. If your lawyer is outside the Uniform Law states, check the local regulator for the exact rules.
Fees must be fair and reasonable
Under the Uniform Law, a lawyer must not charge more than fair and reasonable amounts for legal costs. Several things are weighed when deciding what is fair. These include the skill needed, how involved the matter is, the urgency of the work and the time spent. The number of documents and the instructions you gave can also affect the cost.
Lawyers can charge in different ways. Some use an hourly rate while others quote a fixed fee for a set piece of work. Your lawyer should explain which method applies to your matter. You also have the right to negotiate both the costs and the billing method before work starts.
What costs disclosure means
A costs disclosure is a written estimate of what your lawyer expects to charge. It also explains how you will be billed. The estimate can be a single total or a range, with the main things that push costs up or down explained. Under the Uniform Law, how much detail you receive depends on the likely size of the bill.
The $750 and $3,000 thresholds
If your matter is unlikely to cost more than $750, your lawyer does not have to give you a written estimate. You can still ask for one if you want a clearer picture. Between $750 and $3,000, a lawyer can use a standard disclosure form. That form covers the expected work, the expected cost and the GST component.
Once the likely costs go over $3,000, the written disclosure must be much more detailed. It may cover trust money, how you will receive bills and what happens if the lawyer stops acting for you. The estimate should be given in writing as soon as practicable after you give your instructions. Keep a copy with your other papers for the matter.
When the estimate changes
Legal matters do not always go to plan. A dispute might settle early or it might run much longer than expected. Your lawyer must tell you in writing about any significant change to the costs they disclosed. This should happen as soon as possible, so you are not surprised when the bill arrives.
Costs agreements and no win no fee arrangements
A costs agreement is a more detailed written agreement about fees. It can be enforced like any other contract. In Victoria, you do not need to sign a costs agreement or disclosure for it to bind you. If you keep instructing the lawyer after receiving it, you are taken to have agreed to its terms.
The main exception is a conditional costs agreement, often called no win no fee. This type of agreement must be signed. Read the terms closely before you agree, as the meaning of a win can differ between agreements. Ask your lawyer to explain what you will owe in each possible outcome.
These arrangements are common in personal injury work. If you are looking at the next steps after a denied workers compensation claim, ask how fees will be charged before you sign anything. It is also wise to weigh the likely costs against what you stand to gain. Our guide on what to consider before you sue covers that question in more detail.
Your rights when the bill arrives
Your lawyer must give you a bill before asking for payment. You cannot be charged for preparing or giving that bill. Bills can be a lump sum, fully itemised or partly itemised. Every bill must explain your options for disputing it and the time limits that apply.
Some lawyers send interim bills that cover part of the work as it goes. This can help you keep track of costs during a long matter. If a bill seems higher than you expected, compare it with the written estimate you were given. A polite question to your lawyer often clears up a misunderstanding quickly.
Asking for an itemised bill
In Victoria, if you receive a lump sum or partly itemised bill, you can ask for further itemisation within 30 days of the costs becoming payable. The lawyer must provide it within 21 days of your request. Be aware that an itemised bill can come out higher than the lump sum. That is only allowed if the lawyer warned you in writing when the lump sum bill was sent. The higher costs must also be confirmed later by a costs assessment or the Commissioner.
Disputing a legal bill
The first step is usually to talk to your lawyer or the firm about the bill. If that does not fix the problem, the regulator in your state may be able to help. In Victoria, the Victorian Legal Services Board and Commissioner can deal with many costs disputes. A complaint generally needs to be made within 60 days of the costs becoming payable.
If you asked for an itemised bill, that time limit becomes 30 days after you receive it. Late complaints are only accepted in limited cases. Disputes that are not settled may go to the Victorian Civil and Administrative Tribunal or the Costs Court. Time limits matter, so act early if you think a bill is wrong.
Questions to ask about costs at the first meeting
The best time to talk about money is before any work begins. Before you hire anyone, it is worth taking a moment to check a lawyer is registered with the regulator. Then bring a short list of costs questions to your first meeting. Clear answers now can save a lot of stress later.
- How will you charge me, by the hour or with a fixed fee?
- What is your best estimate of the total cost, including disbursements and GST?
- Who will work on my matter and what are their rates?
- How often will I receive a bill?
- What happens to the costs if the matter runs longer than planned?
You can add these to the broader questions to ask your potential lawyer about experience and approach. Write down the answers or ask for them in an email. Comparing two or three lawyers on the same questions is a fair way to choose. Price matters, but so does the experience of the person handling your matter.
Frequently asked questions
Do I have to sign a costs agreement?
Under the Uniform Law in Victoria, you are usually bound by a costs agreement even if you do not sign it. Continuing to instruct the lawyer counts as agreeing to its terms. A no win no fee agreement is different and must be signed. Rules in other states may vary.
Can my lawyer charge me for sending a bill?
No, under the Uniform Law you cannot be charged for preparing or giving a bill. Your lawyer must also give you a bill before asking for payment. The bill should explain how to dispute it and the time limits. Check your local rules if your lawyer practises outside the Uniform Law states.
What if my lawyer never gave me an estimate?
For matters likely to cost more than $750, a written estimate is required under the Uniform Law. Failing to meet the disclosure rules can void a costs agreement and may amount to misconduct. Raise the issue with your lawyer first. If you cannot sort it out, contact the legal regulator in your state.
How long do I have to dispute a bill?
In Victoria, a costs complaint generally needs to be made within 60 days of the costs becoming payable. If you asked for an itemised bill, the limit is 30 days after you receive it. Other states set their own time limits. Check with your local regulator as soon as you have concerns.
This article is general information only and is not legal advice. Laws and processes differ between states and territories and can change. For advice about your situation, speak with a qualified lawyer.