Observations, impressions, and reflections on Dive Lawyers at the Costs Assessors' Conference
Extensions of time in which to have legal costs independently assessed by a costs assessor is an important topic. A fee dispute should be brought to the Supreme Court of New South Wales within 12 months. But what happens if an application is made after 12 months?
In this post, I am sharing my experience after attending the Supreme Court of New South Wales on Saturday, 27 July 2024 and taking part in the annual conference of costs assessors appointed under the Legal Profession Uniform Law Application Act 2014 (NSW) . In this post, I will concentrate on Dive Lawyers Pty Ltd t/as Dive Lawyers & Notaries v The Manager, Costs Assessment [2024] NSWSC 721 which occupied a great deal of attention. I hope to illuminate other topics in the near future.
The Costs Assessors' Conference operates under the Chatham House Rule. This rule helps create a trusted environment to understand and resolve complex problems. Its guiding spirit is: share the information you receive, but do not reveal the identity of who said it. The Rule reads as follows:
“When a meeting, or part thereof, is held under the Chatham House Rule, participants are free to use the information received, but neither the identity nor the affiliation of the speaker(s), nor that of any other participant, may be revealed.”
This post is about my observations, impressions, and reflections. Necessarily they are incomplete, potentially erroneous, and most definitely subjective. So, this post is intended for practising barristers and solicitors only, and in no way is intended as legal advice for anyone. I strongly recommend everyone obtain legal advice before making any decisions about legal costs that they cannot afford to get wrong. The law of legal costs is a complex field in which I have expertise, both as a costs assessor and a barrister advising and representing barristers, solicitors, and their clients in fee disputes, and more generally. You can learn more about me from my website .
What did Dive Lawyers decide?
Dive Lawyers changed the accepted position that a “law practice” who lodges an application for assessment of costs outside the 12-month limitation period is not entitled to an extension of time. The right to an extension of time is expressly conferred by Legal Professional Uniform Law at section 198 on a “client” and a “third party payer”. But, conspicuously absent in sub-section (4), is any mention of a “law practice”, despite the express reference in sub-section (1). So, the accepted position reasoned that the omission of "law practice" in sub-section (4) was to be understood as meaning that a law practice who lodges an application for assessment of costs outside the 12-month limitation period is not entitled to an extension of time under any circumstances.
It was accepted at the Costs Assessors' Conference that Dive Lawyers now entitled a law practice to an extension of time in some circumstances.
Important words
For simplicity, in this post I have written about an “extension of time”. While the reasons in Dive Lawyers use that very same expression “extension of time”, the Court also drew a distinction between
Even with the benefit of several discussions at the Costs Assessors' Conference, I cannot see that anything turns on this subtlety, at least not for the purposes of this post. Please comment if you have any ideas.
In this post, a “decision” deliberately differs in meaning from a “determination”, but in Dive Lawyers these terms with precise legal meanings may have been inadvertently used interchangeably. The significance of these terms is beyond the scope of this post, but underscores the need for expertise.
Finally, in this post, I have carefully selected when to use the word “may” and when to use the word “must”, to help attentive readers.
How to seek an extension of time
The topic of intense discussion at the Costs Assessors' Conference I want to write about here is the mechanics of how a law practice should seek an extension of time and how that should be dealt with by the various persons responsible at different stages of costs assessment.
I was fortunate enough to join a group of costs assessors responsible for formulating procedural steps for discussion by the conference in general session. Some costs assessors at the conference also sit on the Costs Assessment Rules Committee (CARC), which is empowered to make rules or publish guidelines and is working towards doing so. As I hope to explain below, the private group and general session discussions about Dive Lawyers raised some challenging procedural issues at different stages of costs assessment which require nuanced attention, and which indicate ways in which CARC may issue their rules or guidelines in the coming months.
I once overheard my clerk of chambers on the telephone explaining to a supplier “I work for 20 lawyers, so that means I have to deal with at least 40 different opinions”. So, unanimity in general session was always going to be an unachievable fantasy. Nevertheless, until CARC issues a rule or guideline, I hope that sensible law practices lodging an application that is, or might be, out of time, will consider the following remarks, which reflect my observations, impressions, and reflections on opinions at the 2024 Costs Assessors' Conference.
An application by a client or third party payer
On receipt of an application from other than a law practice, the Manager, Costs Assessment must decide
No costs assessor is involved.
It follows that a dissatisfied party may seek a review of the decision by the Manager, Costs Assessment before the Supreme Court of New South Wales.
As no costs assessor is involved, no determination has been made, so there is no right to a review of the decision by the Manager before a Review Panel.
An application by a law practice
On receipt of an application from a law practice, the Manager, Costs Assessment must refer the application to a costs assessor for determination. When referring the application to a costs assessor, the Manager, Costs Assessment, may inform the costs assessor that it is the Manager’s opinion that the application is out of time, but that opinion does not bind the costs assessor. This procedure is consistent with Dive Lawyers and it should minimise the possibility of overlooking an out-of-time application by having two persons consider the issue: the Manager, Costs Assessment, and a costs assessor.
On receipt of an application by a law practice from the Manager, Costs Assessment, the costs assessor must determine whether the application is out of time immediately. Why immediately? This is to ensure the costs assessor possesses jurisdiction to conduct a costs assessment, as a costs assessor lacks jurisdiction to assess an out-of-time application absent an extension of time.
When determining if an application is out of time, the costs assessor must consider the documents and submissions provided by all parties. The parties’ documents and submissions should only focus on whether the application is out of time, not on whether an extension of time should be granted. This is because the costs assessor has no power to extend time, which is reserved exclusively to the Manager, Costs Assessment.
Three possibilities
There are three possibilities: an application is
That third possibility arises if a single application covers multiple engagements (to use a neutral expression) between a law practice and the client. For example, a client might engage a law practice to advise on, and prepare documents for, a transaction, which leads to identifying the need for litigation about a facet of the transaction, which leads to the client engaging the same law practice for that litigation. Is this a single engagement, so the 12 months in which to lodge an application for assessment runs from the date of, say, the most recent invoice issued after litigation, or is this two consecutive engagements, so that there are two different 12-month periods in which to lodge an application, (1) after the advice work is finished and then again (2) after the litigation?
Anecdotes are not data, but discussions at the Costs Assessors' Conference revealed this problem arises much more often than you might otherwise think. So, like the discussions at the Costs Assessors' Conference, I will address each of the three possibilities.
Wholly within time
If a costs assessor determines that an application is wholly within time, then they must
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There was no consensus at the Costs Assessors' Conference whether there was an obligation to give reasons immediately or ultimately, but it was accepted that if the procedure to be adopted by costs assessors mirrors judicial practice, then reasons may be given at the ultimate determination.
In this scenario, it follows that a costs assessor will eventually issue a certificate of determination, at which point
Wholly out of time
If a costs assessor determines that an application is wholly out of time, then they must
The Manager, Costs Assessment would then call on the parties for documents and submissions about whether an extension of time should be granted, and make a decision.
Dive Lawyers is authority for the proposition that in this scenario, a law practice may get an extension of time because the application is made by the costs assessor, and along with the “client” and “third party payer”, the Legal Professional Uniform Law at section 198, sub-section (4), the right to an extension of time is expressly conferred “on application by the costs assessor”: Dive Lawyers at [23]–[25].
Wholly out of time and extension granted
If the Manager, Costs Assessment decides that an application is granted an extension of time, then he must
In this scenario, it follows that a dissatisfied party may seek a review of the decision by the Manager, Costs Assessment before the Supreme Court of New South Wales.
As no costs assessor is involved, no determination has been made, so there is no right to a review of the decision by the Manager before a Review Panel.
Presumably, (1) time starts to run from the date of the Manager’s reasons, and (2) the summons filed with the Court would be served on the costs assessor in addition to being served on the Manager, Costs Assessment, and so the costs assessor would pause the assessment pending the resolution of the summons.
There was no consensus at the Costs Assessors' Conference whether the Court might simultaneously consider the decision by the Manager, Costs Assessment together with the costs assessor’s decision that an application is out of time.
Wholly out of time and extension denied
If the Manager, Costs Assessment decides that an application is denied an extension of time, then he must
Why does a costs assessor decline the assessment? Because they lack jurisdiction.
How does a costs assessor decline the assessment? By issuing a "certificate of non-determination", which formally brings the assessment to an end. No certificate of non-determination presently exists, the Costs Assessors' Conference recognised the need to prescribe a form, and a senior costs assessor volunteered.
In this scenario, it follows that a dissatisfied party may seek a review of the decision by the Manager, Costs Assessment before the Supreme Court of New South Wales.
As no costs assessor is involved, no determination has been made, so there is no right to a review of the decision by the Manager before a Review Panel.
It is not clear from when time starts to run: from either (1) the date of the Manager’s reasons, or (2) the date of the certificate of non-determination.
Presumably any summons filed with the Court would be served on the costs assessor in addition to being served on the Manager, Costs Assessment, and so, pending the resolution of the summons, the costs assessor would refrain from (1) issuing the certificate of non-determination or (2) remitting the application to the Manager, Costs Assessment if a certificate has issued.
There was no consensus at the Costs Assessors' Conference whether the Court might simultaneously consider the decision by the Manager, Costs Assessment together with the costs assessor’s decision that an application is out of time.
Partly within time and partly out of time
If a costs assessor determines that an application is partly within time and partly out of time, then they must
There was no consensus at the Costs Assessors' Conference whether
Things to think about
Whatever CARC decides, some decisions have to be made now.
Some of the decision-tree pathways outlined above introduce additional burdens, some of which will cause the costs of assessment to increase, as well as the time, and some of which require adjustment to costs assessors’ initial timetables. Beyond the obvious possibilities raised by these variables, is one conundrum.
A law practice that lodges an application for assessment of costs that might be outside the 12-month limitation period has a dilemma: do they confront the possibility expressly in the application and make submissions, alerting the costs respondent (usually the client) to a possible ‘defence’, or do they remain silent and hope neither the costs respondent, nor the Manager, Costs Assessment, nor the costs assessor, share their pessimism and take a different view. If the law practice lets sleeping dogs lie, then the law practice risks facing a costs assessor’s initial timetable requiring documents and submissions in only 7 days, a time period I heard mentioned several times at the Costs Assessors' Conference. If they let sleeping dogs lie, do they incur the cost of submissions but hold them back, only to serve them if needed within 7 days? Sometimes the answers will be easy, but I suspect one unintended effect of Dive Lawyers is to inject the need for some novel thinking about strategy and tactics.
I will leave you with a rhetorical question to ponder. If a law practice lodges an out-of-time application and seeks an extension of time, how relevant and significant is the fact that, until Dive Lawyers was handed down, a law practice was not aware that an extension of time could be sought?