LEGAL FEES

FEES POLICY NO WINNER FOR CLIENTS, SAYS JUDGE....

LAWYERS acting on a ''no win, no charge'' basis are compromised in their ability to provide the best objective advice to their clients, a senior NSW judge has warned.

Justice Patricia Bergin, the chief judge of the Supreme Court's equity division, said the controversial but widespread practice of charging contingency fees was ''fraught with difficulties'' and liable to produce ''unsatisfactory byproducts'' for clients.

Justice Bergin made the statements in a case where a firm threatened to stop acting for a client if he did not accept a settlement offer, causing him to become ''emotionally distressed''.
A week before Alan Spence's hearing and after 2½ years of work on his case, Gerard Malouf and Partners discharged itself from acting for Mr Spence, refused to release his file and claimed he owed $240,000.

Justice Bergin criticised the firm - whose principal was found guilty two years ago of professional misconduct for illegal advertising - ordering it to release the file and pay Mr Spence's costs.

''It is clear to me that the solicitors were very concerned that if they did not secure a settlement they would not be paid any fees or costs. I am satisfied that this concern caused the highly inappropriate threat to be made,'' Justice Bergin said.

''In a 'no win, no charge' retainer, when solicitors' livelihoods and incomes are bound up with, and dependent upon, the client taking a particular step in litigation, it seems to me that the capacity to provide the client with objective advice about taking that step is compromised. The greater the amount of fees to be lost, the greater the prospect of compromise.''

The president of the Law Society, Mary Macken, said the concerns were valid and clients needed to consider carefully what constituted a ''win'' for firms that claim almost 100 per cent success rates.

''A technical win may see the client walk away with very little … A lawyer taking on a spectrum of cases which includes extremely difficult cases would find it hard to maintain a 98 per cent success rate,'' Ms Macken said.

Lawyers should make it clear to clients that ''if the case is lost, they may have to pay the costs of the other party'', she said. ''Or, indeed, if the case is technically 'won' but costs are significant, the win may be pyrrhic.''

Mr Spence's solicitor, Shaye Chapman from the firm Lawjet, said the case ''puts it back on firms to make it clear in their agreements with clients the basis of when they are entitled to their legal fees''. But Jnana Gumbert, the NSW branch president of the Australian Lawyers Alliance, which represents many personal-injury firms, said: ''By and large, lawyers don't allow those considerations to affect the advice they provide to clients.''

Contingency fees provided a community service for thousands of victims of accidents who would otherwise be fighting large insurance companies by themselves, Ms Gumbert said.

Gerard Malouf and Partners, which markets itself as having the ''triple-C attitude - compassion, commitment and competence towards our clients'', did not respond to requests for comment.

- JOEL GIBSON LEGAL AFFAIRS

TRUST US - WE'RE LAWYERS!

THE nation's nine biggest law firms have accused the federal government of being prejudiced against lawyers as it moves to increase protection for clients.

The firms want to be exempt from tough rules protecting consumers, saying they should not be tainted by the sins of smaller players and that their clients are sophisticated enough to look after themselves.

In a letter to the secretary of the federal Attorney-General's Department, Roger Wilkins, the firms complain that the regulation taskforce he heads has ''an unduly negative attitude towards lawyers, their business practices and their motivations''.

They argue its proposals reveal a string of prejudices, including that all lawyers are engaged in a lucrative industry and that this justifies complex regulation; that time charging is inherently unethical and exploitative; that lawyers need to be forced to charge their clients fairly, and that lawyers have an unfair bargaining position with their clients.

The proposals include requiring lawyers to charge proportionate, fair and reasonable costs, to ban them from charging for administrative tasks, and to require all bills to be signed.

The firms and the law societies say terms such as ''fair'' and ''reasonable'' are too subjective and that no other profession is subjected to such conditions. But if the changes are adopted, the firms say they should be exempt because their clients are savvier and do not need extra protection.

The views are contained in a letter obtained under freedom-of-information rules and written in December by Mallesons Stephen Jaques's managing partner, Robert Milliner, on behalf of Allens Arthur Robinson, Blake Dawson, Corrs Chambers Westgarth, Freehills, Minter Ellison, DLA Phillips Fox, Clayton Utz and Deacons, now called Norton Rose.

They favour a seamless national market but have split with other sectors of the profession over how much responsibility for making rules and investigating complaints should be centralised, and how much left in the hands of state and territory bodies.

TWO SET OF FEES: LAWYER LOSES PURSUIT OF CLIENT OVER LEGAL BILLS

A SYDNEY lawyer who sued a client for unpaid fees and accused him of perjury has lost his case in the Supreme Court after it found he claimed fee agreements that the client had never seen.

The finding came two days after Peter Maatouk's family company went into administration, and on top of previous Supreme Court judgments that found his conduct ''unreasonable'', ''provocative'' and disrespectful to other lawyers.

But the NSW Law Society was unaware of the Supreme Court decision last week and, for confidentiality reasons, would not say whether Mr Maatouk was under professional investigation.

Mr Maatouk, 34, who offers legal services, online divorce and home loans through his Liverpool office and website, took a Campsie taxi owner, John Najem, to the Local Court and to a Supreme Court costs assessor to enforce payment of 46 bills.

Mr Maatouk provided letters as evidence that he said outlined their contract, but Mr Najem also provided letters outlining a different fee agreement for the same work.

''The costs assessor was accordingly faced with two inconsistent sets of costs disclosure letters and the apparent possibility that at least one was a set of fake copies prepared for the purpose of deceiving him,'' Justice Lucy McCallum said in deciding an appeal in Mr Najem's favour.

She found the client to be ''an honest man'' and accepted his claim that he had never seen the contracts Mr Maatouk provided.

''However the costs disclosure letters relied upon by Mr Maatouk came into existence, I am not satisfied that original letters in those terms were ever sent to Mr Najem,'' the judge said.

Two days before the court decision, Mr Maatouk's family company was put into administration after a long-running dispute with a tenant in Belmore.

When that dispute came before the Supreme Court in 2005, Justice Richard White said the litigation had ''largely been brought about by the unreasonable and provocative conduct of both parties'' and that Mr Maatouk and his family company had been ''principally to blame''.

A Law Society spokesman said the recent decision would be referred to the Legal Services Commissioner if appropriate.

Source: The Sydney Morning Herald

LAW FIRM FEES UNDER SCRUTINY

MEASURES to prevent legal firms overcharging and exploiting vulnerable clients will be discussed by professional legal bodies nationally over the next year.

In Canberra yesterday the standing committee of attorneys-general (SCAG) agreed unanimously to ask its national legal profession joint working party to consult the profession on five proposals aimed at greater transparency and accountability regarding legal fees.

The measures proposed by NSW for eventual adoption into the national model law on the regulation of the legal profession include a prohibition on law practices charging excessive costs, fines for any breaches of provisions adopted, and a new regulation under which the principals of law firms - not their solicitors or any other person - would approve bills.

The NSW Attorney-General, John Hatzistergos, hopes that following consultation over the next 12 months with law societies, bar associations and other legal professional bodies, the measures will be adopted into the legal profession acts of the various states and territories.

He told the meeting of "scandalous" cases including how the now-jailed Sydney solicitor Leon Nikolaidis was found not be be responsible for a bill sent to a client by his employed solicitor and claims made in the South Australian Parliament of excessive legal fees including "double, triple and quadruple charging" by failed Adelaide firm Magarey Farlam.

Mr Hatzistergos was specifically concerned about serious allegations of exploitation by lawyers among groups of people, particularly those with personal injury claims, who were already "highly distressed and had lost their livelihoods".

He told the Herald it was "outrageous" that junior solicitors had to meet firms' billing targets, which encouraged overcharging.

The proposed measures also follow revelations by the Herald last year of complaints of overcharging by numerous former clients of the largest specialist personal injury firm in NSW, Keddies Lawyers. The firm claims they were orchestrated by disgruntled former employees in a malicious campaign to damage its substantial reputation.

The committee also agreed to a Victorian request to ask the Council of Australian Governments (COAG) to consider a national regulator to replace the disparate system currently overseeing the profession, as part of a parallel set of proposed reforms of the legal profession to those considered by SCAG.

"In this day and age, it does not make sense for there to be more than 50 regulatory bodies around Australia to oversee the legal profession," the Victorian Deputy Premier and Attorney-General, Rob Hulls, said yesterday.

"This mish-mash of bodies makes for a complex system that leads to inefficiencies and a greater cost of legal services."

Mr Hulls said the practice in Victoria of some barristers charging between $10,000 and $14,000 a day was a disincentive to resolving matters quickly.

"I know that for some young solicitors the tyranny of the billable hour occupies a lot of their time. The billing regime should be focused on settling matters on a much earlier basis rather than charging on an hourly or daily basis, which is a disincentive," Mr Hulls said.

The federal Attorney-General, Robert McClelland, said it was important that clients were informed about the fees and other costs for legal services before engaging a lawyer. "Obviously, we need to ensure that fees and costs are not excessive and that they are consistent with what is initially disclosed to a client."

In the separate COAG reform agenda "all aspects of regulating lawyers and the legal profession, including fees and fee disclosure" would be considered, he said.

Source: SMH (JENNIFER COOKE)

NSW CHIEF JUSTICE SEES RED OVER LAWYER FEES

Speaking after the annual Red Mass to open the 2009 law term, New South Wales Chief Justice Jim Spigelman challenged lawyers to cut their costs and charges to clients or risk being marginalised.

The economic downturn is potentially so severe it could mark the end of an era in the law that "treated commercial values as of overriding significance", Chief Justice Spigelman said according to a report in The Australian.

The Chief Justice, who began his day with the traditional Red Mass at St Mary's Cathedral, said the downturn was already having an effect on the flow of litigation.

Afterwards, he predicted there would be renewed emphasis on the "moral code that underpins the traditional authority of our profession."

"That ethic of service, which emphasises honesty, fidelity, diligence and professional self restraint, will now resume its salience over the pursuit of commercial gain at the core of legal practice," the Chief Justice said.

"Economic adversity will increase cost consciousness at all levels."

Cutting costs, he said, was not only in the public interest, it was in the "enlightened self interest" of all legal practitioners.

"If the profession is too greedy, it will end up with less, and in some fields, with nothing," he told the lawyers.

The US legal profession holds its Red Mass in October, at the start of its law term, at the Cathedral of St Matthew the Apostle in Washington.

Source: Christian Today

LAWYERS' FACE 6 MINUTE TEST OF HONESTY

LAWYERS' practice of billing clients in six-minute units is under threat amid wholesale changes to reduce over-charging in the profession. The nation's attorneys-general have united to develop new legislation to protect clients from excessive legal charges. In June, the Herald published a series about allegations of over-charging by the state's largest specialised personal injury firm, Keddies Lawyers. This week the parliamentary secretary assisting the NSW Attorney-General, John Hatzistergos, sent a letter to a Keddies client saying the Government was aware of his concerns about the firm's professional conduct and that a review into the profession's system of charging was under way. Former Keddies clients alleged the firm had not only grossly overcharged them but retained hundreds of thousands of dollars of settlement money without their knowledge.

Several clients who suffered injuries in car accidents told the Herald they were never sent bills. One such client, a Chinese businessman, thought his total compensation payout was $50,000. He later discovered it was really $300,000, of which Keddies retained $250,000 for legal fees and expenses. A spokesman for Mr Hatzistergos confirmed the states and territories had agreed to work together on the new legislation "to ensure that vulnerable consumers are protected from lawyers who overcharge and exploit them".

The profession's watchdog, the Office of the Legal Services Commissioner, is investigating numerous complaints by clients against Keddies. The firm, which made 14 staff including five lawyers redundant this week, maintains it has done nothing wrong and is confident the commissioner will dismiss all the complaints. The commissioner, Steve Mark, is unable to comment on any cases before the commission but he said he would welcome any proposed changes as the present billing system was not working.

"The whole costing regime for the legal profession needs to be reviewed," Mr Mark said. Everything from cost assessment, gross overcharging and lawyers' billable hours needed to be overhauled. He suggested that the system of charging in six-minute units be abandoned. And he said clients should be given the option of a firm quote "which would be a contractual agreement". The overhaul was raised by the NSW Attorney-General at the Standing Committee of Attorneys-General, held in New Zealand in July. Ministers from each state voted to refer it to a working group to develop legislation to combat overcharging and exploitation of clients.

Chris McGrath, a former butcher, who suffered brain damage in a motorcycle accident, was charged $48 for a welcome letter sent by Keddies. The firm was later ordered to repay him $85,000. The parties are negotiating. "Keddies did a great job by me," Mr McGrath previously told the Herald. "I just think that their billing system is not so good." A former client, Mohammed Tariq, felt moved to write a "thank you" to Keddies, only to be billed $49 for his lawyer to read it. And he and two family members were charged almost $600 for their solicitor to travel less than two kilometres. "I'm grateful to the Attorney-General for initiating the review," Mr Tariq said yesterday.

Source: SMH (KATE MCCLYMONT AND JENNIFER COOKE)

KEDDIES CASE NOT 'COMPLEX OR DIFFICULT'

THE head of Sydney law firm Stacks/Goudkamp has described as "extraordinary" the fee of $261,634.99 charged by the state's largest specialised personal injury law firm, Keddies Lawyers, for a case involving an amputee motorcyclist that was neither complex nor difficult.
Mr Tom Goudkamp, the managing director of Stacks/Goudkamp, said yesterday that his firm had done much of the work over two years on the personal injury claim of Mr Mitchell Smith, now 30, who is disputing all $320,230.24 in fees and other expenses that were retained from his compensation settlement of $1.5 million. In an application for a Supreme Court costs assessment to be opposed by Keddies, Mr Smith, whose case settled in July 2005 - more than three years after he was thrown from his bike when a car suddenly turned in front of him on the night of February 8, 2002 - has disputed the entirety of what he claims is a huge and unjustified legal bill.

Mr Goudkamp said yesterday that by mid-2004 he was in the process of arranging an informal settlement conference with the NRMA, the insurer of the car that hit Mr Smith, resulting in the amputation of his right arm above the elbow and a closed head injury that left him in a week-long coma. Mr Smith, told of the possible range of damages he might expect to receive, can only recall a figure of about $750,000. He regarded that as too low and switched suddenly to Keddies Lawyers.

A year later Mr Smith received $1 million himself of a total settlement of $1.5 million but says he has no recollection of ever receiving a bill. Keddies maintains it gave him one when he received his compensation cheque. In June this year, after a series of articles were published in the Herald about multiple complaints against Keddies, Mr Smith requested an itemised bill from Keddies. He later received a non-itemised list that several lawyers consulted by the Herald dispute is a proper bill as it did not include any indication of who had performed work done on his case, for how long or at what cost to justify the total of $261,634.99 including GST charged in professional fees. Keddies told the Herald this week that its fees were appropriate for its work and the results achieved. "Mr Smith came to us unhappy with the efforts of his previous lawyers, so we took on his case and achieved a payout more than double the insurer's previous offer in what was a difficult and complex case," a spokesman said.

"The case was not difficult or complex" and the NRMA had admitted liability with contributory negligence that had little supporting evidence, he maintained.

"I regard Keddies's fees as extraordinary," said Mr Goudkamp.

Jennifer Cooke
November 27, 2008

Source: SMH

KEDDIES CLIENT CHARGED FOR SAYING THANKS

A SENIOR solicitor with Keddies Lawyers charged three clients from the same family almost $600 to travel less than two kilometres between Redfern and the CBD for a conference. Mohammed Tariq, who received head, neck and back injuries in a collision near his western Sydney home on the night of January 11 last year, was also separately billed $60 for a welcome letter from the firm after he decided to sue for compensation.

His lawyer, Philip Scroope, who bills in 10, six-minute units at $490 an hour as one of the firm's accredited personal injury specialists, also charged $49 to read an electronic "thank you" e-card Mr Tariq had sent him. A further $49 was charged for an email Mr Scroope had sent colleagues seeking an Indonesian translator and $49 more went on the bill for the email advising the Indian-born Mr Tariq, an accredited interpreter in Urdu, Punjabi and Hindi, of Mr Scroope's coming holiday.

Liability for Mr Tariq's injuries was admitted early in his 12-month involvement as a client of the state's largest firm specialising in personal injury cases. He had claimed against NRMA, the insurer of a car driven by a P-plate driver that collided with him.

On February 21 this year, the day his case settled at a conference at Keddies's Civic Tower office in Goulburn Street, the firm charged more than $8000 for work on the cases of Mr Tariq, and the separate claims for nervous shock of his wife and daughter - who declined to be named.
Included in that amount were separate billings of $490 for a pre-conference meeting at the firm's Redfern Office, $98 each for Mr Scroope's 1.9-kilometre journey to the southern part of the CBD, $490 each for the conference at which all three cases were settled, another triple $98 charge for the trip back to Redfern and $245 charged to each for a post-conference meeting held with all three present.

Mr Tariq's wife and daughter - who did not attend the settlement conference - were also billed $98 each for a call Mr Tariq made to them from his own mobile phone during which they agreed to offers of $45,000 and $75,000 respectively, in settlement of their nervous shock claims. The Tariqs have complained to the Office of the Legal Services Commissioner about overcharging.

They are determined to claw back some of the more than $117,000 charged in total for their legal costs and other expenses. Keddies has been the subject of allegations from former clients, some of whom have received reimbursements totalling more than $500,000 after complaining formally about alleged overcharging. The firm has repeatedly denied allegations of overcharging, stating its confidence that all complaints before the legal regulator will be dismissed.

Since a Herald investigation into claims against the firm, published last month, revealed a group of more than 25 clients had made formal complaints over the past 18 months, some have been dismissed. During the past two weeks it is understood that more complaints have been lodged with the commission. Mr Tariq, who told the Herald he was stressed and confused when settling his compensation claim on February 21, admits to outbursts of emotion, frequent anger and threats of violence as part of an ongoing accident-related psychiatric condition following his brain injury and his strong medication for mood stabilisation and pain relief.

He has written to his state parliamentarian, Diane Beamer, the Attorney-General, John Hatzistergos and the shadow attorney-general, Greg Smith, about his Keddies experience. Letters of complaint were also sent last week to the NSW Police Commissioner, Andrew Scipione, and the Law Society of NSW. Mr Tariq now intends to apply for a Supreme Court costs assessment of the three bills for which the Keddies professional costs alone totalled more than $100,000. When the Herald asked to put some of Mr Tariq's claims about his family's bills to Mr Scroope, a spokesman for the firm said it would leave them to the legal regulator and costs assessor "to examine and pass judgment on with the benefit of all of the material that will be before them".

An "extremely angry and disappointed" Mr Tariq has known Mr Scroope for more than a decade and said he had a panic attack when, after compulsory payments were deducted from his $400,000 gross settlement, he found that legal costs and expenses were nearly $86,000 (reduced from more than $100,000). He agreed that they were within the range estimated in his signed costs agreement with the firm. Keddies organised for him to take out a loan to cover his initial medical costs. He repaid the $13,445.22 owed on his loan from his settlement money, but Keddies deducted $1200 more for treatment expenses. Unable to work since the accident, Mr Tariq was left with just over $250,000 for treatment for the rest of his life.

After protesting - shirtless - outside the Keddies Lawyers Redfern office in March, he received two refunds totalling $11,987.62. Half of this amount was described on his bill as a refund from the loan company.
His daughter, on whose behalf he had complained, was also reimbursed $4488.61 in addition to the $46,000 she received net after compulsory deductions, legal costs and medical and other expenses were taken out of her $75,000 settlement. Mr Tariq's wife paid more than $15,000 in legal costs and expenses from her $45,000 total settlement.

"I am not going to stop until justice is done," Mr Tariq said yesterday, vowing to continue his protests outside Keddies's offices in Redfern, Ashfield and Liverpool as well as their new Wollongong and Brisbane offices.
A spokesman for Keddies said: "We have tried on many occasions to reassure Mr Tariq about various aspects of his case. It became clear the best way to satisfy his concerns was to urge him to go to the Legal Services Commissioner - the government watchdog in these matters - to independently examine his case. "We are pleased he has now chosen to do that and hope that process will give him comfort that his case was appropriately handled," the spokesman said. "Our lawyers achieved a significant compensation payout for Mr Tariq's back, neck and brain injuries and, at the time, he told us he was delighted with the result."

Source: SMH (JENNIFER COOKE AND KATE MCCLYMONT)
Picture SOURCE: SMH.COM.AU

INSURER CALLS FOR CAP ON LEGAL FEES

ONE of the largest vehicle insurers in NSW has called for a crackdown on costs charged by lawyers in personal injury cases following accusations of overcharging and document falsification against the state's largest specialised personal injury law firm, Keddies Lawyers. This echoes calls for a review of costs assessments, cost disclosures and regulations aimed at preventing overcharging by lawyers that were made in Darwin last Friday at the national conference of legal regulators.

Numerous clients of Keddies Lawyers have told the Herald they were charged fees that took large proportions of their insurance company payouts following settlements of their personal injury claims in motor vehicle and other accidents. A Shanghai businessman, Gu Xi Liang, claims that after flying to Singapore for a special sitting of the NSW District Court two years ago, his case settled before he was due to give his evidence and Keddies retained more than 80 per cent - $250,000 - of his $300,000 compensation for legal costs and expenses. Mr Gu has complained to the NSW legal regulator, the Office of the Legal Services Commissioner, about the $60,000 he was charged in total by his barristers.

Other Keddies clients have complained about huge fees, signing legal documents that contained blanks that could be filled out later, about not receiving a bill, or not knowing their total compensation amounts. Keddies Lawyers, which has reimbursed at least seven clients a total of more than $500,000 after complaints about their fees, has strenuously denied all the allegations. The three partners have stated repeatedly their confidence that the commission will find that all the complaints under investigation will be dismissed - as others have been.

While some clients withdrew their complaints to the commission after receiving refunds and signing confidential deeds with Keddies, the firm states that the commission does not "rubber-stamp" complaint withdrawals if it believes there is a case to answer. Any conclusion "that because there's been a reduction in fees it follows that the firm has overcharged the client in the first place is false, improper and a misrepresentation of the fact", according to Keddies partner, Tony Barakat. The corporate affairs manager of Allianz Insurance Australia Limited, Nicholas Scofield, told the Herald the company was "concerned to discover that injured claimants' settlements have been reduced to such an extent [as reported last week in the Herald ] by additional plaintiff solicitor-client legal costs".

Allianz is believed to have paid more than $1 million in total to at least seven Keddies clients who were part of its 2006 Singapore circuit.
Mr Scofield said the information uncovered in the Herald's investigation into client complaints about costs charged by Keddies "suggests there may be merit in NSW looking at similar reforms" to those that apply in Queensland where solicitor-client fees are capped at a maximum of 50 per cent.
At last week's national legal regulators meeting, which included law societies and bar associations from all states, calls were made to simplify and nationalise regulatory schemes that apply differently in each state. In the past year, two key decisions, in the NSW Court of Appeal and in the Administrative Decisions Tribunal, have effectively rendered the NSW commissioner powerless to act in relation to lawyers accused of overcharging clients.

Source: SMH (JENNIFER COOKE AND KATE MCCLYMONT)

TWO barristers regularly briefed by Keddies Lawyers have been caught up in accusations of overcharging that have been levelled against the personal injuries firm.

The barristers, Tim Meakes - already publicly reprimanded for "gross overcharging" two years ago - and David Campbell, SC, are alleged to have overcharged some clients. Gu Xi Liang was one former Keddies client whose $250,000 in legal fees and expenses included $40,000 for Mr Campbell for work on his case that involved a conference in China four months before the claim was settled in Singapore in 2006. Mr Gu told the Herald : "I never met David Campbell, the senior barrister, ever."

Mr Gu and other clients appear to have been billed twice for Mr Campbell's air fare and accommodation. There is now a difference of opinion between Keddies and Mr Campbell over who paid for these expenses.

When asked to review Mr Campbell's bill in Mr Gu's matter, the barrister Geoffrey Watson, SC, said: "Virtually every aspect of this fee note raises a question as to the propriety of the charging." In another bill, submitted in relation to the Beijing builder's labourer Wang Jin, in which Keddies itemised Mr Campbell's charges, "potential gross overcharging" was reflected in the $185,000 total, Mr Watson concluded. The bill included $34,000 in charges for a China trip that included a day's meeting with Mr Wang on October 31, 2005, and for other meetings in China with Sydney-based doctors and Keddies's lawyers. On that 10-day medico-legal trip Mr Campbell had conferences with plaintiffs injured in accidents in Australia, including Mr Wang and his wife, who were among 28 Keddies clients to be seen by its solicitors.

Mr Meakes, who did not see Mr Wang on this trip, still billed him $14,300 for travelling to and from Shanghai, and for conferences and a loading (meant to compensate a barrister for being away from home). Mr Meakes spent four days in China before flying back for personal reasons. His total bill for Mr Wang's case, which included three days of his evidence taken on commission the following year in Singapore, was $126,000. Despite submitting bills for Mr Wang's case of which the combined amount was more than $300,000, the two barristers were not paid. Keddies had submitted a bill of $625,000, which included the barristers' fees, to the lawyers acting for QBE Insurance. QBE had settled Mr Wang's case for $150,000 plus his legal costs.

But when Keddies put in its bill, now conceded to be a "wish list", QBE's lawyers disputed it. Keddies later agreed to accept a total of $95,000. A letter to the Herald from the firm's three partners, Russell Keddie, Tony Barakat and Scott Roulstone, stated it would be a "gross misrepresentation … to conclude that merely because there was a commercial settlement of the costs dispute that the costs and disbursements were excessive in the first place". They said the barristers had received nothing but had not chased Keddies for their fees. Claims of overcharging have since been made by some unhappy Chinese clients of Keddies, some of whom were due to have evidence heard in a special sitting of the NSW District Court in Singapore in 2006.

Since then three of those 10 Singapore circuit clients, and at least 20 others, all with personal injury claims, complained to the Office of the Legal Services Commissioner about matters including alleged overcharging by Keddies. The firm has refunded hundreds of thousands of dollars to a number of clients, some of whom signed confidential deeds and withdrew their official complaints.
The Herald understands there is a current complaint in relation to alleged overcharging against Mr Campbell, who has, through his lawyers, said he is prevented from responding in detail due to the legislation under which the commission operates. Other complaints relate to Mr Meakes, who has not responded to any Herald queries, and Keddies, which has repeatedly stated it is confident all complaints against it will be dismissed.

Keddies charged most of the 10 clients in Singapore in 2006 at least $10,000 each for first-class air fares and accommodation at the Fullerton Hotel, one of Asia's most expensive hotels, for its legal team, including Mr Campbell. Mr Gu's final bill from Keddies appears to show the Shanghai businessman had been charged twice for Mr Campbell's air fare and accommodation.

Keddies charged Mr Gu $11,691 for travel and accommodation for three lawyers, including Mr Campbell, and an interpreter and transfers to a hotel where neither Mr Gu nor the legal team stayed. Mr Campbell's bill to Keddies for Mr Gu listed $7500 in "loading including travel, accommodation and sustenance" for that Singapore trip. He also charged Mr Gu $6000 for the same inclusive loading for the preceding medico-legal trip to China in 2005 when he had conferences with some of the 28 Keddies clients.

Mr Watson, when asked to comment on Mr Campbell's charge in Mr Gu's bill of a $6000 loading, said that if it did not include air fares or accommodation it was "way too much". A loading was to be spread, as fairly as possible, between all of the cases, he said.

A written response from the firm stated: "The fact is that Keddies paid for senior counsel's fees, air fares and accommodation for both trips. The air fares were apportioned across the matters that were in the Singapore circuit and we were rightly entitled to seek reimbursement of those air fares and accommodation expenses." The response also stated: "We believe the amounts claimed in senior counsel's bills in Mr Gu's matter in the sum of $6000 and $7500 for both trips … [to Asia] are loading fees and do not include the actual cost of the air fares and accommodation incurred by senior counsel. This can be clarified with senior counsel but we feel confident that this is the case." But Mr Campbell told the Herald that he had paid for his air fares and accommodation. Not only that, his lawyers, Verekers, said he had paid $58,005.05 "out of his own pocket" for travel and accommodation on the two trips to Asia. He had not sought to reclaim it.

Mr Campbell said his professional fees had totalled $147,500 for the 10 Singapore cases. When the Herald informed Keddies of Mr Campbell's assertion that he paid for himself, the firm wrote back saying that since speaking to Mr Campbell it had come to the realisation that, "although Keddies paid for air fares for Mr Campbell along with other members of the team, Mr Campbell reimbursed Keddies for those expenses".

But Mr Campbell said he paid and that he "has not sought to recover any of that sum [the $58,005.05 travel and accommodation expenses] from Keddies or the clients". The confusion regarding who paid for what continued in relation to Mr Meakes, who billed Keddies $20,000 in total for Mr Gu's casework. He did not reply to the Herald's questions but Keddies says Mr Meakes paid for some expenses and the firm paid for others. Neither Keddies nor Mr Campbell would give the Herald any receipts, but after checking numerous financial records Keddies said: "In summary, the records show that while at all times travel expenses were paid for by different parties, no client has been overcharged in relation to those travel expenses." The Keddies partners said Mr Gu's interim and final bills had been examined during his initial complaint, later dismissed by the commission, and if there had been any instance of overcharging the legal regulator would have noted it.

Mr Meakes was found guilty of professional misconduct for "gross overcharging" in a matter not connected to any Keddies client. In 2006 Justice Murray Tobias of the NSW Court of Appeal said that his peers would regard his conduct in grossly overcharging a vulnerable client "as disgraceful or dishonourable". It was "inexcusable" that Mr Meakes did not give sworn evidence to explain himself and open to inference that he was "dishonest", the judge said. Mr Watson reviewed Mr Campbell's charges for Mr Wang and called them "potentially constituting gross overcharging".

Hear 2UE interview

Source: SMH (KATE MCCLYMONT AND JENNIFER COOKE)

We're fortunate to have important courts and tribunals of this state to clear up misunderstandings about lawyers' fees and charges. Significantly, what in the past may have been thought to be "gross overcharging" happily turns out to be nothing of the sort. In fact, the whole concept probably doesn't exist at all.

Two recent cases tell the story.

Last month the Administrative Decisions Tribunal walloped the Legal Services Commissioner, Steve Mark, for his wrong-headed thinking on the subject of lawyers' "grossly excessive amounts of costs". It concerned three personal injury cases brought by three members of the same family against the NSW Housing Corporation relating to three separate slipping accidents experienced in the one bathroom. The injured people are Toufika, Fatemah and Mohamed Hussein. Their case ran for six days before Judge Stephen Walmsley in the District Court. The judge heard all three matters together and it was agreed that the evidence in each case would be evidence in the others.

The plaintiffs were successful because the court awarded damages to each. Toufika received $98,000, Fatemah $35,000 and Mohamed $27,000. The Legal Services Commissioner, who is responsible for enforcing standards in the legal profession, took proceedings in the Administrative Decisions Tribunal against the barrister, Serge Galitsky, alleging gross overcharging.

Instead of charging for one case, he charged for three. The commissioner said that in instances like this each client should not be charged the full cost of the hearing; rather, the fees should be apportioned between clients. Galitsky charged each of the three $1600 a day, increased to $2000 if successful. That was $6000 a day, which was in accordance with his fee agreement. So, too, did the solicitor, Maria Bechara. That's $12,000 a day in legal fees during the hearing. The commissioner brought forward John McIntyre, a solicitor, costs assessor and former president of the NSW Law Society, as a witness to say that counsel in this instance should have apportioned his bill between the three clients and not charged three times for one piece of work.

The tribunal did not accept that McIntyre satisfied the test of an "expert" witness and there was a torrent of other judicial objections as well. McIntyre had only "examined" the bills, he hadn't "assessed" them; there was no complaint from the clients about the fees; McIntyre hadn't compared the charged fees with those charged in other similar matters; and he didn't identify the "source of any obligation to apportion the fees". The tribunal threw out the complaint but not before gravely intoning that, "the Legal Services Commission did not fulfil the clear duty it owed to the profession, Mr Galitsky and the tribunal itself in prosecuting this matter without a proper basis for so doing". Mark is seeking leave to appeal, but what hope has he? The latest thinking from the NSW Court of Appeal is not encouraging.

In decisions lower down the stare decisis food chain, the solicitor Leon Nikolaidis had been found to charge a client $28,365.60 when the fair and reasonable amount was $3305.70. After another review it was thought that $5820.60 was the better fair and reasonable amount, still a long way shy of $28,365.60. The commissioner brought proceedings saying the solicitor should be disciplined for gross overcharging. He won in the Administrative Decisions Tribunal and Nikolaidis asked the Court of Appeal to overturn this, which it did. The important finding was that to be found guilty of a disciplinary offence for grossly overcharging the overcharging has to be "deliberate". Ah, that's an elastic concept.

The inflated bill goes out under Nikolaidis's name and he is going to get the benefit of the money, but it was some underling in his office who drew up the bill, so how could poor Leon have gouged the client "deliberately"? Good thinking - and it gets better. If the solicitor was guilty of anything it was for ineffectively supervising the employee who wrote up the bill, and he hadn't been charged with that, so Nikolaidis wins. Actually, he's got other issues arising from other cases including an appeal over a fraud conviction.

Justice Margaret Beazley was the only one of the appeal bench who thought Nikolaidis had deliberately overcharged and said if the majority view was accepted "solicitors would always have their costs prepared by someone else". The upshot is there is no safeguard against gross overcharging by lawyers. The Legal Services Commissioner is powerless to control his flock. Much sophistry about lack of intent will win the day and in fact no one knows what "gross overcharging" means. Thank heavens the judges are applying rigour to an otherwise chaotic situation

Source: Sydney Morning Herald (Richard Ackland)

LAWYERS profiting from the misery of families fighting over wills will have their fees capped after a string of cases where the bill has exceeded the final inheritance. In one case where the total legal bill was more than $600,000, the plaintiffs were awarded $360,000.

Capping fees will also discourage lawyers caught up in explosive family situations from letting their clients use the courts to vent spleen. They will have more incentive to settle, rather than prolong the process to make more money. Attorney-General John Hatzistergos said he wanted to stop lawyers wiping out estates with excessive charges. Legal costs in family will disputes routinely ran into tens or hundreds of thousands of dollars, he said. "Costs can wipe out a huge chunk of a deceased person's will, leaving family members and dependants with virtually nothing," he said. While judges had the power to cap costs, they rarely did so, and that provision applied only if a case made it to court.

"The proposed reforms give lawyers an incentive to settle before the case gets to court, and will strengthen the judge's hand to cap costs when and if it does," Mr Hatzistergos said. The reforms could include setting a sliding scale of costs, taking into account the size of the estate and the number of claimants, or setting a maximum fee. It is understood some lawyers are charging more than $30,000 for one-day Supreme Court cases, while more complex cases regularly attract fees of more than $100,000. Most disputes are decided in court. About 600 cases are heard in the Supreme Court each year, and 250 or so settled out of court. Paul Versteege, from the Combined Pensioners and Superannuants Association, said older people wanted assurance that the wishes set out in their wills would be followed, and their estates would not be consumed by legal fees. Law Society president Hugh Macken also welcomed the move, saying the legal profession acknowledged the need to address costs. "For a long time now the legal profession has been driving alternative dispute resolution," Mr Macken said.

Source: Sydney Morning Herald