New Zealand Law Society - Failure to provide regular invoices

Failure to provide regular invoices

Published on 11 March 2021

Two lawyers have been fined $1,500 each for failing to provide a client with interim invoices in relation to proceedings arising from a relationship breakdown. The Committee remarked that the fine would have been higher had it not been for the fact that the lawyers had so far not been paid and might never fully recover their fees.

Letter of engagement and client care information

The complainant maintained she had never been provided with a letter of engagement. The lawyers said that this was handed to the client at a meeting approximately two weeks after they were instructed.

The Committee ultimately concluded that it was more likely than not that the lawyers had provided a letter of engagement. It observed, however, that this factual dispute could have been avoided if only the practitioners had sent the letter by some verifiable means such as email and requested the client return a signed copy.

The Committee noted that the requirement to provide terms of engagement and client care information is a key feature of the consumer-protection focus of the Lawyers and Conveyancers Act 2006 (LCA). Clear and comprehensive terms of engagement mean that both lawyer and client understand their responsibilities and obligations under the retainer.

The Committee considered whether, by reason of the delay in providing the terms of engagement and client care information, the practitioners had failed to discharge their obligations under Rules 3.4 and 3.5.

Rule 3.4 provides that the information must be provided “in advance” as set out in 94(j) of the LCA and recommends that lawyers provide the information prior to commencing work under a retainer. Rule 3.5 meanwhile states that the information it lists must be provided “prior to undertaking significant work under a retainer”.

The Committee noted that the question of whether Rule 3.4 imposes a strict requirement to provide the information prior to any work commencing has been the subject of judicial consideration. In McGuire v Manawatu Standards Committee, the High Court considered that it was only a recommendation and that view was shared by the Committee.

Given the short delay in providing the letter of engagement, it considered that the practitioners had not breached Rule 3.4 but, even if they had, this would have only been a technical breach which would not have warranted a disciplinary response.


The terms of engagement stated that interim invoices would be sent to the client, usually monthly. However, the complainant only received an invoice after a year. She was not kept informed about the approximate value of the unbilled time that had been spent. When the retainer ended, the complainant was shocked to learn that she owed over $120,000 in fees.

The Committee observed that if the complainant had been invoiced regularly, she would have been in a better position to make decisions about the conduct of her various matters. Without invoices, the complainant was deprived of the information she needed to determine whether it was economically viable for her to continue the proceedings.

The Committee considered that there was little point in the practitioners providing terms of engagement if they had no intention of adhering to them.

By failing to provide regular interim invoices, the lawyers were guilty of unsatisfactory conduct. In addition to the fines of $1,500 each, the lawyers were ordered to pay costs of $250 each to the New Zealand Law Society.

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