New Zealand Law Society - Lawyers Complaints Service: Cost revision reduces bill

Lawyers Complaints Service: Cost revision reduces bill

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An Auckland barrister, B, has had his bill of $34,260.31 for administering an estate and negotiating settlement of a challenge to the will reduced to $19,860.31 by the Legal Complaints Review Officer (LCRO).

B was acting for a New Zealander living in Australia who had been his client for more than 30 years. The client asked B to fly to Brisbane, where he lived, to prepare a revised will for him.

The client had lived in Australia for more than 10 years at that time and was close to death. B flew to Australia, prepared the will, completed the arrangements, and returned to New Zealand. Shortly after that the client died.

B, who was appointed executor and trustee of the estate, flew back to Australia for the funeral. While he was there he met with beneficiaries under the will, attended the funeral, made some arrangements for the property of the estate, and arranged for the client’s ashes to be returned to New Zealand.

Subsequently the deceased’s two children by a previous marriage, who were not provided for under the will, sought to make a claim under the Family Protection Act.

The will’s main beneficiary, the deceased’s Australian son, engaged B to deal with this matter. B successfully negotiated a settlement.

B then rendered invoices, totaling $34,260.31 including GST and disbursements. This was in addition to the first invoice of $10,150 for the preparation and execution of the will.

The main beneficiary made a number of complaints about the lawyer, including the amount B had invoiced. The size of the estate was relatively modest, about $266,000.

A lawyers standards committee considered the complaint and appointed a cost assessor to carry out an assessment and report to the committee.

The costs assessor recommended that the invoice of $10,150 for preparing and executing the will should be upheld. However, the other invoices should be reduced to $16,485.31, the cost assessor recommended.

B submitted that his fees were fair and reasonable and included work of approximately 60 hours undertaken over many months at a rate of $500 per hour.

The standards committee said it did not consider the $500 rate was excessive, given B’s experience, and that he was entitled to charge that rate.

However, B was unable to provide relevant time records as the file had “got lost around the time he moved chambers”.

After B sought a review of the committee’s decision that he had overcharged, the LCRO, in [2012] NZLCRO 128, noted that: “it is for the practitioner to justify his bill and the absence of clear records by which to do so may make matters more difficult for him”.

B asserted that the costs assessor had made her decision only on a reconstruction of what might have occurred, and not what actually occurred, particularly in respect of the Family Protection claim. However the LCRO noted that, as the file was not available, the lawyer was actually doing the same.

The LCRO also noted that “in the absence of any obvious error, the view of the costs assessor and the committee should not be lightly dismissed”.

The LCRO noted that errors which may change an assessment include procedural omissions, inadequate assessment, unreasonableness, or where proper principles have not been applied.

However, a matter which also needed to be taken into account was that the client who made the will, although resident in Australia, appointed B to act for him even though he knew B lived in New Zealand.

A degree of travel was required to carry out the retainer, and that led to an adjustment of $3,000 plus GST in favour of B, the LCRO said.

The standards committee also found B guilty of unsatisfactory conduct for failing to comply with Rule 3.4 of the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008, which relates to the provision of information.

The committee upheld complaints about failing to provide the client with information in writing on the principal aspects of client service, as to fee, hourly rate, the processes he intended following, and how he would handle any complaints the client may have.

The committee had concerns that the lawyer’s disregard for the rules appeared, on the face of it, to involve a reckless disregard for the requirements of the rules. However the committee did not consider it enough to warrant a referral to the New Zealand Lawyers and Conveyancers Disciplinary Tribunal.

Those determinations of the standards committee were not part of B’s review application. As well as reducing the fee, the standards committee censured B, fined him $2,000, and ordered him to pay costs of $2,500.

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