Bill Disputes, Mistakes and Official Sources
Itemised legal bills, interest on unpaid fees and paying from trust: your rights
How to read a lump-sum or itemised legal bill, when you can request an itemised bill, the interest cap on unpaid legal costs, trust account deductions and payment plans in Australia.
An Australian lawyer's bill can be a lump-sum bill (a short description and one total) or an itemised bill (each task, who did it, the time and the charge). Under the Uniform Law in NSW, Victoria and WA you can generally ask for an itemised bill within 30 days after a lump-sum bill becomes payable, and the firm cannot sue for the costs until it provides it. Interest can be charged on unpaid costs 30 days after the bill if the bill and agreement say so, at a rate no more than 2% above the Reserve Bank's cash rate target. A firm can pay itself from money it holds in trust only in line with the costs agreement and trust rules, usually after giving you a bill.
This guide is part of how to dispute a legal bill. Figures are illustrative; check rules outside the Uniform Law states with your local regulator.
Lump-sum versus itemised bills
| Lump-sum bill | Itemised bill | |
|---|---|---|
| What it shows | Description of the work and a total | Each item of work, date, person, time and charge |
| Good for | Fixed fees, simple matters | Hourly matters, checking a bill you think is too high |
| Your right | Must include a statement of your rights | Can be requested; must be provided before the firm sues |
A bill under the Uniform Law must be in writing, signed or issued by the firm, and include or be accompanied by a statement of your rights to dispute it, to request an itemised bill and to apply for assessment.
How to read an itemised bill
Look for patterns, not just big numbers:
- Minimum units on tiny tasks. Dozens of 0.1-hour entries for "read email".
- Duplication. Two lawyers billing the same meeting, or a senior person redoing a junior's work.
- Seniority mismatch. Partner time on routine letters the disclosure said a junior would handle.
- Internal conferences. Lawyers talking to each other about your file.
- Work you did not instruct. Research on issues you did not ask about.
- Administration. File opening, printing, scanning or archiving charged as legal work.
Illustrative check: an itemised bill has 64 entries of 0.1 hour for "perusing email" at $440 an hour including GST: 64 x 0.1 x $440 = $2,816. If many were automated notifications or one-line replies, ask for those to be reviewed. You can test hours and rates in the hourly fee estimator.
Interest on unpaid legal costs
Under the Uniform Law, a firm can charge interest on unpaid costs if:
- The costs remain unpaid 30 days after the bill was given, or as provided in the costs agreement
- The bill states that interest is payable and the rate
- The rate is not more than 2% above the RBA cash rate target
Worked example (illustrative): an unpaid bill of $18,000. If the cash rate target were 3.60%, the maximum interest rate would be 5.60% a year. Interest for 90 days: $18,000 x 0.056 x 90 / 365 = about $249. Check the current cash rate target with the Reserve Bank of Australia.
Other states have their own rules on interest, so check your costs agreement and the regulator for your state.
Money in trust and paying the bill
Firms often ask for money on account, held in the firm's trust account. Trust money belongs to you until it is properly withdrawn. Generally:
- The firm must give you a bill (or a request for payment) before taking its fees from trust, in line with the costs agreement and trust account rules
- You can object to a withdrawal if you dispute the bill; tell the firm in writing straight away
- You are entitled to a trust account statement showing deposits and withdrawals
- Settlement money paid into trust is subject to the same rules
If you think trust money has been misused, contact the regulator immediately; trust account breaches are treated seriously.
Payment plans and difficulty paying
- Ask the firm for a payment plan in writing, with instalment amounts and dates and whether interest still runs
- Pay the undisputed part and dispute the rest in writing
- Do not ignore a bill; a lawyer can generally start recovery proceedings 30 days after giving the bill, unless the costs are under dispute or assessment
- If you have serious financial hardship, free financial counsellors (National Debt Helpline) can help you plan
The file and the lien
When you change lawyers, the old firm may claim a lien over your file until its bill is paid. In practice, the new firm often gives an undertaking to protect the old firm's costs so the file can be transferred, especially when a court date is approaching. If the file is urgently needed, raise it with the regulator.
Frequently asked questions
Do I have to pay for an itemised bill?
Under the Uniform Law, a firm generally cannot charge for preparing an itemised bill that you request. Check the rule in your state if you are outside NSW, Victoria and WA.
What if I received no bill at all, just a trust withdrawal?
Ask for the bill in writing. Withdrawing fees from trust without a bill or proper authority is a matter the regulator should know about.
Can a firm charge interest if the agreement did not mention it?
Under the Uniform Law, interest must be disclosed and the bill must state the rate. If neither happened, raise it with the firm and the regulator.
Sources
- Victorian Legal Services Board + Commissioner — what your bill may look like and the interest cap
- Office of the Legal Services Commissioner (NSW) — bills, itemised bills and complaints
- Reserve Bank of Australia — the current cash rate target
- Legal Practice Board of Western Australia — trust accounts and costs in WA
- National Debt Helpline — free financial counselling
