1
LEGAL COSTS EXPLAINED
27 July 2023
Disclaimer:
Nothing in this booklet should be construed as legal advice or advice of any kind. The
information provided herein is for informational purposes only and is not a substitute for
professional legal advice. Readers are strongly encouraged to consult official and alternative
sources and seek the guidance of qualified professionals before making any decisions based
on the contents of this booklet.
Any templates and examples provided are intended as general guidelines and should not be
considered as definitive solutions for individual circumstances. We accept no liability for any
actions taken or decisions made based on the information contained in this booklet.
Please be aware that this booklet is intended for personal use only. Unauthorised sharing or
distribution of its contents is strictly prohibited.
, 2
Contents
.............................................................................................................................................................. 1
.............................................................................................................................................................. 1
LEGAL COSTS EXPLAINED ..................................................................................................................... 1
Chapter 1 - Introduction ....................................................................................................................... 3
Chapter 2 - Legal fees paid to your own attorney ................................................................................. 3
Chapter 3 - Party and party costs ........................................................................................................ 11
Chapter 4 - Attorney and client costs ................................................................................................. 18
Chapter 5 - Attorney and own client costs .......................................................................................... 23
Chapter 6 - Recovery of costs ............................................................................................................. 27
Chapter 7 - Example of a Bill of Costs ................................................................................................. 35
, 3
Chapter 1 - Introduction
1.1. In this set of notes, I will be delving into the intricate world of legal costs,
shedding light on a topic that often remains misunderstood. The
inspiration for this topic arose from a recent interaction I had with a client,
which prompted me to explore the complexities of legal fees and their
recovery in greater detail.
1.2. After successfully obtaining a judgment in my client's favor, we proceeded
to have our bill of costs taxed. However, upon reviewing the taxed bill, my
client expressed confusion over why the amount listed did not align with
the total costs he had already paid. This discrepancy left him feeling
frustrated, as he was unable to recover the entirety of the legal fees he
had incurred.
1.3. This interaction highlighted the critical importance of thoroughly explaining
legal costs and the recovery process to clients before embarking on any
legal matter. Understanding the different scales on which legal costs are
awarded and recoverable is crucial for both clients and legal practitioners
alike. These scales include party and party, attorney and client, and
attorney and own client.
Chapter 2 - Legal fees paid to your own attorney
2.1. Attorneys receive a lot of criticism for the cost of their services, but what
professional service is cheap? Just like doctors and accountants,
attorneys and advocates are experts who spend many grueling years
accumulating the requisite knowledge and expertise.
2.2. Be that as it may, most people and businesses will require the services of
an attorney at least once in their life. Some will even require such services
on a regular basis.
, 4
2.3. The services provided by attorneys are vast and can differ from firm to
firm. Most commonly, you can expect an attorney to provide (at the
minimum) services pertaining to:
2.3.1. Debt collection;
2.3.2. Conveyancing;
2.3.3. Contract interpretation and drafting; and
2.3.4. Divorces.
2.4. As mentioned however, most law firms provide a much wider range of
services, and specialties may differ between firms.
2.5. A relationship between an attorney and their client usually forms during a
consultation at the attorney’s offices. A consultation is generally arranged
by the client after discovering the need for legal assistance.
2.6. Some attorneys require that a deposit be paid into their trust account prior
to the consultation taking place, whereas some require payment of the
deposit only after the consultation. Some attorneys do not require
payment of a deposit at all.
2.7. Deposits are often requested as security for attorneys, as non-payment of
accounts is unfortunately quite common. If the full value of the deposit is
not utilised by the attorney, the balance will be repaid after his fees have
been deducted.
2.8. Deposits are paid into the firm’s trust account and the amount to be paid
will vary depending on the firm and the relevant circumstances.
2.9. Whether or not a deposit is required, it is generally the case that during
the initial consult with an attorney, the client will be provided with said
attorney’s fee structure. The client may also be required to sign a mandate
or agreement inclusive of the fee structure.
LEGAL COSTS EXPLAINED
27 July 2023
Disclaimer:
Nothing in this booklet should be construed as legal advice or advice of any kind. The
information provided herein is for informational purposes only and is not a substitute for
professional legal advice. Readers are strongly encouraged to consult official and alternative
sources and seek the guidance of qualified professionals before making any decisions based
on the contents of this booklet.
Any templates and examples provided are intended as general guidelines and should not be
considered as definitive solutions for individual circumstances. We accept no liability for any
actions taken or decisions made based on the information contained in this booklet.
Please be aware that this booklet is intended for personal use only. Unauthorised sharing or
distribution of its contents is strictly prohibited.
, 2
Contents
.............................................................................................................................................................. 1
.............................................................................................................................................................. 1
LEGAL COSTS EXPLAINED ..................................................................................................................... 1
Chapter 1 - Introduction ....................................................................................................................... 3
Chapter 2 - Legal fees paid to your own attorney ................................................................................. 3
Chapter 3 - Party and party costs ........................................................................................................ 11
Chapter 4 - Attorney and client costs ................................................................................................. 18
Chapter 5 - Attorney and own client costs .......................................................................................... 23
Chapter 6 - Recovery of costs ............................................................................................................. 27
Chapter 7 - Example of a Bill of Costs ................................................................................................. 35
, 3
Chapter 1 - Introduction
1.1. In this set of notes, I will be delving into the intricate world of legal costs,
shedding light on a topic that often remains misunderstood. The
inspiration for this topic arose from a recent interaction I had with a client,
which prompted me to explore the complexities of legal fees and their
recovery in greater detail.
1.2. After successfully obtaining a judgment in my client's favor, we proceeded
to have our bill of costs taxed. However, upon reviewing the taxed bill, my
client expressed confusion over why the amount listed did not align with
the total costs he had already paid. This discrepancy left him feeling
frustrated, as he was unable to recover the entirety of the legal fees he
had incurred.
1.3. This interaction highlighted the critical importance of thoroughly explaining
legal costs and the recovery process to clients before embarking on any
legal matter. Understanding the different scales on which legal costs are
awarded and recoverable is crucial for both clients and legal practitioners
alike. These scales include party and party, attorney and client, and
attorney and own client.
Chapter 2 - Legal fees paid to your own attorney
2.1. Attorneys receive a lot of criticism for the cost of their services, but what
professional service is cheap? Just like doctors and accountants,
attorneys and advocates are experts who spend many grueling years
accumulating the requisite knowledge and expertise.
2.2. Be that as it may, most people and businesses will require the services of
an attorney at least once in their life. Some will even require such services
on a regular basis.
, 4
2.3. The services provided by attorneys are vast and can differ from firm to
firm. Most commonly, you can expect an attorney to provide (at the
minimum) services pertaining to:
2.3.1. Debt collection;
2.3.2. Conveyancing;
2.3.3. Contract interpretation and drafting; and
2.3.4. Divorces.
2.4. As mentioned however, most law firms provide a much wider range of
services, and specialties may differ between firms.
2.5. A relationship between an attorney and their client usually forms during a
consultation at the attorney’s offices. A consultation is generally arranged
by the client after discovering the need for legal assistance.
2.6. Some attorneys require that a deposit be paid into their trust account prior
to the consultation taking place, whereas some require payment of the
deposit only after the consultation. Some attorneys do not require
payment of a deposit at all.
2.7. Deposits are often requested as security for attorneys, as non-payment of
accounts is unfortunately quite common. If the full value of the deposit is
not utilised by the attorney, the balance will be repaid after his fees have
been deducted.
2.8. Deposits are paid into the firm’s trust account and the amount to be paid
will vary depending on the firm and the relevant circumstances.
2.9. Whether or not a deposit is required, it is generally the case that during
the initial consult with an attorney, the client will be provided with said
attorney’s fee structure. The client may also be required to sign a mandate
or agreement inclusive of the fee structure.
