How solicitors charge their clients
Under the Legal Profession Act 2004, solicitors are entitled to charge fees which are fair and reasonable. Some areas of the law are regulated by fee scales, for example, grant of probate and some workers compensation claims. In most areas of the law, costs may be calculated in any of the following ways:
- a fixed amount
- an hourly rate
- an hourly rate with a ceiling on the maximum amount
- no win, no pay
- a method of charging as negotiated to suit the circumstances.
In addition to their fees, solicitors will charge you for expenses incurred on your behalf, for example, barrister's fees or court fees.
They cannot charge you for:
- preparing a costs agreement
- making disclosures to you, or
- preparing your bill.
Why do solicitors' fees vary?
Fees between solicitors vary due to differences in:
- Expertise – specialists in a particular area often charge more than a non-specialist
- Seniority – work carried out by a partner of a firm will cost more than work done by a junior solicitor
- Location – services in metropolitan areas are often higher than in rural or regional areas
- Urgency – special fees sometimes apply for urgent work.
Compare the legal fees from a number of different solicitors. As with any other service, the lowest cost may not necessarily be the best value.
Can my solicitor charge interest on outstanding fees?
Interest cannot be charged:
- unless the solicitor's bill states that interest is payable and also states the rate
- until 30 days after you have been given the bill.
If a dispute arises about part of a solicitor’s bill it may be to your advantage to pay any amount which is not in dispute, so that interest is not charged on that part of the bill.
Can my solicitor ask for money in advance for costs and disbursements?
Yes, solicitors can ask clients for money in advance for things like barrister's fees, medical reports and filing fees. However, your solicitor must put your money into a trust account until the money is spent in accordance with your directions. The solicitor should provide you with details of how this money is spent on your behalf.
What if I win my case?
If you win your case or if it is settled, then you may be entitled to be repaid part of your costs.
What is ‘no win, no pay’?
An agreement, where you pay your solicitor only if there is a successful outcome, is called a 'Conditional Costs Agreement'. The written agreement should define what a successful outcome is. Solicitors do not charge on a ‘no win, no pay’ basis in criminal or family law cases, or cases where you are seeking damages.
A Conditional Costs Agreement may require you to pay, if your case is successful, an additional amount of costs. This extra amount can be up to 25% of the costs, but cannot be a proportion of, or vary according to, the amount recovered. You do not have to pay this extra amount if your case involves a claim for damages.
The agreement may exclude disbursements and out-of-pocket expenses which you may have to pay regardless of the outcome of the case.
NB: If you lose your case under a Conditional Costs Agreement you may have to pay the costs of the other party or parties to the proceedings. These are called party-party costs.
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