The attorney-general Christian Porter last week introduced new rules for Family Court users and practitioners, with lawyers and their clients both now facing the prospect of being landed with personal costs orders or indemnity costs orders respectively, if they do not actively work to resolve a family law dispute as swiftly as possible.
There is an onus on family lawyers to resolve disputes “quickly, inexpensively and efficiently”, and to ensure legal fees do not become disproportionate to the value of the proceedings, while family law consumers must avoid deliberately causing delays in order to put financial strain on the other party, or refusing to accept a reasonable settlement offer.
The reasoning behind the new rules is that, as Christian Porter puts it, “Legal practitioners play a key role in advising their clients and ensuring that disputes are resolved as quickly and cheaply as possible”. And while most ethical lawyers do act in their clients’ best interest, in recent years there has been evidence that “an unnecessarily litigious approach” has sometimes been taken, to the detriment of family law consumers.
Laws in the Federal Court already exist whereby personal costs orders can be made against solicitors, but until now this has not been the case in the Family Court. A personal costs order is where the court directs a legal practitioner to pay their client all or part of any costs that they were ordered to pay another person. Costs orders can be sought against legal practitioners in cases where there has been serious neglect, serious incompetence, or serious misconduct that has caused the costs to be incurred. Orders may also be sought if a lawyer caused costs to be incurred improperly or without reasonable cause.
In the past, ordering a legal practitioner to pay costs personally has only been ordered in very extreme cases, with courts expected to exercise due care and discretion in determining such matters. It’s important to note that legal practitioners are not expected to judge the credibility of a witness or the reasonableness of a particular argument. Further, a solicitor might have been found to have reasonably have believed their client on an issue, or the solicitor might have acted for a party who has pursued a defence or claim which is obviously doomed to fail. In such a case, the legal practitioner is typically not held to have acted improperly or negligently.
Personal costs orders have, however, been made in cases where costs were incurred in defiance of a client’s express or implied instructions, where costs were unnecessarily incurred through failures to comply with court rules or interlocutory directions, where the lawyer conducted proceedings without the client’s authority, or relied on “untenable defences” for the specific purpose of delaying proceedings, or where the lawyer failed to adequately prepare for trial proceedings, or indeed effectively conduct the proceedings.
Family lawyers will be acting to manage their risk, for example, by ensuring we have a paper trail of client advice and instructions, including warnings of potential costs outcomes; we must also advise clients of the need for full and frank disclosure, and advise the other side of reasons for any delays in providing documents, and so on.
The new rules follow criticism voiced by a Family Court judge last year, in a case where a party’s lawyers were deemed to have incurred “obscenely high legal costs”.
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Source: The Australian (subscription)
Do you need family law advice? Please contact Canberra family lawyer Cristina Huesch or one of our other experienced solicitors here at Alliance Legal Services on (02) 6223 2400.
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