What does ‘pro bono’ mean? Are ‘semi-pro bono’ costs agreements legally efficacious?

The Australian Professional Liability Blog Inbox x The Australian Professional Liability Blog via google.com 30 Apr (1 day ago) to me The Australian Professional Liability Blog What does ‘pro bono’ mean? Are ‘semi-pro bono’ costs agreements legally efficacious? Posted: 29 Apr 2014 01:10 AM PDT Hidden away in Trkulja v Efron [2014] VSCA 76, at footnote 49, is a little dictum of the Chief Justice and Justice of Appeal Santamaria which explains their Honours’ understanding of the term ‘pro bono’: ‘In current legal practice, the expression ‘pro bono basis’ is understood to refer to the basis where a practitioner offers his or her services on a voluntary basis without any entitlement to or expectation of remuneration.’ Practitioners should, it seems to me, think carefully before describing themselves as acting ‘pro bono’ when their retainers provide for them to be paid out of the proceeds of a costs order made in favour of their client in litigation to be paid by their client’s opponent in the litigation. There has been uncertainty in relation to the efficacy of a retainer which says ‘I will charge you $300 per hour but will seek to recover it from you only if you obtain an order that the other party pay your costs, and then I will only seek to recover my fees to the extent of the other side’s liability under the costs order’ or any variation of that concept. The issue was that the indemnity principle requires total party-party costs to be no more than the liability of the person seeking the costs order to their own lawyers for costs. If the liability depends on the making of a costs order, until the order is made, the liability is nil, so that the indemnity principle precludes the making of the order in the first place (so the argument goes). The latest important decision to endorse this reasoning, albeit in dicta, was King v King [2012] QCA 81. Now if there is a principle which is properly described as ‘flexible’, it is the indemnity principle in costs law and it is a matter of surprise to me that the uncertainty has persisted so long given the obvious desirability from the perspective of access to justice to sanctioning such arrangements. Happily, the Supreme Court of Queensland recently gave a decision this year which decided as a matter of ratio that an otherwise orthodox hourly rates costs agreement which included the following special condition was efficacious and did not offend against the indemnity principle: ‘No fees will be payable by you unless an order is made by the Supreme Court of Queensland in your favour for the payment of costs and those costs are recovered by us from other parties and any fees charged shall be limited to the amount of costs so recovered.’ The decision is LM Investment Management Limited (Administrators Appointed) v The Members of the LM Managed Performance Fund [2014] QSC 54. It distinguishes King v King. These ‘semi-pro bono’ costs agreements may be ‘conditional costs agreements’, in respect of which the Legal Profession Act 2004 (Vic.) provides additional formal requirements for validity of which commercial lawyers engaged in this kind of pro bono activity ought be wary. It is not clear to me whether the exception to the costs disclosure obligations whenever ‘the client will not be required to pay the legal costs or they will not otherwise be recovered by the law practice’ (s. 3.4.12(1)(d)) would apply in that circumstance. On one analysis, the entitlement to party-party costs is the client’s, not the solicitor’s. The party-party costs are ‘paid’ to the solicitor by the client in satisfaction of the client’s liability for fees even if the client’s opponent in the litigation pays the fees to the solicitor and the solicitor then appropriates them from trust in satisfaction of his or her bill. Prudence suggests — as the text writers love to say — that disclosure be given to clients who retain solicitors on what I call the ‘semi-pro-bono basis’. Another label for this concept might be ‘no costs recovery-no fee’ retainers. Reviews of decisions of the Costs Court’s Judicial Registrar Posted: 28 Apr 2014 06:05 PM PDT The Costs Judge recently clarified the procedure for seeking review of a decision of a Judicial Registrar on a preliminary point of law in a taxation of costs in the Costs Court. Essentially, his Honour said, the procedure in r. 63.56.2, mutatis mutandis, will generally be appropriate, including the 14 day time limit referred to in it. In relation to this kind of decision of a Judicial Registrar, the review goes straight to the Costs Judge, unlike in the case of rulings upon items in a bill of costs during the taxation proper, where there is a bizarre requirement for the Judicial Registrar to reconsider her own decision before it may be appealed to the Costs Judge. Much of the decision making in relation to preliminary legal points in taxations other than party-party taxations is done in Victoria by the Costs Judge (Associate Justice Wood) and by the Judicial Registrar (Gourlay JR). Section 17HA of the Supreme Court Act 1986 provides: ‘Subject to the [Supreme Court's Civil Procedure] Rules, a party who objects to a determination made by a judicial registrar in accordance with this Division … may apply to the Costs Court constituted by a Costs Judge for a review of that determination.’ There are in the Rules no rules associated with such an appeal. There are only rules associated with another species of appeal, namely where in the taxation proper, the Judicial Registrar makes a ruling in relation to an item in a bill of costs: r. 63.56.2. So the Court must devise its own procedure: r. 1.15(1)(b); s. 17D(4) of the Supreme Court Act 1986. The Costs Judge recently found that a decision of the Judicial Registrar of the kind described by s. 17HA and not described by r. 63.56.2: ‘can be reviewed if written reasons have been given by the judicial registrar (63.56.4.(2))’. His Honour continued: ‘the application shall be made by notice (63.56.4(3)) and the notice should state specifically and concisely the grounds of objection to the order and the order sought in its place (63.56.4(4)(b)). The time limit of 14 days to file and serve the application should apply and the time runs from the making of the order or provision of the reasons, whichever is the later (63.56.4(5)). On review, unless the Costs Judge orders otherwise, further evidence cannot be received and no new ground of objection not stated in the notice can be received (63.56.4(6)). On review, the Costs Judge may exercise all the powers and discretions of the Costs Court and can set aside confirm or vary the judicial registrar’s decision and make such further orders as may be necessary (63.56.4(7)).’