Bethscheider v CMC Lawyers Pty Ltd [2018] QDC 133

DISTRICT COURT OF QUEENSLAND CITATION: Bethscheider v CMC Lawyers Pty Ltd [2018] QDC 133 PARTIES: KIMBERLY BETHSCHEIDER (Applicant) v CMC LAWYERS PTY LTD (Respondent) FILE NO/S: D3101/2015 DIVISION: PROCEEDING: Review of Costs Assessment ORIGINATING COURT: District Court Brisbane DELIVERED ON: 17 April 2018 DELIVERED AT: Brisbane HEARING DATE: 16, 17 April 2018 JUDGE: McGill SC, DCJ ORDER: (Review later compromised.) CATCHWORDS: COSTS - Solicitor and client – costs agreement providing for costs to be charged on a time costs basis – effect of agreement – not to be charged on an item of work basis. UCPR r 742. COUNSEL: G J Robinson for the applicant K Wilson QC and N P Hiscox for the respondent SOLICITORS: Londy Lawyers for the applicant The respondent represented itself. (During the hearing of a review of the decisions of a costs assessor on an assessment of legal costs under the Legal Profession Act 2007) MR WILSON: Your Honour, at item 366 you will see that there’s a claim for perusing the letter from the client’s wife. I think, from memory, that’s the one at the bottom of the page. And then the relevant item is the email in response, which I think is at the top of that page. And, in our submission, one unit should be allowed for that. There’s no other charge I’ve been able to pick up that shows that the drafting of that letter or email was charged for. I think it’s a misdescription by the costs assessor. HIS HONOUR: Well, yes, but there was an allowance, item 366, for getting the email on the 14th of May at 12.30. -- 1 of 3 -- 2 MR WILSON: Yes. HIS HONOUR: It just comes back to this business of how time costing works. Are you saying it was more than six minutes to read the email at the bottom of the page and prepare the reply at the top of the page? MR WILSON: Your Honour, I’m not making any comment about the amount of time. I’m simply submitting that if you are entitled to charge the minimum of one unit for receiving and perusing the email and one unit for preparing the response, the way in which it’s been disallowed is for a perusal. HIS HONOUR: No. MR WILSON: It was a separate piece of work. HIS HONOUR: Show me the costs agreement. This is a matter of principle. It’s a matter on which I feel strongly and I have for many years. All right. The relevant passage is in clause 4(a)(i): Legal costs are based on the complexity of legal issues in your claim, the level of skill required by our lawyers, and relate directly to the time spent by our lawyers and support staff on your file. Costs are calculated in hourly rates billed in six-minute increments in accordance with the following schedule – which is so much per hour. Now, why doesn’t that mean from the time you start work on a file until the time you finish work on a file, it’s the length of time you’re on the file in six-minute increments? It’s the number of units that you spend on the file on that occasion, regardless of how many bits of work you do during that period. MR WILSON: Your Honour, I can’t say anything sensible against that. HIS HONOUR: All right. Mr Robinson, do you have any authority to the contrary of what I’ve just put? MR ROBINSON: I know of no such authority, your Honour. HIS HONOUR: No. All right. Well, my view, that’s what this contract means, and that means on a particular day, if you work on a particular file from 10 am till 10.30 am, you charge 30 minutes, which is, what, five units? MR WILSON: Yes. HIS HONOUR: You charge five units whether you do five pieces of work or 50 pieces of work during that half hour. You charge five units. So it’s a question of how much time did [this person] spend on this file on this day? MR WILSON: Your Honour, I take the - - - HIS HONOUR: I strongly suspect that this costs assessment has not been conducted on that basis and is actually still far more than the respondent is entitled to. But -- 2 of 3 -- 3 from now on, each day, you’re going to have to show me that there was more than the number of units spent on the file by that person on one day. If you’re charging six-minute units every time you do anything, people can end up having 25 and 50 hours work, chargeable work per day, and that’s not on. MR WILSON: And I think that’s one of the criticisms of the time costing system. HIS HONOUR: Well, it’s one of the criticisms of the way that time costing is applied. MR WILSON: Yes. HIS HONOUR: And you’re not allowed to do it that way, at least if that’s the terms of your costs agreement. Costs agreement in that basis does not entitle you to charge on that basis. It’s from when you start work on the file to when you finish work on the file in six-minute units or part thereof. So, on that basis - three-six-eight, not shown to be wrong. MR WILSON: And can I thank your Honour for that indication, because I know it’s not uncommon for people just to charge one unit per letter written no matter how many it takes to do in an hour. HIS HONOUR: Exactly. I mean, that’s why, really, this transaction report is useless, because it doesn’t give you start time, finish time. MR WILSON: Well, something might take two minutes, three minutes, and one unit’s charged for each. HIS HONOUR: Yes. MR WILSON: Whereas, in fact, the total is less than one unit. No, I appreciate what your Honour says. HIS HONOUR: The transaction report – you know, you really have to have times for these things. MR WILSON: Or reduce it to less than six minutes per unit, which I think was probably only adopted because there’s 10 units to the hour. HIS HONOUR: Look, I don’t have a problem with the notion that it’s six minutes or part thereof, but it’s the notion that, you get an email which you spend 30 seconds reading, and then you send a reply which is another 30 seconds, and then you charge 12 minutes work for that when, in fact, it’s six minutes. And, you know, it’s the same sort of thing, charging separately for all of these letters. How long does it take you to produce 10 letters? Not six minutes per letter. That sort of stuff. This is the problem, that time costing is not, in fact, being charged on a time basis. It’s being charged on a unit-of-work basis, and in my view it’s a fundamental mistake, the way costs are charged. Okay. What’s the next one? (The parties subsequently compromised the review of the costs assessment.) -- 3 of 3 --