As a costs lawyer in Western Australia, I often come across situations where clients seek advice on applications for extensions of time to file applications for costs assessments.
In this blog post, I discuss the general principles involved in such applications, with reference to the recent decision in Watson v Hewett & Lovitt Pty Ltd [2022] WASC 184 and other relevant cases.
Impact of COVID-19 on Extensions of Time
In Watson, the court acknowledged the impact of COVID-19 business interruptions on the practice of law and the possibility that the pandemic may be a valid reason for an extension of time in certain cases.
This is a significant development, as it reflects the reality of the challenges faced by legal practitioners and clients during an unprecedented time.
Legal Framework
The application for an extension of time was governed by sections 295(6) and 295(7) of the Legal Profession Act 2008 (WA).
These sections provide a 12-month limitation period for applications by clients or third party payers, with a possibility for extension in certain circumstances, such as when the client is not a "sophisticated client" and the court determines it is just and fair to grant the extension after considering the delay and the reasons for the delay.
Factors to Consider
The court's discretion in granting extensions of time must take into account the length of the delay and the reasons for the delay.
In Watson, the court considered various factors, including the absence of a costs agreement, confusion arising from the billing practices, overcharging by the law practice, good faith negotiations between the parties, and the impact of COVID-19 restrictions on the proceedings.
The court also noted that the law practice had previously agreed to an extension of time, implying that it had all the necessary information to deal with the assessment of costs.
Relevant Authorities
Two key cases on the proper approach to extensions of time under section 295(7) are Frigger v Murfett Legal Pty Ltd [2012] WASC 447 and Monopak Pty Ltd v Maxim Litigation Consultants [2007] WASC 112.
In Frigger, the court emphasized the importance of adhering to time limits and the potential prejudice to law practices resulting from delays in seeking assessments. However, the court in Watson distinguished the case on its facts, noting that the respondent had initially agreed to an extension of time, reducing the likelihood of prejudice.
Key Take-aways
Applications for extensions of time to file applications for costs assessments require careful consideration of various factors, including the length and reasons for the delay.
Courts are generally mindful of the potential impact on law practices and may require a clear case to justify an extension.
However, in light of the recent decision in Watson, it is apparent that the courts are also willing to take into account the realities of the COVID-19 pandemic and its impact on legal practice.
Cases referred to in this blog post:
Watson v Hewett & Lovitt Pty Ltd [2022] WASC 184
Frigger v Murfett Legal Pty Ltd [2012] WASC 447
Monopak Pty Ltd v Maxim Litigation Consultants [2007] WASC 112