A recent decision by the New South Wales Court of Appeal, Bingham v Bevan [2023] NSWCA 86, offers insights into the repercussions of not adhering to the terms set forth in a costs agreement.

Read my earlier blog post here about a previous NSWSC single judge decision in this dispute, which was about the costs estimates aspect of things

In this blog post, I analyse the NSWCA decision and explain the Court’s rationale with respect to the enforceability of costs certificates.

The Bingham v Bevan Case

The Bingham v Bevan case is centred around a dispute between a solicitor (Bingham) and a barrister (Bevan) regarding the payment of legal fees.

The dispute arose from a costs agreement between the parties that contained a clause (cl 4) specifying that the barrister's fees were contingent upon the solicitor recovering funds from the sale of the client's property or through the client's bankruptcy.

The barrister sought a costs assessment, and the costs assessor found that the costs agreement was void due to non-compliance with the disclosure requirements of the Legal Profession Uniform Law Application Act 2014 (NSW) (the Application Act).

Despite the void costs agreement, the assessor issued a certificate specifying the amount of costs to be paid by the solicitor to the barrister.

The barrister filed the certificate and obtained a judgment in the Common Law Division, which the solicitor appealed.

The main issue in the appeal was whether the barrister was entitled to recover the assessed fees, given the contingent nature of the costs agreement and the fact that the contingency had not been satisfied.

Analysis of the Decision

The Court of Appeal, in its judgment, found that the costs agreement was void due to the solicitor's non-compliance with the disclosure requirements under the Application Act.

However, the Court emphasised that the enforceability of the costs agreement was not solely dependent on compliance with these requirements.

The Court also noted that the recovery of the barrister's fees was contingent on the solicitor obtaining funds from the sale of the client's property or through the client's bankruptcy, as stated in cl 4 of the costs agreement.

Since the contingency had not been met, the Court held that the barrister was not entitled to recover the fees.

The Court allowed the appeal, set aside the judgment in the Common Law Division, and ordered the barrister to reimburse the solicitor for the amount paid pursuant to a garnishee order.

Key Takeaways:

These 2 NSWSC Bingham v Bevan decisions highlight the following:

Compliance with disclosure requirements: Legal practitioners must ensure they comply with the disclosure requirements set out in the Application Act, as non-compliance can render a costs agreement void.
Enforceability of costs agreements: The terms of a costs agreement, including any contingent fee arrangements, must be clear and enforceable. Failure to satisfy the contingencies can render the fees non-recoverable.
Costs assessment and judgment: Obtaining a costs assessment and judgment based on a void costs agreement can lead to complications and potential reversal of the judgment, as seen in the Bingham v Bevan case.
Importance of clear communication: Legal practitioners should ensure they communicate clearly with their clients and fellow professionals about the terms and conditions of a costs agreement, including any contingent fee arrangements. Proper communication can help avoid disputes and misunderstandings between the parties involved.
Consequences of a void costs agreement: It is essential for legal practitioners to be aware of the potential consequences of a void costs agreement, as it may impact their ability to recover fees. In the Bingham v Bevan case, the barrister was unable to recover the assessed fees due to the void costs agreement and the unsatisfied contingency.