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Abraham, Romaine --- "Costs column: Costs disclosure obligations for lawyers in the Federal Circuit and Family Court of Australia" [2022] PrecedentAULA 45; (2022) 171 Precedent 52

COSTS DISCLOSURE OBLIGATIONS FOR LAWYERS

IN THE FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

By Romaine Abraham

Heralding the merger of the Family Court of Australia and the Federal Circuit Court of Australia, the Federal Circuit and Family Court of Australia (Federal Circuit and Family Court) commenced on 1 September 2021. With the inception of this Court, a single point of entry and set of rules and forms was created for family law proceedings. The commencement of the Federal Circuit and Family Court also marked the introduction of the Federal Circuit and Family Court of Australia Act 2021 (Cth).

The Federal Circuit and Family Court is made up of two divisions: Division 1, a continuation of the Family Court of Australia, hearing family law matters only; and Division 2, a continuation of the Federal Circuit Court of Australia, hearing family law, migration and other general federal law matters. When exercising family law jurisdiction, both Division 1 and Division 2 of the Federal Circuit and Family Court are managed by the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Family Law Rules).

SOLICITOR AND OWN CLIENT COSTS AND DUTY TO INFORM REGARDING LEGAL COSTS

The Federal Circuit and Family Court does not hear or determine costs disputes under a client’s engagement with their legal practitioner, and solicitor/own client costs disputes continue to be managed at the state and territory level.

Although the Federal Circuit and Family Court does not participate in the arbitration of a solicitor/own client costs dispute, ch 12 of the Family Law Rules creates new costs disclosure obligations and sets out a duty for legal practitioners to give their clients information about legal costs throughout the course of a family law proceeding conducted in the Federal Circuit and Family Court.

In accordance with r 12.05 of the Family Law Rules, the legal practitioner for each party to a property proceeding must tell their client their actual costs, both paid and due, and the estimated future costs for concluding the matter, if a settlement offer is made during such proceedings. The rationale for this requirement, as explained within r 12.05, is to enable the parties of a property proceeding to estimate the amount each party will receive, after costs are taken into account, if the matter is settled according to the settlement offer.

Rule 12.06(2) provides the requirement for written notice. The legal practitioner for each party must give their client written notice of the client’s actual costs up to and including the event, both paid and due, and an estimate of future costs, up to and including the future event, at least one day prior to each court event.

Further, notice of costs must include ‘any expenses paid or payable to an expert witness or, if those expenses are not known, an estimate of the expenses’.^[1]

Rule 12.06 applies to all court events other than an appeal heard under ch 13 of the Family Law Rules.^[2]

At least one day prior to each court event the legal practitioner for each party must file with the Court and serve on any other parties a copy of the written notice given to their client under r 12.06(2).^[3]

Variations of rr 12.06(2) and (3) apply in cases where a party is unrepresented, is receiving legal aid or where an independent children’s lawyer is involved in a proceeding.^[4]

In a financial proceeding, a written notice under r 12.06(2) or a statement under r 12.06(3)(b) must specify the source of the funds for legal costs paid or due.^[5] In turn a party must disclose to their lawyer the source of the funds from which payment is made, where the party makes a payment to a lawyer for their costs or future costs.^[6] However, in accordance with r 1.31 of thee Family Law Rules, the Court may relieve a party of the requirement to disclose the source of funds in certain circumstances:

‘(1) The court may, in the interests of justice, dispense with compliance, or full compliance, with any of these Rules at any time.

(2) If, in a proceeding, the court gives a direction or makes an order that is inconsistent with any of these Rules, the direction or order of the court prevails in that proceeding.’^[7]

There is scope to file and serve the written costs notice within three days of a court event, or within such a time as directed by the Court where a party fails to comply with rr 12.06(3), (4) or (5).^[8]

CONCLUSION

It is therefore imperative that legal practitioners make every effort to ensure costs disclosures made in a written costs notice are as accurate as possible and consistent with previously filed costs notices. While the obligation to provide written costs disclosures at each court event may seem onerous, the requirement as mandated by the Family Law Rules may ultimately assist practitioners to comply sufficiently with costs disclosure obligations regulated at the state and territory level.

Romaine Abraham is a costs lawyer based in Melbourne, Victoria.

^[1] Federal Circuit and Family Court of Australia (Family Law) Rules 2021, r 12.06(2)(c).

^[2] Ibid, r 12.06(1).

^[3] Ibid, 12.06(3)(a).

^[4] Ibid, rr 12.06(3)(b), 12.06(4) and 12.06(5).

^[5] Ibid, r 12.06(6)(a).

^[6] Ibid, r 12.06(6)(b).

^[7] Ibid, r 1.31.

^[8] Ibid, r 12.06(7).