COSTS - pro bono representation - contingency fee - representation for appellant on appeal - appellant impecunious - counsel agreeing to recover normal costs if and only if appellant successful - appellant successful - respondent declining to pay counsel's fees - set-off of costs order at first instance - motion for referral to counsel under Order 80 as a legal practitioner on the Pro Bono Panel - whether such a referral can be made retrospectively - whether single judge has power to make an order under Order 80 - whether contingency fee arrangement unlawful or contrary to public policy
Mr O’Connor SC made an agreement to represent the impecunious appellant, Mr Schokker, in an appeal against the Federal Commissioner of Taxation on the basis that Mr O’Connor SC would only recover his fees if the appeal was successful. The respondent argued that he was liable to the client, not counsel, and that the costs order was subject to a set off for costs awarded against the appellant before the primary judge. Mr O’Connor was unaware of the operation of O 80 of the Federal Court Rules, which deals with the referral of a litigant to the pro bono panel for legal assistance, at the time of representing the appellant and tried to invoke O 80 retrospectively in order to attempt to recover legal fees from the Commissioner directly under O 80 r 9 of the Federal Court Rules.
Wentworth v Rogers
There are a series of cases in the NSW Supreme Court between Wentworth & Russo and Rogers which date back to 1998. Of relevance to the issue of cost recovery when acting pro bono are those cases that concern the interpretation of the agreement between the plaintiffs and their lawyers concerning costs in circumstances where the court has ordered that the plaintiff pay the defendants costs.
The allegation central to the plaintiffs’ challenge to assessments by a cost assessor was that there existed an unwritten agreement between them and their lawyers that no costs would be charged – that this was a ‘pure pro bono’ arrangement. The costs assessor construed the agreement as a no win/no fee agreement and ordered that the plaintiff was liable to pay the costs order.
Wentworth v Rogers [2002] NSWSC 709 (15 August 2002) Barrett J
PROCEDURE - costs - assessment of costs by costs assessor - appeal against assessment - PROFESSIONS AND TRADES - legal practitioners - basis of retainer - "pro bono" - "no win/no pay" - right to be paid by client - estoppel - quantum meruit.
Held: at para 94; The assessor’s reasons show sufficiently that the possibility of such an agreement, arrangement or representation [denying the lawyer’s right to charge regardless of circumstances] was in his mind as he reviewed the material before him and reached the conclusion that a “no win/no fee basis” had applied, rather than what he called “pure pro bono (ie, pro bono publico)”, a basis the assessor said “prima facie imposes no liability on the party receiving the benefit for payment of costs to his legal practitioners”. Application for leave to appeal the costs assessor's decision was dismissed.
Barett J subsequently held himself disqualified from hearing an appeal against the costs assessor as to a matter of law having refused leave to appeal. Leave to appeal was granted.
Wentworth v Rogers [2005] NSWSC 143 (21 February 2005) Patten AJ
This was an appeal against the decision of the costs assessor.
Held at para 44: It was not parliament’s intention to require legal practitioners, upon pain of deprivation of costs, to enter into a written costs agreement with their clients. If they choose to do so, the agreement will be given force and effect, subject to s 208D. If they choose to enter into no costs agreement, or an oral one rendered void by s.184 (4), then the rights of the parties will be governed by the general law.
It was held that the solicitors for Mr Rogers, as a matter of law, are not precluded from recovering costs from their client. Appeal against decisions of costs assessor dismissed.
This decision went on appeal to the NSW Court of Appeal
Wentworth v Rogers; Wentworth & Russo v Rogers [2006] NSWCA 145 (7 June 2006) , Santow JA Basten JA Hislop J
COSTS – Indemnity Principle – costs orders made against Appellant – costs agreement between Respondent and his lawyers that no obligation to pay until successful recovery of costs from Appellant – whether Appellant liable to costs order if Respondent had incurred no liability to pay his lawyers.
Basten JA said at para 130: Labels are notoriously slippery customers. Lawyers frequently do work on a no-fee basis and describe it as acting ‘pro bono publico’. Many public charities, community groups and similar organisations obtain free legal services on this basis
And at 132, “Whether the term ‘pro bono’ now extends to situations where the lawyer, satisfied that the client has a meritorious claim, nevertheless enters a speculative fee arrangement to charge a usual fee, taking some risk of non-payment, is a question of fact to be determined in the context of the particular case (emphasis added)”.
The appeal from the decision of Patten AJ was allowed and the construction of the “costs agreement” referred back to the Supreme Court for further determination.
Wentworth v Rogers [2007] NSWSC 1399 (29 November 2007), Price J
Orders setting aside the costs assessments orders of 2001 were sought by the plaintiff. The court declined to set them aside for lack of evidence but did grant a permanent stay of the costs assessments. The issue of pro bono was not considered.
