Template costs agreement for firms
(including pro bono and conditional costs options)
QPILCH note to practitioner
 You should consider whether you have any standard terms which need to be added to
this costs agreement or used as a basis to modify its terms.
 It is your responsibility to ensure that you comply with all requirements of the Legal
Profession Act 2007.
DELETE
[FIRM LETTERHEAD]
[Date]
[Client’s name
Address Line 1
Address Line 2]
Dear [Client’s name]
Costs Agreement
1
Thank you for your instructions to act for you in your legal matter.
2
Section 322 of the Legal Profession Act 2007 requires us to enter into a written
agreement with you which sets out the work that we will perform for you and how we will
charge you for that work. This agreement is called a costs agreement.
3
This letter constitutes the terms of the costs agreement between us and sets out the work
that we will perform for you and how we will charge our fees and costs to you.
4
If you accept our offer, this costs agreement will become legally binding on you and on
us. A costs agreement may be enforced in a court.
5
You can accept our offer by:
(a) signing this letter and returning it to us; or
(b) simply continuing to instruct us to assist you.
QPILCH note to practitioner
If you propose that the payment of some or all of the legal costs is conditional on the
successful outcome of the matter to which those costs relate then the costs agreement will
be a conditional costs agreement: see section 323 of the Legal Profession Act. Clause 5
would then not be appropriate and should be replaced by:
“5 You can accept our offer by signing this letter/costs agreement and returning it to us. We
ask that you do so as soon as possible.”
DELETE
Part 1: Preliminary information – rights and disclosures
6
In addition to the terms set out in Part 2 below, there are three important preliminary
things that are dealt with in this letter:


We will set out for you some important rights you have when deciding whether to
enter into the costs agreement with us.
We will disclose to you some other important matters which the law requires us to
disclose to you.
2

7
We will set out for you what will happen next in your legal matter.
We will deal with each of those three things under a separate heading below.
Important rights you have
8
When deciding whether or not to accept our offer, you have the right to obtain
independent legal advice about the costs agreement. That means that you can approach
a lawyer other than us for advice about the costs agreement and what you should do in
response to our offer.
9
You also have the right to negotiate with us in relation to the terms of the costs
agreement. That means that accepting the terms of our proposed costs agreement is not
your only option. You can seek to negotiate with us as to whether we are prepared to
change any of the terms we have proposed.
Other important matters which the law requires us to disclose to you
10 Section 308 of the Legal Profession Act 2007 requires us to disclose certain matters to
you, including that you have the right to be notified by us if there is any substantial
change to the matters required to be disclosed under section 308. We disclose those
matters to you under this heading.
11 We are required to disclose to you the basis on which any liability that you might have to
us for legal costs will be calculated, including whether a scale of costs applies to any of
the legal costs. This is done in clauses 29 to 31 and 64 of this costs agreement.
12 In relation to such legal costs:
12.1
12.2
12.3
12.4
12.5
We are required to provide you with an estimate of the total legal costs if
reasonably practicable or, if that is not reasonably practicable, a range of
estimates of the total legal costs and an explanation of the major variables that
will affect the calculation of those costs. We deal with this in clause 32 onwards
of this costs agreement.
You have the right to receive a bill from us: see clauses 53 to 57 of this costs
agreement.
You have the right to request an itemised bill after you receive a lump sum bill
from us: see clause 59 of this costs agreement.
Details of the intervals, if any, at which you will be billed, are set out in clauses 53
to 57 of this costs agreement.
The rate of interest, if any, that we charge on overdue legal costs, and whether
that rate is a stated rate of interest or is a benchmark rate of interest is set out in
clause 57 of this costs agreement.
QPILCH note to practitioner in relation to Clause 13 below
If the matter is non-litigious, then the following clause should be deleted and the appropriate
alterations made to the terms in Part 2 of this costs agreement.
DELETE
13 Because this matter is a litigious matter, we are required to disclose to you an estimate
of—
(a) the range of costs that may be recovered if you are successful in the litigation; and
(b) the range of costs that you may be ordered to pay if you are unsuccessful.
We deal with this in clauses 41 to 47 of this costs agreement. The law requires us
specifically to draw to your attention these two matters:
(a) An order by a court for the payment of costs in your favour will not necessarily cover
the whole of your legal costs; and
(b) Disbursements may be payable by you even if you enter a conditional costs
agreement.
3
QPILCH note to practitioner in relation to clause (a) above
Section 308(4)(b) requires that the disclosure to the client must include, if applicable, a
statement that if disbursements are payable by the client even if it is a conditional costs
agreement, then such a statement should be inserted.
DELETE
14 You have the right to request written reports about the progress of your matter and the
costs incurred in your matter. We deal with this in clause 58 of this costs agreement.
15 If you have any concerns about our performance of the work or you would like to discuss
your legal costs, please contact us.
16 In the event of a dispute between us in relation to legal costs:
(a)
the following avenues are open to you under the Legal Profession Act 2007:
(i)
Division 7 of Part 3.4 provides for a procedure by which you may apply for an
assessment of the whole or any part of the legal costs; and
(ii) Section 328 provides for a procedure by which you may apply for an order that
this costs agreement be set aside.
(b) We draw to your attention that there are time limits that apply to the taking of the
actions mentioned in the previous paragraph. Those time limits are set out in clauses
60 and 61 of this costs agreement.
17 The law of Queensland applies to legal costs in relation to your matter. However, you
have the right to require an interstate costs law to apply to your matter: see clause 66
What will happen next?
QPILCH note to practitioner
In clause 18, insert a description of what is to happen next. See also clause 22 below where
you must set out the scope of the work you will do.
DELETE
18 The next step in your legal matter is …
Part 2: Terms of the costs agreement
Meanings of terms used in this agreement
19 The following defined terms are used in this agreement
Disbursements – outlays or expenses that a lawyer pays on behalf of a client for goods
or services provided to or for the client.
Indemnity costs – if a court orders an unsuccessful party to pay the other successful
party’s costs on an indemnity basis, this can allow a successful party to recover as much
as 90% of their actual costs.
A court is more likely to order an unsuccessful party to pay costs on an indemnity basis if
the court finds that the unsuccessful party’s claim or defence had no legal basis or was
made vexatiously.
When assessing costs on an indemnity basis, a costs assessor must allow all costs
reasonably incurred and of a reasonable amount, having regard to—
(a) the scale of fees prescribed for the court; and
(b) any costs agreement between the party to whom the costs are payable and the
party's solicitor; and
(c) charges ordinarily payable by a client to a solicitor for the work.
Litigation – proceedings in a court or tribunal.
4
Professional fees – fees payable to lawyers for performing their professional legal
services on behalf of their clients.
Standard costs – if a court orders an unsuccessful party to pay the other successful
party’s costs on a standard basis, this usually allows a successful party to recover
between approximately one third and one half of their actual costs.
Standard costs are task-based rather than time-based, and are calculated on the basis
of a court scale of costs.
When assessing costs on a standard basis, a costs assessor must allow all costs
necessary or proper for the attainment of justice or for enforcing or defending the rights
of the party whose costs are being assessed.
Successful outcome – The circumstances that will constitute a successful outcome to
this matter are:
(a) You receive a benefit or financial compensation in respect of the matter, including an
order or agreement for payment of your legal costs; and/or
(b) You receive an offer of settlement which is a fair and reasonable resolution of the
matter in the circumstances whether or not you accept it.
Client details
20 Your details are:
Client:
If client is an organisation,
the contact person is:
Telephone: [insert mobile numbers as well if applicable]
Email:
Fax:
Postal address:
Street address: [delete if same as postal address]
21 We will be acting for the client and the client or contact person will give us your
instructions.
Scope of the work
22 The work we will do is: [insert description of matter and clarify what work will be done,
particularly if specialist advice is required from third parties].
23 If you request that we extend the scope of the work, then our estimate of fees outlined
below may also change. We will notify you in writing of any increase in the estimate of
our fees within a reasonable period of time after you request that we extend the scope of
the work.
24 If:

the work you require differs significantly from our present agreement; or

you refuse to accept our considered advice in respect of an issue which is
essential for the conduct or satisfactory settlement of your matter;
we reserve the right to renegotiate the terms of this agreement, or to cease acting for
you on reasonable notice.
5
Our lawyers who will be assisting you
25 Work on your file will always be supervised by [insert] of the firm.
26 If you have any concerns about the performance of the work by the firm, please contact
[insert] of the firm.
27 If you would like to discuss your legal costs, please contact [insert] of the firm.
28 Our team will consist of:
Name
Position
Normal hourly rate
(not including GST)
Where appropriate, we may arrange for other lawyers with relevant skills and experience
to work on the matter.
Basis for calculating our professional fees
29 We use hourly rates as a general guide to determining the appropriate charge. Our
Professional fees will be calculated based on the hourly rates set out in clause 28.
30 [DELETE THE OPTIONS NOT USED]
Option 1 – Pro bono basis with no provision for recovering costs from other party
We will be acting for you on a pro bono basis and so will not charge you any
professional fees, regardless of whether or not your case has a successful outcome.
However, in the event that your case does not have a successful outcome, you may be
required to pay the other party’s legal costs.
OR
Option 2 – Pro bono basis with provision for recovering costs from other party (pro
bono with ability to claim costs from the other party)
You are legally liable for payment of our professional fees calculated in accordance with
clause 29 of this agreement. However, in certain circumstances we will waive our right
to insist on payment of all or part of that liability. Those circumstances are identified in
the following subparagraphs:
(a) In the event that your case does not have a successful outcome we will not take
any steps to recover payment of our professional fees from you. However, you may
be required to pay the other party’s legal costs.
(b) In the event that your case does have a successful outcome and:
 there is a costs order made in your favour; or
 you enter into a settlement agreement that provides for your costs; and
 the amount that you recover from the other party for costs is less than the
amount that you owe us under clause 29 of this agreement;
we will not take any steps to recover the difference from you. We will, however, require
payment from you of the amount which you have recovered from the other party for
costs and will take steps to recover that payment from you if necessary.
QPILCH note to practitioner
6
Option 2 only permits recovery in the circumstances when there is recovery from the other
party for costs and then only to the extent of the recovery of costs. It does not provide for
recovery out of any monies which are obtained from the other party which are not specifically
for costs.
DELETE
OR
Option 3 – Reduced-fee basis
QPILCH note to practitioner
Use option 3 where you are reducing your professional fees with the option to uplift those
fees in the event of a successful outcome. Note that under section 324, a conditional cost
agreement can contain a provision to uplift fees by a maximum of 25%.
DELETE
You are legally liable for payment of our professional fees calculated in accordance with
clause 29 of this agreement. However, in certain circumstances we will waive our right
to insist on payment of all or part of that liability. Those circumstances are identified in
the following sub-paragraphs:
(a) In the event that your case does not have a successful outcome we will not take
any steps to recover payment of our professional fees over and above the
amount which is [insert] % of the amount calculated in accordance with clause 29
of this agreement. However, you may be required to pay the other party’s legal
costs.
(b) We will require you to pay the balance of our professional fees if there is a
successful outcome in this matter and will take steps to recover that payment
from you if necessary.
QPILCH note to practitioner
Unlike option 2, option 3 simply removes the waiver in the event that there is a successful
outcome as defined.
DELETE
OR
Option 4 – Fixed-fee basis
QPILCH note to practitioner
Use Option 4 where you are capping your professional fees with the option to uplift those
fees in the event of a successful outcome. Note that under section 324, a conditional cost
agreement can contain a provision to uplift fees by a maximum of 25%.
DELETE
You are legally liable for payment of our professional fees calculated in accordance with
clause 29 of this agreement. However, in certain circumstances we will waive our right
to insist on payment of all or part of that liability. Those circumstances are identified in
the following subparagraphs:
(a) In the event that your case does not have a successful outcome we will not take
any steps to recover payment of our professional fees over and above the
amount of $[insert]. However, you may be required to pay the other party’s legal
costs.
(b) We will require you to pay the balance of our professional fees if there is a
successful outcome in this matter and will take steps to recover that payment
from you if necessary.
QPILCH note to practitioner
7
Unlike option 2, option 4 simply removes the waiver in the event that there is a successful
outcome as defined.
DELETE
31 You may still be required to pay disbursements, pursuant to clauses 37 to 39.
Estimate of the total legal costs
32 We are required to disclose to you an estimate of the total legal costs. If that is not
reasonably practicable, we are required to disclose a range of estimates of the total legal
costs and explain the major variables that will affect the calculation of those costs.
33 In your case, it …
Option 1
is reasonably practicable to estimate the total legal costs, and we estimate the total
legal costs will be $[insert] (plus GST).
Option 2
is not reasonably practicable to estimate the total legal costs, and we estimate that
the range of total legal costs will be between $[insert] and $[insert] (plus GST).
34 The major variables that will affect the calculation of those costs are [insert].
35 This is only an estimate and is not binding on us. It is not a quote. The actual fees will
vary depending on the circumstances. These fees are based on the assumptions set out
above. Those assumptions may not hold true. We propose to charge at our normal
hourly rate for work outside those assumptions.
36 The arrangement with respect to our professional fees does not apply to disbursements.
Disbursements may be payable by you as set out in the following section even if you
enter into this conditional cost agreement and irrespective of whether there is a
successful outcome.
Disbursements
37 Disbursements are the costs involved in legal matters apart from professional fees. They
can include:
(a) barrister’s fees (unless the barrister acts pro bono).
(b) filing and lodgement fees.
(c) search fees.
(d) expert reports, including medical reports.
38 We estimate that in your case, the total disbursements will be $[insert].
39 We will ...
Option 1
charge you for disbursements, whether or not they are recoverable from the other
party.
Option 2
not charge you for disbursements.
Option 3
not charge you for disbursements if they total less than $[insert].
GST
40 If we charge you for professional fees and/or disbursements, and GST is payable in
relation to the services we provided to you, an amount of 10% will be added to those fees
and/or disbursements and will be payable by you at the time we issue our bill.
8
Award of costs by the courts in litigious matters
41 In litigious matters, some courts and tribunals may order the unsuccessful party to pay
the legal costs of the successful party.
42 An order by a court for the payment of costs in your favour will not necessarily cover the
whole of the legal costs set out in this agreement.
43 If you are successful in litigation, we estimate that the range of costs that you may
recover from the other party is between $[insert] and $[insert] (plus GST if applicable).
44 If you are unsuccessful in litigation, we estimate that the range of costs that you may be
ordered to pay to the other party is between $[insert] and $[insert] (plus GST if
applicable). You would be personally liable to pay this amount to the other party.
45 This estimate is based on the court ordering costs on a standard basis.
46 The amounts specified in this section are only estimates and are not binding on us.
47 The percentage ranges outlined above estimate your recovery (or your exposure) on a
standard basis.
Termination of the agreement (and rights to your file)
48 You may terminate our agreement at any time by giving us written notice.
49 If we terminate our agreement, we will give you those documents from your file to which
you are entitled.
50 In any event, we will not assert a lien over your file if this agreement is terminated, and
we will return to you any documents related to your matter that you give us or that we
receive from someone else while we am acting for you.
51 If this agreement is terminated by either party and you have a successful outcome in your
case, and that successful outcome is a result (in whole or in part) of the work that we
have done for you in this matter, we will assert a lien over any judgment or settlement
amount that you receive to secure payment of our costs.
52 Any costs recovered from any other parties and your right to recover them will be subject
to a trust in our favour.
Bills
53 If we are acting for you on a reduced-fee or fixed-fee basis, a bill for that amount will be
issued to you within 30 days [insert ‘of it being incurred’ OR ‘on completion of the
matter’].
54 The bill will clearly set out all items of work done for you and the amount charged for
each item unless a different form has been provided with this costs agreement, and you
have agreed to receive that form at the same time that you agreed to all other terms and
conditions of the retainer. However, a short form bill will still contain sufficient details of
the work done to allow you to decide whether the fees and costs in the account are
reasonable.
55 If we are acting for you on a pro bono basis, or you have become liable to pay the
balance of our normal fees, we will only send you a bill for those professional fees at the
conclusion of the matter if there is a successful outcome. You may request an itemised
bill within 30 days after receipt of a lump sum bill.
56 If disbursements exceed $[insert], we will send you bills on a monthly basis for those
disbursements/out of pocket expenses.
57 Any overdue legal costs will be subject to an interest rate of [insert] %.
Progress reports
58 We will give you, on reasonable request, written reports on the progress of the matter
and/or written reports on professional fees incurred to date (or since the last bill, if any).
9
Please note, however, that we may charge you a reasonable fee for preparing written
reports on the progress of the matter.
Your right to a review of costs
59 If you are not happy with our bill, you can:
(a) Discuss your concerns with us.
(b) Request an itemised bill.
(c) Have our costs assessed by a costs assessor.
(d) Apply to the Supreme Court to set aside this agreement on the basis that it is not fair
or reasonable.
60 If you wish to apply for a costs assessment, you must do so within 12 months from:
(a)
(b)
(c)
when the bill is given to you; or
when you were asked for payment; or
if you didn’t get a bill or request for payment, when you paid the costs.
61 If you wish to apply to set aside this agreement, you must do so within 6 years or such
other time as the law permits.
62 If you apply to have a costs assessor appointed, you agree to pay the costs assessor's
costs regardless of whether the assessment is favourable to you or not.
Quality control
63 We have quality control procedures in place. If you require review by an external auditor,
we require your written approval.
Scales of costs
64 We enclose the scale of costs which applies to your matter. While we do not and are not
required to charge on the basis of these scales, we are required by law to provide copies
of them to you.
Jurisdiction
65 This costs agreement and all aspects of the retainer are subject to the law of
Queensland, and you agree to be subject to the jurisdiction of the courts of Queensland.
66 You have the right to:
(ii)
(iii)
accept or reject any offer we make for an interstate costs law to apply to your
matter.
notify us that you require an interstate costs law to apply to your matter.
Confidentiality
67 [insert]
Privacy
68 [insert]
Cooling-off period
69 You may terminate this agreement by written notice in the five business days after you
sign this agreement.
Note to practitioner
If this agreement is a conditional cost agreement, it must contain a five working day “cooling
off period” under section 323 of the LPA.
DELETE
Yours sincerely
10
[insert name of firm]
I/We agree to the terms of this agreement.
(Client signature)
(Client name)
/
/
(Date)
(Client signature)
[use if more than one]
(Client name)
/
/
(Date)
[Please return the signed letter to us and keep a copy for your records]