If you are a lawyer acting for a client in a litigation matter in NSW, and were successful in obtaining an order that the other side pay your client's costs of those proceedings, you may be wondering what the next steps are in actually recovering those costs.
In NSW Courts (Local, District, Supreme), the first step is to try to negotiate the costs with the other side. Normally this will involve preparing a without prejudice letter of offer setting out the total costs your client incurred, and the amount of those costs that your client is willing to accept.
In many instances (usually if either side receives sound advice, there is little animosity between the parties, or either side is willing to compromise), the costs can be resolved amicably without a bill of costs. However, sometimes, the respondent may request itemised costs before they consider any offer. At this point, you may decide to provide a copy of your invoices to the other side, or you may instead look at preparing a bill of costs - for negotiation purposes, and if that fails, to be filed for assessment in the NSW Supreme Court.
WHAT IS A BILL OF COSTS
Essentially, a bill of costs is a table setting out the costs which were incurred by your client. There is no template or form for a bill of costs in NSW civil jurisdictions, but generally it is required to itemise each task undertaken (numbered), and include the date the work was undertaken, who undertook the work, and the cost for that work. It should include any disbursements, and Counsel's invoices should be set out item by item into the table.
CAN I PREPARE ONE MYSELF?
Yes, you can prepare a Bill of Costs from your invoices or file yourself. The simplest way is to just copy and paste your timesheets into a table then add in each disbursement.
THAT SEEMS SIMPLE. WHY WOULD I GET A COSTS CONSULTANT TO DO IT?
There are many reasons that we recommend that a costs consultant prepare a bill on behalf of your client. We'll set some of them out below.
REASON 1: Efficiency. Bills of Costs can take days, weeks, months, to prepare. We prepare bills of costs every week. We are extremely fast at trawling through files (even very messy files - no judgment!) and have developed our own software to ensure we capture every minute (or 6 minutes) of time spent working for the client. What might take a non-costs lawyer 30 hours, we can do in 10, or less.
REASON 2: Cost. We bill at a fixed fee for bills of costs. It generally corresponds to the amount of time we spend on the bill. The hourly rates that our fixed fees are based upon are usually much lower than litigation solicitors. This, combined with the speed at which we prepare bills, means that by you retaining us to prepare the bill on behalf of your client, your client is saving money. Not only that, but the fee will bill is normally recoverable on assessment - either in large part or full. Whether the fee is recoverable depends on a number of factors - and we will advise you and your client along the way as to how to take steps to ensure the costs are recoverable (such as making offers and the quantum of those offers).
REASON 3: You aren't out of pocket. The cost of the Bill of Costs are passed on to the client and the client claims our costs as a cost of the assessment.
REASON 4: Maximum recovery of costs (This is the main reason!) You may have heard that party/party costs are normally recovered at about 60-70% and indemnity costs are recovered at about 80-90% of costs incurred. These figures are to be expected when a bill of costs is prepared from your invoices.
But, we often see much higher than these figures. This is obviously dependent on a number of factors including your hourly rates, whether work was undertaken which was not directly relevant to the proceedings, and how you bill the client, but in many cases, we achieve recovery rates of over 95% on a party/party or indemnity basis.
In these cases, this means that not only is your client not out of pocket for our fees, but there is very little "gap" in respect of the fees they paid you vs the fees they recover from the other party. It means a very happy client!
We would be very happy to chat with you about how we can assist you and your client in obtaining the best recovery of costs. Give us a call now on 02 9054 3180.