Legal Profession Uniform Law

Frequently Asked Questions

• Costing and Trust Accounts - A client has given me cash of $10,000 dollars to pay deposit in my trust account pending the settlement on a property. What are my reporting obligations if any?

  As this is a cash sum received by you, you are obligated to report this to AUSTRAC. Note that if the amount was paid directly into your trust account there would not be a reporting obligation on your part.

  See AUSTRAC: Reporting obligations for solicitors.

• Costing and Trust Accounts - Barristers’ clerks also have trust accounts. Where are the rules that relate to this?

  The rules for approved clerks are set out here (PDF). Approved Clerks are treated as a law practice under Section 89 of the Legal Profession Uniform Law (Vic).

• Costing and Trust Accounts - Can I charge for rendering a bill?
  No. This is prohibited by s191 of the Legal Profession Uniform Law (Vic)
• Costing and Trust Accounts - Does the LIV or the VLSBC accredit trust accounting software?

  The Law Society of New South Wales provides certification of trust accounting systems under the Uniform Law

• Costing and Trust Accounts - I hold money in trust for the payment of counsel’s fees as requested by the barrister. The client’s matter is completed. What procedures may be followed for the payment of these fees?

  Note that it is the solicitor, not the client, who engages the barrister. Assume that the disclosure requirements have been met. When the matter is completed, the barrister renders a bill to the solicitor. The solicitor generally chooses to pay this from the office account. The procedure followed needs to comply with Rule 42(5) and (8) of the Legal Profession General Rules 2015 . In other words, the office account is debited when the solicitor has paid the fee on behalf of the client. The solicitor may then transfer the money out of the trust account after having given or sent the client a request for payment or a written notice of the withdrawal.

  For a payment to be made direct from trust to the barrister, a bill would need to be given to the client by the law practice and the procedures for R 42(3) would need to be met.

  See also the FAQ in LIV Costs Law Resources.

• Costing and Trust Accounts - I hold money in trust to pay for searches as part of a conveyancing transaction. The searches have already been paid for by the practice out of the office account. The clients now seek the return of the money held in trust.

  See R 42(4), (5), (7) and (8) of the Legal Profession Uniform General Rules 2015. If the relevant account has been debited then upon written notification of the withdrawal to the client, the money can be transferred from the trust account to the office account as per Rule 42.

• Costing and Trust Accounts - Is the PRO inclusive of GST?

  The Practitioner Remuneration Order is inclusive of GST.

• Costing and Trust Accounts - What is a non-associated third party payer?

  Under s 171(1)(c) and (2) of the Legal Profession Uniform Law (Vic) is not a client but is under obligation to a client or another person to pay under the contract or legislation or otherwise. An example of this is where a purchaser of property who has breached the contract of sale is under an obligation under the contract to pay for the vendor’s legal costs of that breach.

• Costing and Trust Accounts - When meeting disclosure obligations are total legal costs inclusive of GST?

  Total legal costs as referred to in s 174(1) of the Legal Profession Uniform Law(Vic) includes professional costs, disbursements and GST: see cl 20 of the Legal Profession Uniform Law Application Amendment Bill 2015 and the Legal Services Council Guideline and Direction Costs Estimates (March 2016 - PDF).

  S 174(3) Legal Profession Uniform Law (Vic) requires that as part of cost disclosure a practitioner ‘must take all reasonable steps to satisfy themselves that the client has understood and given consent to the proposed course of action...’

• Costing and Trust Accounts - Where can I find guidance on what might constitute ‘reasonable steps’?

  The Law Society of NSW: Cost Disclosure Reasonable Steps (PDF).

  See also Law Institute Journal Article: Prevent bill shock and avoid complaints.

  As to whether s 174(3) imposes a disclosure obligation see the cases below. In Frigger v Madgwicks [2018] VSC 281 Judicial Registrar Gourlay found that s 174(3) did not impose a disclosure obligation. In a more recent NSW decision, Malvina Park Pty Ltd v Johnson [2019] NSWSC 1490, Justice Walton determined that compliance with s 174(3) is a disclosure obligation on a law practice, the breach of which may render a costs agreement void in accordance with s 178(1)(a). The court found that what amounts to a breach of s 174(3) will vary with the circumstances.

• How should my stamp be worded?

  The Legal Services Board + Commissioner and the LIV recommend if you are arranging for a new stamp for certifying documents, the new wording should include your name and address, followed by the phrase:

  "An Australian legal practitioner within the meaning of the Legal Profession Uniform Law (Victoria)"

  You can cross out the reference to the Legal Profession Act 2004 and write ‘Legal Profession Uniform Law (Victoria)’ on any document generated on and from 1 July 2015 that requires your stamp. You should also initial the alteration.

• Where can I find costs precedents compliant with the Uniform Law?

  The LIV is pleased to offer its members a series of cost precedents in Word format, available here.

• Where can I find the standard short disclosure form?

  Under s174(5) of the Uniform Law, law practices may disclose using a standard short disclosure form where total legal costs are are likely to be between $750 and $3000 (excluding GST and disbursements). The form is found in the Legal Profession Uniform General Rules 2015, and is also available here (when the link opens, click on "For law practices (other than barristers)", and a Word document will open).

  The Legal Services Council has published a practitioner information sheet which explains how to use the form. The Legal Services Council also recommends that a client information sheet be provided to clients together with the form.

• If I began a matter before 1 July 2015 and it continued after then, is it affected by the Uniform Law?

  Transitional provisions in the Legal Profession Uniform Law (schedule 4, clause 18) provide that the provisions of the Legal Profession Act 2004 (Vic) regarding legal costs apply to a matter if your client first instructed your law practice in the matter before 1 July 2015. If your client instructs your law practice on or after 1 July 2015, the new legal costs provisions in the Legal Profession Uniform Law will apply to that matter.

• If a client instructed a law practice before 1 July 2015, should the client's rights be provided under the LPA or the Uniform Law?

  The Legal Services Board + Commissioner has provided the following response to this question: Section 3.4.35 of the LPA provided that a bill must include or be accompanied by a statement notifying the client of certain rights in the event of a costs dispute. Falling, as it did, within Part 3.4 "Costs Disclosure and Review" of the LPA, s3.4.35 seems to be a provision of the old legislation relating to legal costs, so a law practice would be expected to issue a bill with a written statement in accordance with s3.4.35.

• If a client instructed a law practice before 1 July 2015, will the LPA apply if there is a dispute about costs?

  The Legal Services Board + Commissioner has provided the following response to this question: Whether the LPA will apply will depend on whether (or the extent to which) the conduct happened or is alleged to have happened before or after the commencement day. Answering that question will be subjective and may be complicated where matters straddle 1 July 2015. In such matters, the Legal Services Board + Commissioner will consider the facts of the particular case and closely liaise with the law practice and client to determine the law applicable to the conduct or to different parts of the conduct.

• Is it still possible to specify a "range" when disclosing an estimate of legal costs?

  Under s174(1) of the Uniform Law, law practices are to provide to clients "an estimate of the total legal costs". There is no longer a reference to provision of a "range" of estimates as under the LPA. The consensus view is that it is no longer possible to specify a range.

  The possibility of "staged" disclosure has been raised, where a law practice discloses an estimate of total legal costs, but this is then broken into different stages of a matter. The Legal Services Board + Commissioner has released RPA Alert #22 to all practitioners on this issue, and it should be available shortly on the Board’s website.

• Do bills need to be signed?

  Section 188 of the Uniform Law provides that a bill given by a law practice or a letter accompanying the bill must be signed by a principal of the law practice designated as responsible principal, or nominate a responsible principal for the bill. If the bill is not signed by a responsible principal or one is not nominated, then all principals of the law practice are taken be responsible principals for the bill. In order to comply with Uniform Law, it appears that bills do not need to be signed or can be signed by persons other than the responsible principal.

• My hard copy of the Act differs from online – does s174(9) in the Legal Profession Uniform Law still apply?

  Section 174(9), which specified that "total legal costs in a matter do not include GST and disbursements" was repealed by the Legal Profession Uniform Law Application Amendment Act 2015 (Vic). Various other provisions were inserted by that Amendment Act into the Legal Profession Uniform Law to specify disclosure obligations regarding GST disbursements. The LIV recommends that you access an up-to-date copy of the legislation here. 

• How can money be withdrawn from a trust to pay legal costs?

  Rule 42 of the Legal Profession Uniform General Rules 2015 specifies the different ways in which money can be withdrawn from trust for payment of legal costs. It is important to note that rule 42(6) allows withdrawal in accordance with a costs agreement, but only where the client is a commercial or government client. Therefore, although rule 42(4) allows withdrawal in accordance with instructions received that authorise the withdrawal, it appears that withdrawal may not be permitted if the instructions are contained in a cost agreement.

  The LIV costs precedents refer to withdrawal of trust money in accordance with the Uniform Law and the General Rules, so law practices will need to review rule 42 and withdraw only in accordance with a procedure in that rule.

• When do law practices need to provide an original trust receipt?

  Rule 36 of the Legal Profession Uniform General Rules 2015 requires law practices to make out a receipt as soon as practicable after trust money is received or after the law practice receives confirmation of the deposit from the relevant ADI. Rule 36(4) requires law practices to give the original receipt as soon as practicable to the person from whom the trust money was received – it only needed to be given "on request" under the Legal Profession Regulations 2005. The LIV is considering the practical issues regarding compliance with Rule 36(4) based on practitioner concerns, and will provide advice to members shortly.

• Do I need to do anything else about my trust account?

  You should read the Trust Money and Trust Account fact sheet and the relevant section in the Legal Profession Uniform Law Guide.

• When I provide advice to borrrowers or guarantors, do I need to complete an Australian legal practitioner’s certificate?

  Rule 11 of the Legal Profession Uniform Legal Practice (Solicitors) Rules 2015 requires use of various forms referred to in that rule when Australian legal practitioners explain security documents to borrowers and guarantors, as follows:

  • Law Institute of Victoria Australian Legal Practitioner’s Certificate 1 (Schedule 1) (PDF)
  • Law Institute of Victoria Australian Legal Practitioner’s Certificate 2 (Schedule 2) (PDF)
  • Law Institute of Victoria Certificate by Translator/Interpreter (Schedule 3) (PDF)
  • Law Institute of Victoria Form of Acknowledgement given by a Borrower or Surety to the Certifying Australian Legal Practitioner (Schedule 4) (PDF)
• How do I get a copy of the Legal Profession Uniform Law Guide?

  It is available for members to print in the Useful Resources section of the Legal Profession Uniform Law section of the website.

• What is the LIV doing to help members understand and adapt to the Uniform Law?

  There are a range of Useful Resources available to LIV members. LIVing Ethics workshops and other professional development seminars also provide practical advice and guidance on how to comply with the new regime. You can also find helpful articles and news, as well as submissions from the LIV regarding the Uniform Law, on our Staying Informed pages.