Hidden world of family law costs

Some lawyers' reluctance to detail fees means bills may be a nasty surprise to clients. Carol Coulter, Legal Affairs Correspondent, reports.

Eyebrows were raised in legal circles recently when Justice Hardiman criticised in the Supreme Court the level of fees charged in family law cases.

One of the orders questioned in the case, which was appealed from the High to the Supreme Court, was that the husband in the case should contribute €100,000 toward his wife's legal costs. In his judgment setting this order aside, Justice Hardiman commented: "In the course of the hearing, the Court heard of an estimate given to the High Court of one side's costs in this action (far in excess of the contribution to the wife's costs ordered) which caused me surprise and disquiet." He went on to state that costs should relate to the work done, not to the value of available assets.

However, as one litigant in another family law case recently discovered, it can be very difficult to get a solicitor to spell out how the costs relate to the work actually done.

MR F AND his wife were seeking a legal separation. While there were matters to be negotiated, they did not envisage going to court, and had been through mediation. Both of them engaged solicitors to assist in the negotiation of a settlement.

Section 68 of the 1994 Solicitors (Amendment) Act requires that solicitors set out in a letter to prospective clients in all cases an estimate of the fees the client is likely to face. However, there are no penalties provided for in the legislation for failure to comply with this provision, and the courts have found that a failure to provide a Section 68 letter does not in any way deprive the solicitor of his or her right to the full fees billed for.

According to Ken Murphy, director general of the Law Society, a failure to send a Section 68 letter can be the subject of a complaint about the solicitor to the Law Society. However, until new legislation was enacted last summer, no complaint could be brought to a lawyers' complaints committee relating to a family law matter, because the in camera rule meant nothing that occurred in the case could be disclosed to a third party.

A client in a family law case, therefore, who does not receive a Section 68 letter is at the mercy of his or her solicitor when it comes to fees.

This is what Mr F discovered when he did not receive a Section 68 letter, and later received a bill for some €13,500, covering both work done and work yet to be done. He said later in a submission to the Taxing Master that, had he known at the outset what the fees were going to be, he would not have engaged the solicitor, but would have represented himself.

He had no choice but to pay the bill, as his solicitor held crucial documents relating to his taking out a mortgage on a property for his wife, and would not release them without being paid. This is a common practice, which has been criticised in the report of the Competition Authority on the legal professions.

Although he paid the bill in full, Mr F was still anxious as to the basis on which he had been charged, as this bill was greatly in excess of what he had expected, based on his previous experience of legal fees in other matters. So he went for adjudication to the Taxing Master, the High Court officer who deals with disputed fees.

There are two Taxing Masters, James Flynn and Charles Moran, both former solicitors, and Flynn heard this case, where Mr F represented himself.

He presented three submissions in the course of his hearing. One related to the issue of legal costs generally, and drew heavily on economic theory, the Competition Authority report, the preliminary report from Indecon consultants for the authority, and Flynn's own detailed textbook on the taxation of costs. The other submissions concerned detailed queries relating to his solicitor's bill, specifically requesting a breakdown of the nature and hours of work covered by the "instruction fee".

He also questioned the fees paid to a barrister, whom, he said, had been engaged without his consent and, he claimed, was unnecessary, as the matter was not being contested in court. Various specific items were queried, including the global sum of €500 for postage and phone calls.

The solicitor provided a replying submission to the Taxing Master, to which Mr F then replied, stating: "It provides me with absolutely no indication of the time spent on my case, the rate per hour, or the basis on which my fees were calculated. The sum for stamps and telephone calls remains an undifferentiated, rolled-up figure and the 'instruction fee' retains its inviolable sacrosanctity."

His efforts fell on deaf ears in the office of the Taxing Master. In his judgment, delivered last month, Flynn remarked incredulously, including an exclamation mark for emphasis: "Mr F's argument is based on the premise that should a solicitor fail to inform their client of precise figures in respect of fees then those fees ought not to be payable!"

A feature of Flynn's extraordinary judgment is the number of derogatory remarks he makes about this client.

Mr F, in his reply to the solicitor's submission, had said she had attempted to discredit him as "difficult, obstinate, unheeding, complaining, uncooperative and unreasonable".

Flynn quotes these remarks in his judgment, adding: "To this list of attributes one could add selfish, complacent, conceited and blinded by greed. Some people think that all the world should share their misfortunes, though they do not share in the sufferings of anyone else. There can be no other assessment of the stark and decisiveness with which Mr F has described the work rendered to his cause."

Later the Taxing Master comments: "The greatest of faults is to be conscious of none in oneself. Mr F could not see or appreciate the amount of work which had been done on his behalf."

Flynn went on to list items of work carried out on behalf of Mr F, including various phone calls and a meeting between him, the solicitor and barrister. The fee for the barrister's day's work, €1,900 reduced to €1,500 was, he said, "very reasonable indeed".

He made no reference to Mr F's claim that the barrister had been engaged without any authorisation from him. Nowhere in his judgment did he engage with Mr F's central argument, that no breakdown was given of the nature of the work done and the amount of hours worked to justify the bulk of the fee, rolled up in the "instruction fee".

Rather he concluded by stating that there is a presumption that the costs were reasonable when the client, by going ahead with the case, implies approval of the work.

MR F POINTED out to The Irish Times that nowhere did Flynn engage with the vital question of the absence of a Section 68 letter, nor did he give any hint as to what informed his assessment of the fees.

He also omitted any reference to the fact that he had to pay the entire fee under pressure in order to obtain the documents required for the mortgage. Mr F has not yet decided whether to appeal the Taxing Master's judgment to the High Court.

This judgment leaves any family law client who does not receive a Section 68 letter in a very exposed position, as he or she may have no idea what their eventual bill will be, but would be bound to pay it nonetheless, unless he or she can cross the very high threshold of proving that some of the charges are "extraordinary".

This will change when the new costs regime, as envisaged by the Haran committee on legal costs published earlier this year, is implemented. An implementation committee has been set up. But its work will come too late for Mr F.