Subdivision E of Order 22 of the National Court Rules 1983 governs the relationship between a lawyer and their own client.
Rule 34
Rule 35 applies to any taxation on a solicitor and client basis except where taxation has been excluded under Section 23 of the Lawyers Act.
Where taxation has been excluded under section 23 of the Lawyers Act, Rule 35 does not apply. Check that section before assuming the Rule governs.
Note also Rule 47, which provides for an application for taxation under Section 63 of the Lawyers Act — a separate route by which a client may have a lawyer’s bill taxed.
Rule 35
All costs shall be allowed except as specified in this Rule.
(2) Costs shall not be allowed in so far as they are of an unreasonable amount, unless the amount has been approved by the client.
(3) Costs shall not be allowed in so far as they are unreasonably incurred, unless incurred with the approval of the client.
(4) An approval for the purpose of this Rule may be express or implied.
Unreasonable amount and unreasonably incurred are two distinct objections — one to how much was charged, the other to whether the work should have been done at all.
In each case client approval cures it. And by sub-rule (4), approval may be express or implied — so a course of conduct, or acquiescence in a known course of work, may amount to approval.
That is a strong reason for lawyers to record instructions on significant steps and on fee arrangements, and for clients to raise concerns at the time rather than at taxation.
Rule 35(5)
Notwithstanding Sub-rules (2) and (3), where costs are incurred which in the circumstances of the case are of an unusual nature and such that they would not be allowed on a taxation of costs on a party and party basis under Rule 24, the costs shall not be allowed, unless it is shown —
(a) that the costs were reasonably incurred; or
(b) that before the costs were incurred the solicitor expressly warned the client that the costs might not be allowed on a taxation of costs on a party and party basis.
Paragraph (b) is a specific warning obligation. Where a step is unusual — engaging an expert of a kind not ordinarily used, briefing overseas counsel, extensive investigation — the lawyer should warn the client in advance and expressly that the cost may not be recoverable from the other side on a party and party taxation.
Note the word “expressly”: implied approval, which suffices under sub-rule (4), is not enough here. Put the warning in writing.
The link to Rule 26 is worth noting: the fees of a second lawyer or overseas counsel may be allowed on taxation only if, and to the extent that, they are certified for by the trial Judge.
Rule 35(6)
Where the client is a disabled person, references to the client in Sub-rules (2), (3), and (4) shall be read as references to his next friend or guardian at law.
See how a child or disabled person sues, and next friends and guardians.
Order 5 provides that money recovered for a disabled person is ordinarily paid into Court rather than paid out, and that the Court may direct how it is dealt with. A next friend approving costs is exercising a responsibility on behalf of someone who cannot.
Why two bases matter to a client
| Party and party — r 24 | Solicitor and client — r 35 | |
|---|---|---|
| Who pays | The other party, under an order | The client, to their own lawyer |
| Starting point | Only what was necessary or proper | All costs shall be allowed except as specified |
| Effect of client approval | Irrelevant | Cures an unreasonable amount or unreasonably incurred cost |
| Unusual costs | Not allowed | Not allowed unless reasonably incurred or the client was expressly warned |
Because the solicitor and client basis is wider than the party and party basis, a successful client with a costs order will usually still owe their lawyer something. That difference is normal, it is not a mistake, and it should be explained before the case begins — not when the bill arrives.
Where the Court orders costs on the indemnity or solicitor and client basis against the losing party, the gap narrows. But that is an exceptional order.
Practical consequences
- Agree the fee basis in writing at the outset. Sub-rules (2) and (3) turn on whether the amount, or the incurring of the cost, was approved by the client.
- Record approvals as they are given. Approval may be express or implied under sub-rule (4), but an express written record is what survives a taxation.
- Give the sub-rule (5) warning before incurring unusual costs, in writing, in terms that identify the step and say that the cost might not be allowed on a taxation of costs on a party and party basis.
- Ask the trial Judge to certify a second lawyer or overseas counsel under Rule 26. Without certification those fees are not allowable at all.
- Bill promptly and accurately. Rule 56 penalises delay, and the one-sixth rule in Rule 56(2) applies without discretion.
Ask at the first meeting what the likely total will be, what will be recoverable from the other side if the case is won, and what the difference is expected to be. That difference is the practical meaning of the two bases.
Where a bill seems excessive, the answer is not to withhold payment but to have it taxed — under Rule 47, an application under section 63 of the Lawyers Act 1986.
Rules 46 and 47
Rule 46 — application for taxation generally.
Rule 47 — application for taxation under Section 63 of the Lawyers Act, the route by which a client may have their own lawyer’s bill taxed.
The taxing officer is the Registrar under Rule 38, and the process is described in taxation of costs. On the document itself, see the bill of costs, and on challenging items, objections.
Sources
- National Court Rules 1983 — O 5; O 22 rr 24, 26, 34, 35, 38, 46, 47
The Lawyers Act 1986, including sections 23 and 63, is not available on PacLII.
Before relying on anything here, read the current text of the National Court Rules 1983 and check for later amendments. If a decision matters to you, get advice — start with the Office of the Public Solicitor, or find a firm in the law firms directory.