New Zealand Law Society - Managing disagreements about fees
As a consumer of legal services you have the right to expect a certain level of service from your lawyer for a fair and reasonable fee. The information here is about what you can do when things don’t go as expected.
What is fair and reasonable?
Lawyers are required to charge a ‘fair and reasonable’ fee for the legal services they provide. There are a number of factors that influence whether a fee is fair and reasonable.¹ These include:
- the time and labour expended
- the skill required
- the importance of the matter to the client
- the urgency and circumstances
- the complexity of the matter
- the experience, reputation and ability of the lawyer
- any quote, estimate or fee arrangement provided
- the fee usually charged in the market and location for similar services.
You should first check the information you received when you engaged the lawyer. Your lawyer is required to provide information to you about the basis on which any fee will be charged. You may wish to consider if the bill is consistent with the information provided to you at the beginning – for example, did the lawyer provide any estimate?
Next consider what work the lawyer has done for you – this should generally be described in the bill. Does the description match the services you have received?
Finally, step back and consider whether in the circumstances the fee appears fair and reasonable, taking into account the factors above.
If you still have questions about the bill, the next step is to raise these with the lawyer who has overall responsibility for your work (the information you received when you engaged the lawyer should say who this is).
You can ask the lawyer to provide you with more information about how the fee was calculated or you may have specific questions to ask (for example, if you think the lawyer has gone beyond an estimate). The lawyer should be able to provide you with an explanation.
If you are not satisfied with the response received, you can ask that your concerns are progressed to the lawyer’s internal complaints process. Lawyers are required to have an internal complaints process to ensure that client complaints are handled in a timely and fair way.
If you are in dispute with your lawyer about your bill, you will need to decide whether to pay the fee (in full or in part) while you try and resolve the disagreement. There are practical reasons why you may choose to pay the bill in full first and some factors you will need to consider in making that decision.
Lawyers are allowed to charge interest on any unpaid bills
Lawyers are allowed to charge interest on any unpaid bills while a bill remains unpaid. A lawyer can also take debt recovery action to recover a bill. You should check the Terms of Engagement and client care information you received when you engaged the lawyer as this should include information about what will happen if your bill remains unpaid.
Your lawyer may retain your file until payment is received (subject to any Privacy Act request you may make for your personal information).
Your lawyer may stop working for you. Lawyers are allowed to stop acting for a client if the client doesn’t pay fees on an agreed basis or a reasonable fee at an appropriate time. However, if the lawyer stops acting for you, they must ensure they consider their professional obligations to you and give you reasonable notice to enable you to find other legal representation.
You can still make a complaint even if you have already paid
You can still make a complaint to the Lawyers Complaints Service about fees even if you have already paid them. If the fees are determined to be unfair or unreasonable, the lawyer can be required to fully or partially refund you.
Lawyers are not able to start or continue any action to collect an unpaid bill while the Lawyers Complaints Service considers a complaint.
If you remain unsatisfied with your lawyers’ response to your questions about their fees, you could consider trying to compromise. For example, the lawyer may be prepared to accept part payment or reduce their fee. They might also be prepared to consider payment over time or re-negotiate fees or how fees will be paid or calculated for future work on your matter. This will be up to the lawyer and will depend on the circumstances.
If you and your lawyer cannot agree on the fee, you may want to seek legal advice from another lawyer. This may be necessary if you are concerned that the lawyer may take legal action against you to recover the unpaid bill if you do not pay their fees.
The Lawyers Complaints Service also deals with complaints about lawyers’ fees. See how the Standards Committees assess complaints about fees. As indicated above, lawyers are not allowed to start or continue any action to collect an unpaid bill while the Lawyers Complaints Service considers a complaint.
Other organisations that offer services and useful resources about disputing a debt or raising issues with a bill include: