Barristers' costs in advance

15/02/2008

Barristers are reminded that changes to the legal profession legislation on 1 July 2007 restricted a barrister’s ability to receive� his or her costs in advance. Such costs are permissible only in direct access matters where the barrister complies with certain provisions regarding deposit of the money. The relevant legislation is set out below. Section 252 of the Legal Profession Act 2004 is headed ‘Barristers not to receive trust money’ and provides ‘A barrister is not, in the course of practising as a barrister, to receive trust money’. Section 243 provides ‘trust money means money entrusted to a law practice in the course of or in connection with the provision of legal services by the practice, and includes:(a) money received by the practice on account of legal costs in advance of providing the services, and …..’ [‘law practice’ is defined in s4 of the LP Act to include ‘an Australian legal practitioner who is a sole practitioner’ and thus a barrister is a law practice within the meaning of the Act] The Legal Profession Regulation clause 106A provides: 106A Receipt of trust money by barrister (section 252 of the Act)— exclusion under section 246 (3) of the Act ** Part 3.1 of the Act does not apply to trust money received and held by a barrister if the money is received by the barrister on account of legal costs for legal services in advance of the provision by the barrister of the legal services, in the following circumstances: (a) the barrister is practising as a sole practitioner and the money is received in connection with instructions accepted by the barrister directly from a person who is not a solicitor, (b) the money is deposited, within a reasonable time, after the barrister receives the money, in an account maintained with an ADI in connection with the barrister's law practice, (c) the money remains deposited in that or another account maintained with an ADI in connection with the barrister’s law practice until: �� (i) a bill is given to the client, or �� (ii) the money is refunded to the client, or �� (iii) the money is paid to a solicitor who is later engaged by the client in the matter. [note ‘ADI’ is defined in s4 of the LP Act as ‘ADI means an authorised deposit-taking institution within the meaning of the Banking Act 1959 of the Commonwealth.’ Authorised deposit taking institutions are listed on the APRA web site at www.apra.gov.au/adi/ **15�February 2012