To Err is Human

Could lawyers be mere mortals after all?

A recent District Court case has held that expert witnesses are entitled to be paid for services rendered – even when those services are not ultimately required.

The Facts:

  • An accountancy firm brought an action in the Adelaide Magistrates Court against a Melbourne based law firm for unpaid professional fees on account of services it rendered to the law firm for the preparation of an expert report.
  • The accountancy firm was engaged by the law firm pursuant to a letter of engagement dated 16 November 2012 in which it was requested to prepare an expert accounting report for use in proceedings in the County Court of Victoria.
  • The letter of engagement from the lawyers was silent as to the issue of fees, the required date for completion of the report and the date of the trial in the County Court. Importantly, however, the letter concluded with the sentence “We look forward to your report … in due course.”
  • Following receipt of the letter of engagement, the accountancy firm proceeded to prepare the requested expert report and forwarded that report to the lawyers on 24 May 2013.
  • As it transpired, the County Court action had been listed for trial on 28 February 2013 and was settled before the report was received by the lawyers. However, there had been no contact between the parties between the letter of engagement in November 2012 and the delivery of the report in May 2013.

The Issues:

  • The lawyers’ position in the proceedings was that there had been no concluded agreement to perform the work as there had been no agreement as to the method by which the accountancy firm would be paid for its services. Further, the lawyers asserted that the accountants had not conveyed their acceptance of its offer in the letter of engagement and, after a reasonable amount of time had lapsed, the lawyers were entitled to treat the accountants’ silence as a rejection of its request.  In the event the Court considered that a contract existed, the lawyers argued that the accountants’ failure to deliver the report prior to the date fixed for trial constituted a fundamental breach of that contract such that it was entitled to reject the report and refuse to make payment of their fees.
  • The accountants’ argument was that a retainer was entered into with the lawyers on 16 November 2012 and, as such, there was no need for any further contact. Further, once it had been instructed to proceed with the work requested by the lawyers, it was the lawyers who were obliged to inform them of any time constraints, or any restriction as to the quantum of fees for the work.

Ultimately, the Court held that the nature of the letter of engagement (in as much as it was an instruction to prepare a report and not an offer made to accept instructions to prepare a report) was sufficient evidence of the lawyers’ waiver of any requirement to receive a formal acceptance.

It also found that there was a concluded and enforceable retainer and although the report was ultimately not used by the lawyers (as it arrived after the matter had been settled), it was none the less a report which complied with the request made by the lawyers.

For more information, please contact:
Joe De Ruvo

Joe De Ruvo
p.  +61 8 8124 1872
e.  Email me

This communication provides general information which is current as at the time of production. The information contained in this communication does not constitute advice and should not be relied upon as such. Professional advice should be sought prior to any action being taken in reliance on any of the information. Should you wish to discuss any matter raised in this report, or what it means for you, your business or your clients' businesses, please feel free to contact us.

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