Historically the Courts conducted the business of taxation. In the context of solicitor and client taxations, taxation was a process undertaken by a court’s officers, commonly called taxing officers, to value legal services independent of the solicitor who had drawn a bill to the client with the aim of and preventing him from overreaching or oppressing the client by that bill.
Assessment, the commonest name replacing taxation, continues this purpose of solicitor and client taxation, using persons commonly termed assessors. The method of their appointment, and their role, powers and discretions differ from jurisdiction to jurisdiction.
However, in New South Wales, the Northern Territory and Queensland, assessors are outsourced members of the private profession and chosen on a matter-by-matter basis.
In the chapter of Quick on Costs titled Solicitor and Client Assessment, we make a jurisdictional analysis of the processes of solicitor and client assessment. We omit any consideration of the three federal jurisdictions, the High Court of Australia, the Federal Court of Australia and the Family Court of Australia, which have renounced jurisdiction over solicitor and client costs or where the exercise of that jurisdiction is unlikely to be encountered in practice.
The jurisdictional analysis of assessment deals with these topics and in this order:
- assessors, their appointment, role and powers [100.110]; and
- on a jurisdiction by jurisdiction basis (ACT [100.310], NSW [100.320], NT [100.330], Qld [100.340], SA [100.350], Tas [100.360], Vic [100.370] & WA [100.380]),
- the jurisdiction over assessment: ie who can apply and when can they apply;
- how do those who can apply in fact have to apply;
- the course and conduct of assessment (what happens when they apply);
- conclusion of the assessment, including who bears the costs of costs assessment and enforcement; and
- review and appeal of assessment.
Increasingly disputes are revolving around the time limits applying to the bringing of assessments and who must pay the costs of the costs assessment.
Broadly, a 12-month time limitation only applies to final bills, as an interim bill can be subject of an assessment at the same time as a final bill during the relevant retainer: Mishra v Bennett and Philp Pty Ltd  QSC 158, . The problems this raises has been subject of two important recent cases: see Mishra v Bennett and Philp Pty Ltd  QSC 158 (see [100.340.20]) and Martinez v Al Maha Pty Ltd  NSWSC 932 (see [100.320.130]).
A Court may be able to extend time for the client to seek assessment. There is a divergence between the LPA jurisdictions (which allow extensions if the Court is satisfied that there is a sufficient reason for the delay in seeking assessment) and the Uniform Law jurisdictions (where the Court may extend time if it is just and fair for the assessment to occur after time has elapsed). At present the Uniform Law jurisdictions are New South Wales and Victoria, with Western Australia shortly to join them.
These time limits are in addition to other time limitation periods which govern the solicitor and client costs process. See, for instance, the unanimous decision of the New South Wales Court of Appeal in Gilmore Finance Pty Ltd v Aesthete Pty Ltd (No 3)  NSWCA 114 where the time limit to institute an appeal against the review of a costs assessment barred the consideration of the appeal, and Allen v Ruddy Tomlins and Baxter  QCA 103, where the conclusion of the costs assessment was time barred (see [100.340.20]).
Costs of costs assessments
Typically, under both the Legal Profession Acts where they apply and the Uniform Law, costs follow the event in an assessment (ie “loser pays”), with statutory exceptions moving the liability for costs to the solicitor or exposing him or her to possible professional disciplinary action.
In some jurisdictions the liability for costs moves in accordance with a modernised “one-sixth rule”. Since the early 18th Century, the one sixth rule sought to discourage a solicitor from overcharging by providing that the solicitor should pay the costs of a taxation if on taxation a court taxing officer reduced the solicitor’s bill by one sixth or more.
The sanction now, upon completion of an assessment, is that if, a solicitor’s bill has been reduced by a decimalised figure of 15% or more or if the assessor is satisfied that the solicitor has failed to comply with disclosure requirements, then the solicitor will pay the costs of the assessment unless the assessor orders otherwise.
The second is that where a reduction exceeds 15%, a reference for disciplinary action may be possible and where the solicitor has grossly overcharged the client, or the costs assessment has raised conduct which may amount to professional misconduct the reference may be obligatory see, for example, Legal Profession Act 2007 (Qld), s.343.