Victorian Consolidated Legislation

Legal Profession Act 2004 - SECT 3.4.17.

Effect of failure to disclose

3.4.17. Effect of failure to disclose



(1) If a law practice does not disclose to a client or an associated third
party payer anything required by this Division to be disclosed, the client or
associated third party payer (as the case may be) need not pay the legal costs
unless they have been reviewed under Division 7.

Note Under section 3.4.45, the costs of a review in these circumstances are
generally payable by the law practice.

(2) A law practice that does not disclose to a client or an associated third
party payer anything required by this Division to be disclosed may not
maintain proceedings against the client or associated third party payer (as
the case may be) for the recovery of legal costs unless the costs have been
reviewed under Division 7.

(3) If a law practice does not disclose to a client or an associated third
party payer anything required by this Division to be disclosed and the client
or associated third party payer has entered into a costs agreement with the
law practice, the client or associated third party payer may also apply under
section 3.4.32 for the costs agreement to be set aside.

(4) If a law practice does not disclose to a client or an associated third
party payer anything required by this Division to be disclosed, then, on a
review of the relevant legal costs, the amount of the costs may be reduced by
an amount considered by the Taxing Master to be proportionate to the
seriousness of the failure to disclose.

(5) If a law practice retains another law practice on behalf of a client and
the first law practice fails to disclose something to the client solely
because the retained law practice failed to disclose relevant information to
the first law practice as required by section 3.4.10(2), then subsections (1)
to (4)-

   (a)  do not apply to the legal costs owing to the first law practice on
        account of legal services provided by it, to the extent that the
        non-disclosure by the first law practice was caused by the failure of
        the retained law practice to disclose the relevant information; and

   (b)  do apply to the legal costs owing to the retained law practice.





(5A) In a matter involving both a client and an associated third party payer
where disclosure has been made to one of them but not the other-

   (a)  subsection (1) does not affect the liability of the one to whom
        disclosure was made to pay the legal costs; and

   (b)  subsection (2) does not prevent proceedings being maintained against
        the one to whom the disclosure was made for the recovery of those
        legal costs.

(6) Failure by a law practice to comply with this Division is capable of
constituting unsatisfactory professional conduct or professional misconduct on
the part of any Australian legal practitioner or Australian-registered foreign
lawyer involved in the failure.

(7) Subsections (1) and (2) do not apply if the legal costs are or have been
the subject of a civil complaint under Chapter 4.