Applying s 32 to private billing arrangements in Family Law matters

Private practitioners have obligations under the Legal Aid Act 1978 (Vic) when entering into private billing arrangements with clients who are in receipt of a grant of legal assistance. This page considers private billing arrangements in family law parenting and property disputes and funding provided under the Commonwealth Family Violence and Cross-Examination of Parties Scheme (s 102NA scheme).

Section 32 of the Act

Section 32 of the Act states:

• If a private legal practitioner performs or has performed legal services on behalf of an assisted person, he or she must not demand, take or accept any payment for performing those services other than the payment to which the private law practice of which he or she is a principal or employee is entitled under this Act.

The objective of s 32 is to prevent legal practices or practitioners from receiving ‘top-up’ payments, or being paid twice, for services funded by Victoria Legal Aid (VLA). It prohibits the allocated practitioner receiving any additional fees for providing the services set out in the scope of assistance.

Applying s 32 to related proceedings or services not funded under a grant of assistance

Legally aided parenting matter and property matter privately funded

If a client who has a grant of assistance in relation to their parenting dispute enters into a private costs agreement in relation to their property dispute, they should not be charged privately for any services covered under the grant of assistance. Private fees can only be charged where the work relates solely to the property matter and in circumstances where the client is not eligible for funding under VLA’s property guideline. For example, work done consolidating information regarding a client’s financial situation and drafting a financial disclosure is not covered by a parenting grant and may be charged privately.

For any work (including appearances, attendances or conferences) undertaken on behalf of a client that relates to both parenting and property matters, the private practitioner can only claim the applicable fee from the parenting matter grant. Pursuant to s 32, private practitioners are prohibited from seeking a ‘top up payment’ for this work. For example, if a hearing is covered by an appearance fee in the parenting dispute, that is the only fee claimable by the private practitioner regardless of whether the property dispute was also discussed at the hearing.

Where a panel practitioner is entitled to a daily appearance fee under a grant of assistance no further fees may be claimed.

Section 102NA scheme

A private practitioner who is allocated a matter under the s 102NA scheme, including counsel who accepts the legally aided brief, cannot demand, take or accept any payments for those services which are funded under the scheme. Where a s 102NA grant provides a daily appearance fee for trial, no further fees may be privately charged for those appearances.

The services funded by VLA under the s 102NA scheme are:

• trial preparation
• appearance fees for all trial days
• one FDRS conference
• interim contest preparation and appearance where personal cross-examination may occur.

However, s 102NA scheme funding is limited and some aspects of representation in the usual lawyer-client relationship are not covered. The cost of services which do not fall within the s 102NA scheme may be charged privately. These include:

• disbursements such as for family reports, expert witnesses and transcripts
• stage 2F subsequent hearing fees
• compliance and readiness hearing fee

A practitioner must not charge their client private fees for services that are performed within the scope of funding that has been provided (e.g. preparation for the final hearing).

Obligations of panel practitioners and breach of s 32

If a panel practitioner charges a ‘top-up’ fee in a legally aided matter or apportions fees in a client’s family law matter where there is a legally aided dispute running alongside a privately funded dispute they may be in breach of s 32.

Where VLA is aware of a panel practitioner representing a client on both a legally aided basis and a private basis, VLA may seek further information or access to the private file as part of its quality audit and compliance functions. If a suspected breach of s 32 has occurred, VLA may take further action, including referring the matter to the relevant regulatory or law enforcement body.

In addition to their obligations under s 32, VLA’s Practice Standards (PS) apply to all panel practitioners when they are performing any legal aid service. These standards inform how VLA monitors the effective, economic and efficient delivery of high-quality legal aid services.

A practitioner is under a duty to inform a client of any rights they may have to apply for legal assistance (unless there is no real possibility that the client is eligible to receive legal assistance) and to proactively assist and support an applicant to apply for legal assistance (PS 3.2d & e).

Therefore, when applying for a grant under VLA’s parenting dispute guideline, a private practitioner should also properly assess their client’s eligibility for property dispute funding under Guideline 9 – property disputes. If their client is not eligible for property dispute funding, the private practitioner may enter into a private costs agreement with their client in relation to the property dispute.

If the client is not eligible for assistance under the property guideline and the practitioner enters into a private funding agreement with the client, the practitioner is required to notify VLA (PS 3.2g). This requirement is supported by s 31 of the Act which requires a practitioner to disclose to VLA any information that is within their knowledge which is relevant to the provision of services by way of legal assistance to the assisted person. A client’s capacity to privately fund their property matter would be relevant to the grant of assistance in relation to the parenting matter.

Eligibility for legal assistance is governed by s 24 of the Act and the VLA Handbook for Lawyers. A key test under s 24 is that the person seeking assistance cannot afford to pay for the legal representation privately. Information about current ability to pay private legal fees is therefore a relevant matter in assessing an application for assistance and/or ongoing eligibility.

There is an obligation imposed on practitioners to notify VLA of any private fee arrangement entered into with an assisted person because panel practitioners have an ongoing obligation to assist VLA in ensuring that legal assistance is only provided to eligible people. Failure to do so could be a breach of the Practice Standards and s 44 of the Act (i.e. failure to disclose information which that person knows to be relevant to the application or to the provision of legal assistance).

Any private work engaged in by a panel practitioner is also subject to the rules and obligations under the Legal Profession Uniform Law, including the prohibition on no win no fee retainers in family law matters.

Where parenting disputes are legally assisted, and property matters are privately funded, cost disclosure should be clear so the client can make an informed decision about the likely costs of the matter. As set out above, disclosure of the arrangement must also be made to VLA. In the event the private fee arrangement is agreed to by a client and does not result in a termination of assistance by VLA, a practitioner must keep detailed records of the work done on each separate file and produce those records to VLA upon request to evidence compliance with the Practice Standards and the Act.

More information

• Legal Aid Act 1978 (Vic)
• VLA’s Practice Standards
• Measures for VLA’s Practice Standards
• Family Violence and Cross-Examination Scheme information for Panel Practitioners

Please contact the Practitioner Support Officer team, at GrantsTraining@vla.vic.gov.au or call (03) 9269 0600, with any queries relating to the private billing of clients in receipt of a grant of legal assistance.