1
LAND ACCESS FORUM
Reasonable Legal Costs
28 August 2014
Presenter:
James Minchinton
Partner
11473765/1
2
OVERVIEW – REASONABLE LEGAL
COSTS AND RESOURCE COMPANIES
• Perspectives on reasonable legal costs
• Obligations on tenem...
33
PERSPECTIVES ON
REASONABLE LEGAL COSTS
LAND ACCESS FORUM: WHAT ARE REASONABLE LEGAL COSTS 28 August 2014
5
THE LAWYER’S PERSPECTIVE
All legal costs are reasonable
And mine are more
reasonable than others!
LAND ACCESS FORUM: WHA...
6
THE CLIENT’S PERSPECTIVE
No legal costs are reasonable
And if I’m paying someone
else’s they are even less
reasonable th...
7
TENSIONS AROUND PAYMENT OF
REASONABLE LEGAL COSTS
• Landholders:
– Feel they only need to incur legal fees because of a
...
88
OBLIGATIONS TO PAY
REASONABLE LEGAL COSTS
LAND ACCESS FORUM: WHAT ARE REASONABLE LEGAL COSTS 28 August 2014
9
OBLIGATION TO PAY
REASONABLE LEGAL COSTS
• For all resource authorities in Queensland (other
than mining leases) a resou...
10
REASONABLE LEGAL COSTS
• Legal costs
• Necessarily or reasonably
• Incurred
• By the claimant
• To negotiate or prepare...
1111
RELEVANT FACTORS FOR
ASSESSING REASONABLE
LEGAL COSTS
LAND ACCESS FORUM: WHAT ARE REASONABLE LEGAL COSTS 28 August 20...
12
REASONABLE LEGAL COSTS
• No judicial decisions about “reasonable legal
costs” in a resources context
• Some guidance fr...
13
INITIAL OBSERVATIONS
• Not an open cheque book
• Not necessarily all legal costs incurred
• General expectation that th...
14
ACQUISITION OF LAND CASES
• Lowry v Coordinator General [2012] QLC 0026
• The reasonableness must relate to both:
– The...
15
PROCEEDS OF CRIME CASES
• New South Wales Crime Commission v Fleming;
New South Wales Crime Commission v Heal
(NSW Cour...
16
ELEMENTS OF REASONABLENESS
• Rates must be reasonable
– Hourly rates
– Expenses and disbursements
– Other components e....
1717
OPTIONS FOR DEALING
WITH REASONABLE LEGAL
COSTS
LAND ACCESS FORUM: WHAT ARE REASONABLE LEGAL COSTS 28 August 2014
18
SEARCH FOR CERTAINTY
• Judicial decision
• Most likely a petroleum lease case
• But potentially a smaller claim where o...
19
IS THERE A BETTER WAY?
• No payment of legal fees (reasonable or
otherwise)?
• Setting hourly rates?
• Capping reasonab...
20
CONCERNS OF RESOURCES
COMPANIES
• No visibility on costs
• Only see bill at the end and are expected to simply
pay it
•...
21
PROFESSIONAL OBLIGATIONS
AROUND LEGAL COSTS
• Legal Profession Act 2007 (Qld) provides for third
party payers of fees
•...
22
RIGHTS OF NON-ASSOCIATED
THIRD PARTY PAYERS
• No rights to costs disclosure
• No costs agreement and no right to see th...
23
PROTOCOLS FOR COST
DISCLOSURE
• Protocols for landholders disclosing certain
information at the beginning of negotiatio...
24
SUMMARY
• There is no simple formula and there is no single number
• What is reasonable will depend on all the facts an...
25
LAND ACCESS FORUM
Reasonable Legal Costs
28 August 2014
Presenter:
James Minchinton
Partner
11473765/1
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James Minchinton - Corrs Chambers Westgrath - What are Reasonable Legal Costs?

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James Minchinton delivered the presentation at the 2014 Land Access Forum.

The 5th annual Land Access Forum brought together Government departments, coal, CSG, UCG mining and exploration companies, mining and petroleum industry associations, landholders, law firms and consultants to discuss the new and emerging regulatory reforms, practicalities, challenges, and future directions of land access.

For more information about the event, please visit: http://bit.ly/landaccess14

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James Minchinton - Corrs Chambers Westgrath - What are Reasonable Legal Costs?

  1. 1. 1 LAND ACCESS FORUM Reasonable Legal Costs 28 August 2014 Presenter: James Minchinton Partner 11473765/1
  2. 2. 2 OVERVIEW – REASONABLE LEGAL COSTS AND RESOURCE COMPANIES • Perspectives on reasonable legal costs • Obligations on tenement holders to pay the reasonable legal costs of landowners • Relevant factors when assessing reasonable legal costs • Options for dealing with and managing the reasonable legal costs of landowners 28 August 2014LAND ACCESS FORUM: WHAT ARE REASONABLE LEGAL COSTS
  3. 3. 33 PERSPECTIVES ON REASONABLE LEGAL COSTS LAND ACCESS FORUM: WHAT ARE REASONABLE LEGAL COSTS 28 August 2014
  4. 4. 5 THE LAWYER’S PERSPECTIVE All legal costs are reasonable And mine are more reasonable than others! LAND ACCESS FORUM: WHAT ARE REASONABLE LEGAL COSTS 28 August 2014
  5. 5. 6 THE CLIENT’S PERSPECTIVE No legal costs are reasonable And if I’m paying someone else’s they are even less reasonable than others! LAND ACCESS FORUM: WHAT ARE REASONABLE LEGAL COSTS 28 August 2014
  6. 6. 7 TENSIONS AROUND PAYMENT OF REASONABLE LEGAL COSTS • Landholders: – Feel they only need to incur legal fees because of a resources company – Feel they should not be out of pocket • Tenement Holders: – Feel they have a right to be on the land too – Are concerned that the landholder’s legal costs may be inflated because someone else is paying – Feel that there is no incentive on a landholder to settle or to act commercially and can fight to the death because someone else is paying – Concerned that landholders are happy to cause additional cost to the tenement holder LAND ACCESS FORUM: WHAT ARE REASONABLE LEGAL COSTS 28 August 2014
  7. 7. 88 OBLIGATIONS TO PAY REASONABLE LEGAL COSTS LAND ACCESS FORUM: WHAT ARE REASONABLE LEGAL COSTS 28 August 2014
  8. 8. 9 OBLIGATION TO PAY REASONABLE LEGAL COSTS • For all resource authorities in Queensland (other than mining leases) a resource authority holder has an obligation to pay the “compensation liability” to each eligible claimant for the compensable effect the eligible claimant suffers because of the activities. • The compensable effect includes: “accounting, legal or valuation costs the claimant necessarily and reasonably incurs to negotiate or prepare a conduct and compensation agreement (other than the costs of a person facilitating an ADR)” LAND ACCESS FORUM: WHAT ARE REASONABLE LEGAL COSTS 28 August 2014
  9. 9. 10 REASONABLE LEGAL COSTS • Legal costs • Necessarily or reasonably • Incurred • By the claimant • To negotiate or prepare a conduct and compensation agreement LAND ACCESS FORUM: WHAT ARE REASONABLE LEGAL COSTS 28 August 2014
  10. 10. 1111 RELEVANT FACTORS FOR ASSESSING REASONABLE LEGAL COSTS LAND ACCESS FORUM: WHAT ARE REASONABLE LEGAL COSTS 28 August 2014
  11. 11. 12 REASONABLE LEGAL COSTS • No judicial decisions about “reasonable legal costs” in a resources context • Some guidance from: – Acquisition of Land Act cases – Proceeds of crime cases LAND ACCESS FORUM: WHAT ARE REASONABLE LEGAL COSTS 28 August 2014
  12. 12. 13 INITIAL OBSERVATIONS • Not an open cheque book • Not necessarily all legal costs incurred • General expectation that the quantum of the legal costs will be proportional to the quantum of the compensation • But there may be circumstances in which this isn’t the case LAND ACCESS FORUM: WHAT ARE REASONABLE LEGAL COSTS 28 August 2014
  13. 13. 14 ACQUISITION OF LAND CASES • Lowry v Coordinator General [2012] QLC 0026 • The reasonableness must relate to both: – The issue of whether it was reasonable to incur the cost; and – Whether the quantum of the cost was reasonable • Not enough for a claimant to assert that they relied on the expertise of the lawyers (that their fees were reasonable) and paid the bill accordingly. That approach does not contain any analysis as to whether it is reasonable LAND ACCESS FORUM: WHAT ARE REASONABLE LEGAL COSTS 28 August 2014
  14. 14. 15 PROCEEDS OF CRIME CASES • New South Wales Crime Commission v Fleming; New South Wales Crime Commission v Heal (NSW Court of Appeal, 40300 of 1990 and 40301 of 1991) • What is reasonable is determined by a judge, not the person affected or their lawyers • If the parties agree on costs, a judge would normally be entitled to accept that agreement • Where no agreement exists, the parties will need to call evidence of reasonableness • Court scales and average fee amounts are not sufficient evidence to confirm reasonableness • Will be assessed on a case by case basis • Public interest is also relevant LAND ACCESS FORUM: WHAT ARE REASONABLE LEGAL COSTS 28 August 2014
  15. 15. 16 ELEMENTS OF REASONABLENESS • Rates must be reasonable – Hourly rates – Expenses and disbursements – Other components e.g. care and consideration • Time taken for tasks must be reasonable • Nature of the work and relevance to the matter • The merits of the case or argument LAND ACCESS FORUM: WHAT ARE REASONABLE LEGAL COSTS 28 August 2014
  16. 16. 1717 OPTIONS FOR DEALING WITH REASONABLE LEGAL COSTS LAND ACCESS FORUM: WHAT ARE REASONABLE LEGAL COSTS 28 August 2014
  17. 17. 18 SEARCH FOR CERTAINTY • Judicial decision • Most likely a petroleum lease case • But potentially a smaller claim where one (or both) parties are legally represented • Until then.... LAND ACCESS FORUM: WHAT ARE REASONABLE LEGAL COSTS 28 August 2014
  18. 18. 19 IS THERE A BETTER WAY? • No payment of legal fees (reasonable or otherwise)? • Setting hourly rates? • Capping reasonable legal fees? • 10% added to the amount of compensation otherwise determined? • Something else? LAND ACCESS FORUM: WHAT ARE REASONABLE LEGAL COSTS 28 August 2014
  19. 19. 20 CONCERNS OF RESOURCES COMPANIES • No visibility on costs • Only see bill at the end and are expected to simply pay it • Timing of payments: – ongoing regular payments during negotiations; or – lump sum payment at the end LAND ACCESS FORUM: WHAT ARE REASONABLE LEGAL COSTS 28 August 2014
  20. 20. 21 PROFESSIONAL OBLIGATIONS AROUND LEGAL COSTS • Legal Profession Act 2007 (Qld) provides for third party payers of fees • Two categories: – Associated third party payer – Non-associated third party payer • Resources companies would be non-associated third party payers LAND ACCESS FORUM: WHAT ARE REASONABLE LEGAL COSTS 28 August 2014
  21. 21. 22 RIGHTS OF NON-ASSOCIATED THIRD PARTY PAYERS • No rights to costs disclosure • No costs agreement and no right to see the costs agreement • May request (and receive) a copy of the itemised bill • May apply for costs assessment LAND ACCESS FORUM: WHAT ARE REASONABLE LEGAL COSTS 28 August 2014
  22. 22. 23 PROTOCOLS FOR COST DISCLOSURE • Protocols for landholders disclosing certain information at the beginning of negotiations: – Rates – Other costs – Estimates – Scope of work – Engagement letter – Costs disclosure – Confirmation that the rates and other costs are in the same or comparable to those usually billed by the solicitor LAND ACCESS FORUM: WHAT ARE REASONABLE LEGAL COSTS 28 August 2014
  23. 23. 24 SUMMARY • There is no simple formula and there is no single number • What is reasonable will depend on all the facts and circumstances • The need for the costs must be reasonable • The quantum of the costs must be reasonable • The work undertaken must relate to the negotiation of the conduct and compensation agreement • The arguments pursued and the negotiating position adopted must have been reasonable • Certainty around reasonable legal costs would be advantageous to both landholders and tenement holders • Protocols to disclose costs (or the basis for costs) to resources companies may be useful LAND ACCESS FORUM: WHAT ARE REASONABLE LEGAL COSTS 28 August 2014
  24. 24. 25 LAND ACCESS FORUM Reasonable Legal Costs 28 August 2014 Presenter: James Minchinton Partner 11473765/1
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