Federal Court judge throws down the gauntlet … Solicitors told to keep off the bar’s patch … Too many solicitors spoiling the broth … Barristers are more efficient and cheaper! … The client’s “best interests” 

In a security for costs case, Rares discovered that Piper Alderman, acting for a bankruptcy trustee who is defending a claim against the estate, has put more than a reasonable number of their lawyers on the matter. 

Rares thinks they are invading the barristers’ turf and should be stopped. 

Thomas Russell, an insolvency partner at the firm, said in an affidavit that the total amount of security required was $143,691, exclusive of GST, and that this was 60 percent of his estimate of total costs and disbursements that the trustee was likely to incur in defending the case, namely $239,485, excluding GST. 

Rares effectively halved the security and ordered an amount of $77,000 to be paid in stages by the applicant, Armstrong Scalisi Holdings, which has one director, a paid up capital of $100, and is described as providing professional services on a “piecemeal basis” and involved in “various pieces of litigation and the recovery of moneys due to it”. The judge said: 

“The amount sought and the total estimate appeared to me to be very large and to involve the participation of a large number of solicitors in performing work at rates far greater than counsel’s rates for tasks that appeared, primarily, to be the responsibility of counsel …

Mr Russell had based his estimates on differing hourly rates for work performed by a partner ($605 per hour), a senior associate ($490 per hour), an associate ($420 per hour) and a lawyer ($310 per hour).”

It was estimated that there would be solicitor-client fees of $21,920 for “considering the statement of claim and drafting and settling the defence and any cross-claim”. 

For this work the partner, senior associate, associate and lawyer would be billing an estimated $15,520 and counsel $6,400. 

Those higher up the law firm’s greasy pole billed more money but for fewer hours, while those lower down were expected to bill more time at lower hourly rates, so that in fact the most junior person would end up billing more than the partner, senior associate or associate. 

Similarly, $69,960 was estimated for preparation and conduct of an estimated two day final hearing where the four solicitors were expected to bill $50,960, the poor barrister a comparatively miserable $16,000, plus $3,000 for disbursements. 

Preparation by the solicitors was almost $17,000, while the cost of counsel’s preparation was given as $6,400. 

The attendance of all four solicitors at the hearing would be charged at almost $21,000 while the barrister was expected to trouser only $6,400 for the two days. 

The trustee’s counsel, Andrew Smith, proposed a modification that has resulted in a reduction in the amount sought as security for costs. 

“That estimate accepted that most of the work would (as, in my opinion, it should be) performed by one lawyer and counsel.”