Victorian Numbered Acts Victorian Numbered Acts(1) Insert the following definition in section 3.4.2 of the Legal Profession Act 2004 —
' "sophisticated client" means a client to whom, because of section 3.4.12(1)(c) or (d), disclosure under section 3.4.9 or 3.4.10(1) is not or was not required;'.
(2) For section 3.4.12(1)(c) of the Legal Profession Act 2004 substitute —
"(c) if the client is—
(i) a law practice or an Australian legal practitioner; or
(ii) a public company, a subsidiary of a public company, a large proprietary company, a foreign company, a subsidiary of a foreign company or a registered Australian body (each within the meaning of the Corporations Act); or
(iii) a financial services licensee (within the meaning of that Act); or
(iv) a liquidator, administrator or receiver (as respectively referred to in that Act); or
(v) a partnership that carries on the business of providing professional services if the partnership consists of more than 20 members or if the partnership would be a large proprietary company (within the meaning of that Act) if it were a company; or
(vi) a proprietary company (within the meaning of that Act) formed for the purpose of carrying out a joint venture, if any shareholder of the company is a person to whom disclosure of costs is not required; or
(vii) an unincorporated group of participants in a joint venture, if any member of the group is a person to whom disclosure of costs is not required and if any other members of the group who are not such persons have indicated that they waive their right to disclosure; or
(viii) a Minister of the Crown in right of a jurisdiction or the Commonwealth acting in his or her capacity as such, or a government department or public authority of a jurisdiction or the Commonwealth;".
(3) At the end of section 3.4.14 of the Legal Profession Act 2004 insert —
"(2) A law practice is not required to make a disclosure under sub-section (1) to a sophisticated client.".
(4) For section 3.4.17(2), (3) and (4) of the Legal Profession Act 2004 substitute —
"(2) A law practice that does not disclose to a client anything required by this Division to be disclosed may not maintain proceedings against the client 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 anything required by this Division to be disclosed and the client has entered into a costs agreement with the law practice, the client 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 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 sub-sections (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.
(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) Sub-sections (1) and (2) do not apply if the legal costs are or have been the subject of a civil complaint under Chapter 4.".
(5) After section 3.4.27(4) of the Legal Profession Act 2004 insert —
"(4A) Sub-section (3)(c)(iii), (d) and (e) does not apply to a conditional costs agreement made with a sophisticated client.".