(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 assessed under Division 8.
(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 assessed under
Division 8.
(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 a costs agreement with the law practice, the client or
associated third party payer may also apply under section 288 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 an assessment of the
relevant legal costs, the amount of the costs may be reduced by an amount
considered by the taxing officer 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 a client solely because the retained practice
failed to disclose the relevant information as required by
section 261(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.
(6) 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 from being maintained against
the one to whom the disclosure was made for the recovery of those legal costs.
(7) 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.