Tom Zreika
A recent Full Court decision provides an important warning for Australian law practices about the timing of costs disclosure.
In AF Lawyers & Pirani [2026] FedCFamC1A 155, the Full Court of the Federal Circuit and Family Court of Australia considered a law firm’s attempt to recover $839,111.15 in unpaid legal fees from a former client and enforce security over property.
The problem was timing.
.Section 174(1) of the Legal Profession Uniform Law requires a law practice to make prescribed costs disclosures when, or as soon as practicable after, instructions are initially given.
AF Lawyers provided its costs disclosure and costs agreement 16 days after receiving instructions. The Full Court held the disclosure was not made “as soon as practicable”. Although the client’s matter involved urgency, the circumstances did not excuse the delay.
The consequences were substantial.
Under s 178(1)(a) of the Uniform Law, the costs agreement was void. AF Lawyers was therefore unable to rely upon the charging clause contained within the agreement as security for its unpaid fees.
The firm also relied upon an equitable “fruits of litigation” lien.
This argument also failed. The underlying family law property proceedings resulted in property being retained by the client rather than recovered through a judgment, award, compromise or identifiable fund. The Full Court found no relevant fruit of the litigation upon which the asserted lien attached.
The appeal was dismissed, with AF Lawyers ordered to pay the second respondent’s costs.
Key takeaway
Costs disclosure is not a procedural formality.
Law practices operating under the Uniform Law should provide compliant costs disclosure and costs agreements at the outset of a retainer, or as soon as practicable after receiving initial instructions.
AF Lawyers & Pirani demonstrates the consequences of delay. Here, a 16-day delay affected a claim involving more than $839,000 in legal fees and left the firm unable to rely upon its costs agreement and associated charging clause.
For practitioners, the message is straightforward: address costs disclosure before substantive work begins wherever practicable.