3. What is a contribution to legal costs?

A contribution to legal costs is a determination made under s 46 of the Legal Aid Commission Act 1979 (NSW) (the Act) and is a contribution imposed on a legally aided person at the end of a grant of legal aid.

Legal Aid NSW must make a determination under s 46 of the Act in every matter where a grant of legal aid is made. In deciding whether the legally aided person will be required to pay a final contribution amount and the amount of that contribution, Legal Aid NSW will take into account whether:

  • the legally aided person owns real property, unless it is a matter where the charge policy does not apply;
  • the legally aided person's financial circumstances have changed;
  • the legally aided person has or may recover money;
  • the legally aided person has or may recover or retain and interest in real property; and/or
  • costs have been awarded in favour of the legally aided person.

See Contribution policy 3.3 for calculating the contribution where a person owns real property.

See Contribution policy 3.4 for calculating the contribution where a person’s financial circumstances have changed.

See Contribution policy 3.5 and 3.6 for calculating the contribution where a person recovers or retains an interest in property or money.

See Contribution policy 3.8 for calculating the contribution where costs have been awarded in favour of the legally aided person.

3.1 - When is the contribution to legal costs to be determined?

A contribution to legal costs is a determination made under s 46 of the Legal Aid Commission Act 1979 (NSW) (the Act) and is a contribution imposed on a legally aided person at the end of a grant of legal aid.

Legal Aid NSW must make a determination under s 46 of the Act in every matter where a grant of legal aid is made. In deciding whether the legally aided person will be required to pay a final contribution amount and the amount of that contribution, Legal Aid NSW will take into account whether:

  • the legally aided person owns real property, unless it is a matter where the charge policy does not apply; 
  • the legally aided person's financial circumstances have changed;
  • the legally aided person has or may recover money;
  • the legally aided person has or may recover or retain and interest in real property; and/or
  • costs have been awarded in favour of the legally aided person.

3.2 - When should a legally aided person be notified that a contribution to legal costs determination will be made?

The legally aided person and their lawyer must be advised in writing at the time aid is granted that a determination under s 46 of the Act will be made at the end of the grant of aid and that the client may be required to make a contribution under s 46 of the Act.

3.3 - Where the legally aided person owns real property

Where the legally aided person owns real property, Legal Aid NSW will determine that the contribution to legal costs will be equal to the total costs and expense of providing the legal service, unless:

Note: The total costs and expenses will include costs incurred under s 33 of the Act.

See Contributions guideline 5.1

3.4 - Where the legally aided person's financial circumstances have changed

Where Legal Aid NSW is satisfied the legally aided person's financial circumstances have changed, when calculating the amount of the final contribution, Legal Aid NSW will:

  • request an updated Financial Statement;
  • assess the amount of final contribution to be paid using the s 46 Contribution Scale.

Note: This policy does not apply to matters under Part II of the Veterans' Entitlements Act 1988 (Cth) or under the Military Rehabilitation and Compensation Act 2004 (Cth) where the means test is not applied.

Note: The total costs and expenses will include costs incurred under s 33 of the Act.

See also Contributions guideline 5.2

Note: There is discretion to reduce the contribution to legal cost where Legal Aid NSW is satisfied there are exceptional circumstances. Only Directors have the delegation to reduce the final contribution.

3.5 - Where the legally aided person recovers money

Where a legally aided person recovers money, the contribution to legal costs payable will be equal to total costs and expense of providing the legal service, subject to the following exceptions:

Family Law property settlement proceedings

Where legal aid is granted for Family Law property settlement proceedings, the total costs and expense of providing the legal service will be imposed on any settlement monies received that is more than $30,000.

Centrelink and Child Support back payments

Legal Aid NSW will not take into account any money received by way of back payment in social security matters or lump sum amounts received in child support matters when calculating the contribution to legal costs.

All other legally aided matters

  • Where a person recovers $5,000 or less: Legal Aid NSW will not take into account any money recovered up to $5,000 when calculating the contribution to legal costs.
  • Where a person recovers more than $5,000: The total costs of providing the legal service will be imposed on any amount recovered over $5,000.

3.6 - Where the legally aided person retains or recovers an interest in real property

Where Legal Aid NSW is satisfied that the legally aided person has recovered or retained an interest in real property, the contribution to legal costs payable will be equal to the total costs and expense of providing the legal service.

The calculated amount can be secured by a charge and registered caveat against the real property.

Any initial contribution that has been paid by the legally aided person will be deducted from the final amount calculated under s46 of the Act.

Note: The total costs and expenses will include costs incurred under s 33 of the Act.

3.7 - Where legal aid is terminated

When calculating the contribution to legal costs where:

  • legal aid is terminated prior to the conclusion of proceedings, and
  • there is a possibility that the legally aided person may recover or retain an interest in property or money

Legal Aid NSW will determine that the contribution to legal costs will be equal to the total costs and expense of providing the legal service.

In all other circumstances, Legal Aid NSW will impose the contribution in accordance with Contributions policy 3.4 to 3.6.

Note: The total costs and expenses will include costs incurred under s 33 of the Act.

See Contributions guideline 5.6 on collecting contributions when legal aid is terminated.

3.8 - Where costs are awarded to the legally aided person

Where costs are awarded by a court or tribunal in favour of the legally aided person all of these costs must be paid directly to Legal Aid NSW. The lawyer representing the legally aided person is responsible for recovering costs awarded to the legally aided person.

Calculating the contribution to legal costs

Where the legally aided person is awarded costs by a court or tribunal, or if the terms of settlement include costs payable to the legally aided person, when calculating the final contribution amount, Legal Aid NSW will take into account:

  • the amount of costs awarded to the legally aided person and recovered by Legal Aid NSW, and

whether:

  • the total costs and expense of providing the legal service are secured by way of charge/ caveat over real property, or
  • Legal Aid NSW is satisfied the legally aided person’s financial circumstances have and changed, or
  • the legally aided person has recovered money, or
  • the legally aided person has retained or recovered an interest in real property.

See Contributions guideline 5.1 where the legally aided person owns real property and the final contribution amount has been secured by way of an equitable charge over the property.

See Contributions guideline 5.2 where a legally aided person’s financial circumstances have changed.

See Contributions guideline 5.3 where a legally aided person has recovered money.

See Contributions guideline 5.4  where a legally aided person has recovered or retained an interest in property.

Note: In circumstances where the legally aided person fails to instruct their lawyer to recover the costs, Legal Aid NSW can obtain an assignment of the right of the legally aided person to recover such monies under s 45 of the Act.

See Contributions guideline 9 Assigning the right to recover costs for guidance on how and when an assignment of the right of the legally aided person to recover such monies should be sought.

3.9 - Notifying the legally aided person that a contribution to legal costs has been imposed

Legal Aid NSW must notify the legally aided person within a reasonable timeframe that a contribution under s 46 of the Act has been imposed, and:

  • set out clearly the total amount  of contribution that must be paid, and
  • provide a due date for payment.

Note: The timeframe for payment is forty-two (42) days unless specific arrangements for payment have been entered into between the legally aided person and Legal Aid NSW.

3.10 - Right to have costs of private lawyer assessed

Legal Aid NSW must notify the legally aided person within a reasonable timeframe that a contribution under s 46 of the Act has been imposed, and:

  • set out clearly the total amount  of contribution that must be paid, and
  • provide a due date for payment.

Note: The timeframe for payment is forty-two (42) days unless specific arrangements for payment have been entered into between the legally aided person and Legal Aid NSW.

3.11 - Can a contribution to legal costs be varied?

A contribution to legal costs amount can be varied by a later determination to increase or decrease the calculated amount where Legal Aid NSW is satisfied that the original amount was not imposed in accordance with the Contribution Policy.

The only circumstance in which a contribution amount that has been paid by a legally aided person can be refunded is where the original amount paid was incorrect.

Reducing the calculated contribution amount after it has been imposed

Note: There is discretion to reduce the contribution to legal costs where Legal Aid NSW is satisfied there are exceptional circumstances. Only Directors have the delegation to reduce the contribution to legal costs.

Note: A contribution to legal costs can only be varied (either by reducing or increasing the amount) up to six months after it has been imposed.

3.12 - Can a contribution amount be refunded once it has been paid?

The only circumstance in which a contribution amount that has been paid by a legally aided person can be refunded is where the original amount paid was incorrect.

Section 64 of the Act sets out the circumstances in which money can be paid out of the Legal Aid Fund. These provisions do not cover payments to a legally aided person unless it is money owed under s 44 of the Act.  As such the power to make payments from the Legal Aid Fund is limited by s 64 of the Act.

See Contributions guideline 10: Refunding a contribution to legal costs.

3.13 - Can a legally aided person appeal to the Legal Aid Review Committee against the amount of a contribution to legal costs?

There is no right of appeal to the Legal Aid Review Committee against the decision to impose a contribution to legal costs or the amount of the contribution.

Date last published: 1 August 2024