What a costs agreement has to contain under the Uniform Law

For an ordinary costs agreement, the Uniform Law says little about content. It must be in writing, it cannot shut out a costs assessment, and it cannot calculate your fee from what the client recovers. Most of what the Uniform Law says about content applies only to conditional costs agreements.

The bigger risk is outside the agreement. A costs agreement made without proper disclosure is void, however well it is drafted.

What every costs agreement must do

Be in writing

A costs agreement must be written or evidenced in writing.

Section 180(3) sets out how it can be formed:

A costs agreement may consist of a written offer that is accepted in writing or (except in the case of a conditional costs agreement) by other conduct.

Leave costs assessment open

A costs agreement cannot provide that the legal costs to which it relates are not subject to a costs assessment.

Not tie the fee to the result

A law practice must not enter into a costs agreement under which the amount payable to the law practice, or any part of that amount, is calculated by reference to the amount of any award or settlement or the value of any property that may be recovered in any proceedings to which the agreement relates.

Section 183(2) says that subsection "does not apply to the extent that the costs agreement adopts an applicable fixed costs legislative provision."

What a conditional costs agreement must also contain

Under section 181(1), a conditional costs agreement is one that "may provide that the payment of some or all of the legal costs is conditional on the successful outcome of the matter to which those costs relate." Sections 181(2) to 181(4) then add requirements an ordinary agreement does not have.

• Section 181(2)(a): it must "be in writing and in plain language".
• Section 181(2)(b): it must "set out the circumstances that constitute the successful outcome of the matter to which it relates".
• Section 181(3)(a): it must "be signed by the client".
• Section 181(3)(b): it must "include a statement that the client has been informed of the client's rights to seek independent legal advice before entering into the agreement".

A conditional costs agreement must contain a cooling-off period of not less than 5 clear business days during which the client, by written notice, may terminate the agreement, but this requirement does not apply where the agreement is made between law practices only.

Read together, these mean an agreement accepted by conduct cannot be a conditional costs agreement, because section 180(3) excludes conditional agreements from acceptance by conduct and section 181(3)(a) requires the client's signature.

Where a conditional agreement is not available

Section 181(7) excludes any matter that involves "criminal proceedings", "proceedings under the Family Law Act 1975 of the Commonwealth", or "proceedings under legislation specified in the Uniform Rules for the purposes of this section".

If it includes an uplift fee

For a litigious matter, section 182(2) says the agreement "must not provide for the payment of an uplift fee unless the law practice has a reasonable belief that a successful outcome of the matter is reasonably likely", and that "the uplift fee must not exceed 25% of the legal costs (excluding disbursements) otherwise payable".

For any conditional agreement with an uplift fee, section 182(3) says it "must identify the basis on which the uplift fee is to be calculated" and "must include an estimate of the uplift fee". Where an estimate is not reasonably practical, it must give "a range of estimates for the uplift fee" and "an explanation of the major variables that may affect the calculation of the uplift fee".

When a costs agreement is void

A costs agreement that contravenes, or is entered into in contravention of, any provision of this Division is void.

Disclosure is the other route. If a law practice contravenes the disclosure obligations, section 178(1)(a) says "the costs agreement concerned (if any) is void", and section 178(1)(b) says the client "is not required to pay the legal costs until they have been assessed or any costs dispute has been determined by the designated local regulatory authority".

A law practice is not entitled to recover any amount in excess of the amount that the law practice would have been entitled to recover if the costs agreement had not been void and must repay any excess amount received.

An agreement breaching the uplift fee rules costs more than the excess. Under section 185(3), the practice "is not entitled to recover the whole or any part of the uplift fee". Under section 185(4), an agreement breaching section 183 means the practice "is not entitled to recover any amount in respect of the provision of legal services in the matter to which the costs agreement related".

This article is general information about the Uniform Law, not legal advice, and does not take account of your practice's circumstances. It quotes the Legal Profession Uniform Law from the Victorian authorised version incorporating amendments as at 11 October 2023, and is current as at 15 September 2026. The Uniform Law applies in New South Wales, Victoria and Western Australia; other states and territories have their own legislation. Check the current legislation before relying on any of it.