Costs disclosure: when it is required, and what a late one costs you

One of the few obligations where getting it wrong lands directly on the practice's own income. Check your own regulator: the thresholds and the detail differ between jurisdictions.

When it is due

• Before you are retained, or as soon as practicable after. The second is the common case, because the client rang and the work started.
• As soon as practicable runs from the retainer, not from when the file got busy.
• The thresholds change the form, not the duty. Below the lower one, short form. Above it, full disclosure including an estimate of total costs and the client's rights. Above the higher one, more again.
• An estimate is of the total, not of the next step. A range is fine where a range is honest.

When the estimate stops being true

The duty continues. If the matter will cost materially more than you said, disclose that when you know, not when you bill. A matter that quietly triples while the client works from the original estimate is the fact pattern behind most costs disputes.

What a defective disclosure costs

• The costs agreement can be set aside.
• The client need not pay until the costs are assessed.
• The practice may not recover costs at all until it has complied.
• It is capable of being unsatisfactory professional conduct.

The fix is a habit, not a template

Most defective disclosures are not badly drafted. They are late, or never sent, because the matter opened informally. The fix is that a matter cannot be opened without the disclosure going out, which is a workflow question rather than a drafting one.