Letter sent to Master Luppino Supreme Court of the Northern Territory
Supreme Court of the Northern Territory Practice Direction 1 of 2015
I refer to the correspondence between the Master’s Chambers, Dylan Walters and I on 6 and 7 January 2015 concerning Supreme Court Practice Direction 1 of 2015 dated 2 January 2015 (“PD1/15”).
Law Society Northern Territory (“Society”) has been contacted by some of its members who are concerned by the reduction in the rate per unit of a solicitor from $26.00 to $25.00 by PD1/15. The issue was considered by the Society’s Legal Practice Committee on 10 February 2015. On the basis of these submissions the Society requests the Master to reconsider the recommendation he made to the Chief Justice and that consideration be given to reissuing PD1/15:
1. Paragraph 4 of Part 1 of the Appendix to Order 63 of the Supreme Court Rules (“Paragraph 4”) requires the Chief Justice to declare the rate per unit of a solicitor and a clerk by practice direction from time to time after considering the recommendation of the Master.
Paragraph 4 also requires the Master to calculate and recommend any adjustment to the solicitor and clerk rate for each year on the basis of 37% the rate of the Consumer Price Index and 50% the rate of Average Weekly Earnings (“AWE”).
2. As such, both the language of Paragraph 4 and the deliberate gap of 13% left in the formula to be applied provide discretion to the Master and the Chief Justice in respectively recommending and declaring the value of a rate per unit.
3. In the case of PD1/15, the letter from the Department of Treasury and Finance to the Master dated 24 November 2014 (which the Master’s Chambers has kindly supplied us with) notes that in 2014 the value of a solicitor’s rate was calculated to be $25.50. In 2015 the value was calculated to be $25.47 i.e. a decrease of $0.03.
4. The discretionary consideration and declaration of the rate per unit ought take into account the principle of de minimis non curat lex, where in this case a minor statistical variation of $0.03 should not be allowed to give rise to a reduction of $10.00 per hour that a solicitor can charge by reference to Paragraph 4. To do so would produce an anomalous outcome.
5 .Many Territory practitioners, particularly sole practitioners and small and medium sized practices provide key access to legal services to members of the community by reference to the rate per unit declared under Paragraph 4. As such, a reduction of the rate has a significant impact on the ability of those practices to continue to deliver legal services to clients, many of whom are amongst some of the most needy and disadvantaged in the community.
6. In addition to this, sole practitioners and small to medium sized practices are under existing financial pressures which make them unable to absorb a further reduction in their earning capacity. The causes of these pressures include that Legal Aid rates have not increased for several years, that funding to legal aid bodies is being eroded and there are additional regulatory expenses such as in continuing professional development. These are the sorts of factors that the discretion built in to Paragraph 4 should take into account.
7. In circumstances where the reduction of the rate per unit has been brought about by a 2.2% decrease in the value of AWE it is also noted that awards and enterprise bargaining agreements are not designed to allow wages to decrease as a general rule. Although it is not expressly stated in Paragraph 4, the same general rule should apply to the calculation of the rates per unit.
8. If the value of AWE has decreased it would also be anomalous that a corresponding reduction in the solicitor’s rate per unit would have the effect of allowing clients to recover less of their fees incurred in the event of successful litigation than they would otherwise be permitted to.
9. The Society notes that the decrease in the value of AWE has not interfered with the value of the rate per unit for a clerk in PD1/15, which remains $14.00 as it was in 2014. A consistent application of the decrease in AWE favours leaving the value of a solicitor’s rate at $26.00 rather than reducing it.
10. Whilst the Society accepts that following the guide in Paragraph 4 there will be years where the rate will properly remain the same, 2015 is the first instance of deflation that the Society is aware of.
As the decrease in the rate is not mandated by Paragraph 4 but rather is a matter for the discretionary consideration of the Master and then the Chief Justice, we ask the Court to review PD1/15 with a view to issuing a new Practice Direction declaring the rate per unit for a solicitor at $26.00, with the clerk’s rate to remain unchanged at $14.00.
Thank you for the opportunity to make this submission. We look forward to hearing from you.
 The recommendation made under paragraph 4 of Part 1 of the Appendix to Order 63 of the Supreme Court Rules.