The Australian Pro Bono Manual
         Appendix 1: Precedents
         LETTER OF ENGAGEMENT — COSTS AGREEMENT
         GUIDANCE NOTE
         This letter of engagement precedent takes the form of a costs agreement. It can be tailored for use in either non-
         litigated matters (Option A) or litigated matters (Option B).
         Key terms:
           ● In litigated matters, the firm can recover costs as awarded or agreed as part of a settlement, and the
            agreement details the process of estimating costs that would be recovered. Estimates are provided of
            costs likely to be awarded (if successful) or alternatively paid (if unsuccessful).
           ● In non-litigated matters, professional fees are not charged.
           ● Disbursements are charged to the client (unless approval is obtained to do otherwise).
         Precedents in the Australian Pro Bono Manual are provided with the generous assistance of leading Australian
         law firms, and have been developed to reflect best practice in pro bono. 
         There are two or more examples of each type of precedent to accommodate the various ways in which firms
         coordinate their pro bono programs. Use the precedent that best reflects the firm’s size, structure, systems,
         organisational culture and policies. Precedents should also be adapted as necessary to comply with the firm’s
         house style and terminology.
         The Centre welcomes feedback on the usefulness and ease of use of these precedents, especially from firms in
         the early stages of developing a formal pro bono program.
                 LETTER OF ENGAGEMENT — COSTS AGREEMENT
                     Costs Agreement
                     Note: this agreement provides for disbursements to be charged to clients in all cases. If you do not plan to
                     charge disbursements (for example, if the client is a disadvantaged individual) please seek approval from the
                     pro bono coordinator first.
                     Details
                                                  Name
                    You, our client              [     ]
                                                  ABN
                                                 [    ]
                                                  Address
                                                 [       ]
                                                 Contact: [name and title]
                                                  Name
                    Associated Third Party       [     ]
                    Payer
                                                  ABN
                                                 [    ]
                                                  Address
                                                 [       ]
                                                 Contact: [name and title]
                                                  insert
                    The work we have been        [     ]
                    asked to do
                                                  Name
                    Responsible contact at       [     ]
                    [Firm]
                                                  date
                    This agreement starts on     [    ]
                    Hourly rates                 These are given on page [insert] (Only for Option B — Litigated Matter)
                                                  insert
                    File name and number         [     ]
                    Costs                        Note: select either Option A (Non Litigated Matter) or Option B (Litigated
                                                 Matter)
                                                 Option A — Non Litigated Matter
                                                 We have agreed to act for you in this matter on a pro bono basis.
                                                 This means that we will not charge you for our professional fees.
                                                 However, we will charge you for our disbursements.
                                                 Disbursements are expenses we incur on your behalf for services supplied
                                                 or payments charged by third parties. We will incur such disbursements as
                                                 agent for you and we will only recover from you the amount paid by us to
                                                 the third party (inclusive of any GST the third party has included in that
                                                 amount).
                                                 Set out below is a list of the likely disbursements you will incur in this
                                                 matter and an estimate of your total disbursements. However, this is only an
                                                 estimate and is not binding on us. We will let you know if the estimate
                                                 needs revising.
                                                 We will also obtain your approval and consent before we incur any
                                                 disbursements which are not listed in the table below.
                                                                                                                      1
                                                                          GST exclusive        GST amount         GST inclusive
                                                                                ($)                 ($)                 ($)
                                                      Disbursements       [amount]           [amount]            [amount] 
                                                      (GST-free)
                                                      Disbursements       [amount]           [amount]            [amount] 
                                                      (not GST-free)
                                                      Cost                [amount]           [amount]            [amount] 
                     For litigious matters only     Option B — Litigated Matter
                                                    We have agreed to act for you in this matter on a pro bono basis.
                                                    This means that we will not charge you for our professional fees unless the
                                                    work we perform for you results in an ‘Entitlement to Costs’ (as defined
                                                    below).
                                                    Regardless of whether or not the work we perform for you results in an
                                                    ‘Entitlement   to   Costs’,   we   will   charge   you   for   our   disbursements.
                                                    Disbursements are expenses we incur on your behalf for services supplied
                                                    or payments charged by third parties. We will incur such disbursements as
                                                    agent for you and we will only recover from you the amount paid by us to
                                                    the third party (inclusive of any GST the third party has included in that
                                                    amount).
                                                    The standard hourly rates that will apply in this matter are as follows:
                                                      Title                     Estimated number           Rate
                                                                                of hours
                                                      Partner
                                                      Special Counsel
                                                      Senior Associate
                                                      Solicitor
                                                      Paralegal
                                                    An estimate of the costs that may be payable, if you are successful or not, is
                                                                   insert
                                                    given on page [      ].
                                                    As soon as practicable after there is any significant change to anything
                                                    previously disclosed to you, we will provide you with information disclosing
                                                    the change, including information about any significant change to legal costs
                                                    that will be payable by you.
                                                    Set out below is a list of the likely disbursements you will incur in this
                                                    matter and an estimate of your total disbursements. However, this is only an
                                                    estimate and is not binding on us. We will let you know if the estimate
                                                    needs revising.
                                                    We will   obtain   your   approval   and   consent   before   we   incur   any
                                                    disbursements which are not listed in the table below.
                                                                          GST exclusive        GST amount         GST inclusive
                                                                                ($)                 ($)                 ($)
                                                      Disbursements       [amount]           [amount]            [amount] 
                                                      (GST-free)
                                                      Disbursements       [amount]           [amount]            [amount] 
                                                      (not GST-free)
                                                      Cost                [amount]           [amount]            [amount] 
                                                                                                                              2
                                                                     An ‘Entitlement to Costs’ means any of the following during or at the end
                                                                     of the work performed for you:
                                                                     (a) either of:
                                                                           (i)  a court or tribunal judgment, award or order for costs in your
                                                                                favour; or
                                                                           (ii) an agreement that our costs or disbursements or both be paid by
                                                                                another party; and
                                                                     (b) you are able to recover some or all of our standard hourly charges and
                                                                           disbursements from the other party.
                            As soon as practicable after there is any significant change to anything previously disclosed to you, we will 
                            provide you with information disclosing the change, including information about any significant change to 
                            legal costs that will be payable by you.
                            Important
                            We are obliged to take all reasonable steps to satisfy ourselves that you have understood and given consent 
                            to the proposed course of action for the conduct of the matter and the proposed costs. If you have any 
                            questions in respect of any of the matters set out in this costs agreement, please contact us. We will 
                            endeavour to provide answers to you in respect of any such questions.
                            Signing Page
                            Signed as an agreement.
                            Signed by on behalf of 
                             Name
                            [        ]
                                                                     sign (authorised person)
                                                                     title (authorised person)
                                                                     full name (authorised person)
                                           Associated Third 
                            Signed by [
                            Party Payer name (or use                 sign sign
                            alternative clause 
                            for individuals)] in accordance          office (director or secretary)  office (director or secretary)
                            with the provisions of                   full name   full name
                            s 127(1) of the Corporations 
                            Act 2001 (Cth)
                            Signed on behalf of [Firm]
                                                                     sign (authorised person)
                                                                     Partner
                                                                     title (authorised person)
                                                                     full name (authorised person)
                             Agreement
                               1    Client
                                    References in this agreement to you are references to you, our client. If there is more than one of you
                                    then this binds each separately and you each need to consider obtaining independent advice.
                                    In that case, we may report to and take instructions from any one of you on behalf of all. By acting for
                                    more than one of you, we may be prevented from disclosing all relevant information which is within
                                    our knowledge or giving advice to one, which is contrary to the interests of another. We may have to
                                    cease to act for all if we would otherwise have to act in a manner contrary to the interests of one of
                                    you. Further, if we decide to cease to act for you in such circumstances, you agree that we may decide
                                                                                                                                                                      3