I recently presented at a conference of In-House Counsel and in one session the question came up about whether in-house counsel would be personally liable for barrister's fees, if they direct briefed. But what do we mean by "direct briefing" anyway? Simply, it means that in-house counsel send a brief to a barrister directly, and not involve a solicitor as a middle-man. The concern was, that unless barrister's cost agreement was with the in-house counsel, and thereby making him or her personally responsible for payment of the barrister's fees, the Bar Ethics Rules preventing direct briefing by a client would be breached. I am a great proponent of direct briefing as a way of controlling costs. I will post separately on the dos and don'ts of direct briefing but suffice to say, in-house counsel will not be potentially liable for payment of barrister's fees, nor is there is a breach of either the Legal Profession Act or the Bar ethic rules when there is a direct brief, if done properly. This is easiest to understand if you keep in mind there are two different aspects to engaging the barrister - firstly, who is briefing the barrister and secondly, who is agreeing to be responsible for his/her fees. In-house counsel would brief the barrister, so the direct briefing rule is not breached as the barrister is not accepting a brief or instructions directly from a client (the definition of direct access in the Bar Rules).
However, the company itself (the client) would agree to be responsible for the barrister's fees and therefore the cost agreement would be between the barrister and the client. This arrangement is envisaged by s 3.4.26 of the Legal Profession Act (Victoria) (and equivalent provisions in other state Acts)
s. 3.4.26
(1) A costs agreement may be made:
(b) between a client and a law practice retained on behalf of the client by another law practice;
In this instance, the barrister only has to give the disclosure normally required to be given to a solicitor retaining them on behalf of a client (i.e. details of how the barrister is charging, when he/she is going to bill, and an estimate of fees to be incurred). To clarify a couple of points: Unless the barrister is charging in accordance with scale, a cost agreement is always required. Disclosure is not required where the client is a sophisticated client (as defined by the Act), (most commonly publicly listed companies and the Government). Only conditional cost agreements need to be signed - for all other agreements it is possible to specify what conduct will constitute acceptance (most commonly continued instructions).
