EXPLANATORY STATEMENT
BANKRUPTCY ACT 1966
BANKRUPTCY RULES (AMENDMENT)
1987 NO 223
The purpose of the amendment to sub-rule 162(2) and Schedule 3 of the Bankruptcy Rules is to implement a recommendation by the Federal Costs Advisory Committee that the scale of solicitors’ costs in bankruptcy jurisdiction be increased by 2.6 per centum.
The Federal Costs Advisory Committee was established to advise the Attorney-General on variations in the quantum of costs for solicitors (including expenses and fees for witnesses) under the Bankruptcy Rules.
Under its terms of reference the Committee is required to have regard to:
(i) reasonable expenses incurred by solicitors in the conduct of their practices and the need for them to recover in full increases in these expenses;
(ii) the need for solicitors’ costs to be consistent with a reasonable return on capital and to provide appropriate recognition of professional skills;
(iii) government policy in relation to prices and incomes and in particular to paragraph 28 of the National Economic Summit Conference communique; and
(iv) any other relevant factors.
The Committee considered a number of submissions, both written and oral, when formulating its recommendation for an increase in the scale of solicitors’ costs under the Bankruptcy Rules. The appropriate increase was calculated by reference to movements in three broad areas of: salaries and wages, other overheads, and partners’ salaries and profit share and by consolidating the percentage movements in each component. For the purpose of calculating the increase in salaries, wages, partner’s salaries and profit share the Committee used movements in the Award Rates of Pay Index. Movements in the Consumer Price Index were used to calculate the increases in other overheads. The result is a 2.6% increase in relation to solicitors’ gross costs.
September 1987