What am I paying for?: The difference between fees and disbursements.

Typically when a client receives an account from their lawyer the account will be broken down into fees and disbursements.

By law, lawyers are required to charge G.S.T. for their time on a file. The time a lawyer spends on a file may be billed on an hourly basis or as a block fee.

A block fee means the lawyer and client have worked out a pre-determined fee for the lawyer's time regardless of how much time a lawyer spends on the file.

In addition to this there are associated costs, known as disbursements, these are all the incidental costs related to the preparation of the case, examples might include photocopies; travel; or time spent by a law clerk.

Whatever arrangement you reach with your lawyer it is essential to ask what are you paying for and how will it appear on your statement of account. It is ashame to see an otherwise good solicitor - client relationship sullied by miscommunication, especially when such communication could have been remedied by brief discussion on fees and disbursements.