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A retainer agreement is a written contract between a client and a professional — most commonly a solicitor — that sets out the scope of work to be performed, the fee arrangements, and the mutual obligations of both parties. In the legal profession it is more precisely called a costs agreement, and Australian law requires lawyers to provide one in most circumstances.
The document matters because it defines the professional relationship before anything else happens. It is the baseline against which the professional’s entire conduct is later measured — and in a negligence claim, that baseline is everything.
The term “retainer” is sometimes used loosely. It can refer to the document itself, to the ongoing relationship, or to an upfront payment made to secure a lawyer’s availability. For the purposes of a professional negligence claim, what matters is the written record of the engagement — whatever it happens to be called.
Under the Legal Profession Uniform Law (which applies in NSW and VIC) and equivalent legislation across other states — including the Legal Profession Act 2007 (QLD) and the Legal Profession Act 2008 (WA) — solicitors are required to provide clients with costs disclosure and, in most cases, a written costs agreement. The requirements are specific and deliberately detailed.
A clear statement of what the lawyer is being engaged to do. A properly drafted agreement will specify the matter, the scope, and what falls outside it.
Whether that's an hourly rate, a fixed fee, or a conditional costs agreement (commonly called no-win, no-fee). The fee basis must be transparent.
Costs incurred on your behalf — court filing fees, barristers' fees, expert report costs. These are separate from professional fees and must be disclosed upfront.
How often you'll be invoiced and when payment is due.
This is a legal right, not a courtesy. The agreement must inform you of it explicitly.
Before signing, you are entitled to take the agreement away and obtain independent advice on its terms.
If estimated costs change significantly during the matter, the lawyer is legally required to inform you — a continuing duty, not a one-off disclosure.
The agreement must inform you of your right to make a complaint to the relevant Law Society or Legal Services Commissioner.
If your lawyer failed to provide a compliant costs agreement — or failed to provide one at all — that is a potential regulatory breach. It may also be directly relevant to a broader professional negligence claim.
The terminology can create confusion, and it is worth clearing up. The core concept is the same across all three — a written record defining the professional’s obligations. The label depends on context.
The statutory term under Australian legal profession legislation. It is the formal written document that satisfies a solicitor's disclosure obligations under the applicable act. In NSW and VIC, compliance with the Legal Profession Uniform Law means providing a costs agreement.
In its original sense, a sum paid to retain a lawyer's availability before a matter arose. Over time it came to describe the engagement document itself. Both usages remain in everyday practice — the two terms are often used interchangeably.
More commonly used by non-legal professionals — accountants, consultants, engineers, architects. It serves the same conceptual function: a written statement of what the professional has been engaged to do, on what terms, and for what fee. Contractually binding and evidentiarily significant.
A retainer sets out, in the professional's own words, what they agreed to do. Professional negligence claims turn on whether a duty existed, whether it was breached, and whether that breach caused loss. The retainer is the clearest possible statement of what the duty was. The High Court's decision in Hawkins v Clayton (1988) recognised that a solicitor's engagement can impose positive obligations — not just to do what was explicitly requested, but in some circumstances to act proactively to protect the client's interests.
If your lawyer agreed in the costs agreement to file proceedings by a particular date, and they missed the limitation period, that document is direct evidence that the obligation existed and was not met. The retainer does not just describe the relationship — it creates it. That makes it contractual evidence as well as professional standards evidence.
Sometimes a retainer is deliberately drawn narrowly. A claim can arise not just from what was done badly, but from what was not done when it should have been. Courts have examined whether a solicitor had an obligation to advise on matters technically outside the strict scope of the retainer, particularly where a failure to do so left the client exposed to a loss they could not have anticipated.
The retainer also helps establish what you were reasonably entitled to expect. If the professional's engagement document described a specific scope of advice and their negligent performance caused you a loss, the retainer helps quantify the gap between what should have happened and what did. That feeds directly into the assessment of damages.
Many claimants have lost their copy, were never given one, or received it years ago and can no longer locate it. None of these situations automatically ends a claim. There are several practical steps worth taking before drawing any conclusions.
While retainers and costs agreements are most closely associated with lawyers, the underlying concept applies across professional engagements. Whatever the profession, the engagement document serves the same function: defining obligations, setting expectations, and creating the evidentiary baseline for any future claim.
Accountants issue letters of engagement that define the scope of tax, advisory, or audit work. When an accountant's advice leads to an ATO audit, a penalty, or a flawed commercial transaction, the engagement letter establishes what they were retained to do — and whether the advice fell inside or outside that scope.
Regulated under the Corporations Act 2001 (Cth), financial advisers must provide a Financial Services Guide and Statement of Advice before giving personal financial advice. These documents define the relationship, the basis of the advice, and the adviser's obligations — and are central evidence in financial advice negligence claims.
Engineers, architects, and building consultants operate under formal contracts and scope of works documents. In construction defect and structural failure claims, the contract defines the professional's obligations and the standard against which their performance is assessed.
Medical professionals do not use a retainer in the traditional sense, but informed consent documentation and clinical notes serve a comparable evidentiary function — establishing what the patient was told, what was agreed to, and what the clinician understood themselves to be responsible for.
A retainer agreement — or costs agreement — is a written contract between a client and their solicitor that sets out what work will be performed, how fees are calculated, and what each party’s obligations are. Under the Legal Profession Uniform Law (NSW and VIC) and equivalent state legislation, solicitors are generally required to provide formal costs disclosure and a written costs agreement before commencing work on a matter.
In practice, yes — the terms are often used interchangeably. Technically, ‘costs agreement’ is the statutory term under Australian legal profession legislation, while ‘retainer’ is older and more informal. Both describe the written document that defines the scope of the lawyer’s engagement and the fee arrangements. Either term points to the same document: the one that matters most when a claim arises.
Failing to provide a compliant costs agreement is a breach of the solicitor’s disclosure obligations under the applicable Legal Profession legislation. The client may have grounds to challenge the fees charged. That failure may also be relevant evidence in a professional negligence claim — particularly where it supports a broader pattern of conduct that fell below the expected professional standard.
Yes. The retainer defines the scope of the professional’s duty — it is the clearest statement of what they agreed to do and on what terms. In a negligence claim, it is the starting point for establishing that a duty existed and what its content was. Where the retainer records specific obligations that were not met, it is direct evidence of breach. Where it describes expected outcomes that did not materialise due to the professional’s failings, it assists in quantifying loss.
Accountants typically provide letters of engagement that serve the same purpose — defining scope of work, fees, and professional obligations. Financial advisers regulated under the Corporations Act 2001 (Cth) must provide a Financial Services Guide and Statement of Advice before giving personal financial advice. Both documents function as the equivalent of a retainer, establishing what the professional was engaged to do and the standard to which they were held.
Under most state Law Society rules, solicitors are required to retain client files for a minimum of seven years from the completion of the matter. If you need a copy of your costs agreement, you are entitled to request it. If the solicitor is uncooperative or has left practice, the relevant state Law Society can usually assist in locating or obtaining the file.
Our goal is to help people in the best way possible. this is a basic principle in every case and cause for success. contact us today for a free consultation.
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