Disbursements are the costs incurred by a lawyer or a conveyancer in connection with a legal matter, apart from the solicitor's fees. Depending on the circumstances of the matter, disbursement may include application fees, expert opinions, court hearings, and filing fees, interpreter's fees, etc.
There are two types of disbursements:
- Hard disbursements are expenses incurred on the client's behalf that require direct payment by the firm to a vendor. For example, court filing fees and application lodgment fees would be considered a hard cost. You would be expected to have an invoice for the exact cost of this expense that can be presented to a customer on request.
- Soft disbursements are expenses that are not directly paid to the vendor but are charged to the client. Soft costs are items such as faxes, photocopies, or telephone calls. You would not be able to produce an invoice for this expense as it would be an estimate.
NOTE: In some regions (e.g., New Zealand) there is a requirement to separate hard from soft disbursements on an invoice. This means that hard disbursements will be listed under Disbursements while soft will be listed in a different group of expenses.
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