1. Specific cost orders:
a. Costs in the cause are awarded to whoever gets the costs of the proceedings.
b. Costs reserved refers to the question of who pays the costs is left to be decided at a later date.
c. Often, a final order or terms of settlement will specifically include reserved costs as part of the costs order;
d. Cost court can make an order for reserved costs if no earlier order is made.
e. Costs in any event is when the successful party in an application gets their costs of the application, no matter what the final cost order is.
f. Costs of amendments has the effect of the amending party paying all costs flowing from the amendment application.
g. Costs thrown away is generally made as a result of amendments to pleadings or adjournment of a hearing.
h. Bullock and Sanderson orders is applicable if a plaintiff sues two defendants, and fails against one, but the court holds that it was appropriate for the plaintiff to sue both defendants.
i. A Bullock order provides that the plaintiff pay the successful defendant’s costs, and the unsuccessful defendant indemnify the plaintiff for those costs;
j. A Sanderson Order provides that the unsuccessful defendant directly pay the costs of the successful defendant;
k. Bullock and Sanderson orders may also be made where defendants are successful and have joined third parties.
l. No order as to costs means that each party bears its own costs. If an order is silent as to costs then each party bears its own costs.
m. Costs of the application means all the costs associated with the particular application are recoverable.
n. Costs of the day is different from costs of the application. This order allows the costs of the day including the brief to counsel, counsels’ appearance fees generally not any other documents associated with an application unless served on the day.
o. Costs of and incidental to means the same as ‘costs of’.
p. Costs of action and counterclaim means that the party receiving the costs of the claim should recover the general costs and whatever was reasonably incurred in bringing and maintaining or defending the action or counterclaim.
2. Proceedings in wrong court allows provisions reducing the costs recoverable if the quantum recovered is low and clear proceedings should be brought in a lower court.
a. Lump Sum Costs Orders (or gross sum costs orders) have power to award a lump sum in lieu of scale costs.
b. Security for costs order recognises that orders of the court relating to payment of a party’s legal costs can be very difficult to enforce in non-common law jurisdictions, and so will order security to be provided.
c. Security can also be ordered where a plaintiff is insolvent, or prone to vexatious litigation.
3. Interlocutory orders provides that a party cannot tax an interlocutory order for costs prior to the conclusion of proceedings without an order of the court.
a. The most common grounds for such an order is where there are a substantial number of amendments to the pleadings, but other instances include adjournment of trial and other circumstances resulting in the delay in eventual conclusion of proceedings.
4. Scale of costs:
a. Scales of costs are regulated by Acts of Parliament or Statutory Rules and their application is supervised by the courts.
b. Scales of costs prescribe charges a practitioner can make for items of work; from preparing a document to issue proceedings; a call to writing a letter.
c. For a non-litigious matter; that is a matter that does not involve the commencement or conduct of proceedings in a court or tribunal; for example the administration of a deceased estate or the sale of a property practitioners can apply the Practitioner Remuneration Order (PRO) to calculate their professional fees.
d. Litigious matters (matters that involve, or are likely to involve the issue of proceedings) can also be costed using a statutory scale of costs.
5. A legal practice, in the absence of a costs agreement, will calculate its professional fees by applying the statutory scales of costs.
6. Most Victorian and Federal courts have their own scale of costs.
7. A party cannot adopt the Supreme Court scale unless the substantive proceeding are issued in the Supreme Court or a valid Costs Agreement adopts the Supreme Court scale in lieu of another scale.
8. The scale of costs applicable in Victoria are:
a. Practitioner Remuneration Order (if it is a non litigious matter);
b. Magistrates’ Court;
c. County Court (VCAT uses the County Court scale as a default);
d. Supreme Court;
e. Federal Court;
f. Federal Circuit Court;
g. Family Court;
h. Probate;
i. High Court.
j. There is no specific scale for the taxation of costs in criminal jurisdiction in any Australian State.
k. The logic is that the courts have consistently considered the Crown not pay costs in the criminal jurisdiction (Re Carter, Lucas and Connell 920530 WA).
9. Right of Client to Taxation:
a. Rights of the client to have bill taxed:
i. Where a litigant is entitled to costs under a judgement, a bill for all the costs to which he or she is entitled under the judgement must be lodged for taxation.
ii. A party chargeable has an absolute right to have a bill taxed;
iii. A client or third party payer are entitled to apply for a review of the whole or any part of the legal costs charged by a legal practice;
iv. A court may direct taxation of a solicitor’s bill of costs;
10. Client may object to a bill if no more than 12 months since the solicitor delivered the bill and seeks the costs through the courts.
11. A client or third party payer are entitled to apply to the Cost Court for a review of the whole or any part of the legal costs charged by a legal practice.
12. An application for review must be made within 12 months after the bill of costs was given, the costs paid or a request for payment was made.
13. The Cost Court may consider an application made out of time (except by a “commercial or government” client) having regard to the delay and reasons for delay that it’s just and fair to be dealt with after a 12 month period.
14. Right of Solicitor to Taxation:
a. Generally, a legal practice cannot commence proceedings to recover legal costs until at least 65 days after delivery of a bill of costs.
b. A bill of costs can either be in the form of a lump sum bill or an itemized bill.
c. A law practice cannot issue recovery proceedings and any recovery proceedings on foot must be stayed if an application for cost review is made.
Daniel Epstein of Counsel
