Costs Orders (ACT)

A court has discretion to make a costs order based on the facts of the case and legislation that applies. In the Australian Capital Territory, the Court Procedures Rules 2006 governs costs orders for both criminal and civil matters.

Power of the courts to make a costs order

The court has the power to make a costs order at any stage of a proceeding, and in relation to a particular issue or particular part of a proceeding. It also has the power to make a costs order that a party be paid, instead of total assessed costs:

• a part of assessed costs;
• assessed costs from a stated stage of the proceeding;
• an amount it decides;
• an amount to be decided in a way it directs.

Assessing costs

Costs are assessed on a party and party basis unless a court order or a law provides otherwise. This means an unsuccessful party must pay the costs of the successful party in the case.  A court has discretion to order costs be assessed on a solicitor and client basis or an indemnity basis.

Solicitor and client basis

These costs usually involve a costs agreement. Common methods of charging for legal work include charging according to time, charging a fixed or flat fee, and charging by reference to a scale of costs set out by the court rules.

A court may use this basis if costs are to be paid out of a fund, or to a party who sues or is sued as a trustee, or due to con-compliance with a court order or breach of an undertaking given to the court.

Indemnity basis

Indemnity costs are all costs reasonably incurred by a party, including fees, charges, expenses and lost remuneration. The party paying the costs has the burden of proving the costs were unreasonably incurred. The court can take into account any costs agreement between the recipient party and their lawyer.

Types of costs

The rules lists certain circumstances when a party or parties can be ordered to pay costs. These instances include when:

• a party amends a document;
• a party applies for an extension or shortening of a time set under the rules;
• a solicitor is appointed by the court as a litigation guardian of a person with a legal disability;
• a person is ordered, by subpoena or otherwise, to attend court to give evidence, produce a document or thing, answer a charge of contempt, or for any other purpose and they do not comply with the order.

Against a non-party

A court must not make a costs order against a person who is not part of the proceeding, unless an exception applies. Exceptions include when the person:

• has breached a court order or undertaking;
• has committed contempt of court or abused the court’s process;
• purports, without authority, to conduct a proceeding in someone else’s name;
• who starts or carries on a proceeding, or purports to do so, as an authorised director of a corporation.

Disallowance of costs

A court can order that the costs of anything done in a proceeding be disallowed completely or partly if it considers the action:

• was improper, vexatious or unreasonable;
• was because of misconduct or negligence;
• caused unnecessary expense.

If a document was prepared or used, a court can order that the costs of it be disallowed completely or partly if it considers the document:

• was completely or partly, improper, vexatious or unreasonable;
• was prepared or used because of misconduct or negligence;
• was unnecessarily long;
• substantially departed from the approved form.

Lawyer costs

A solicitor is entitled to charge costs under a prescribed scale of costs, multiplied by a prescribed percentage. The prescribed percentage for a proceeding in the Supreme Court is 100%, and for the Magistrates Court, if the amount is:

• less than $10,000 – 33%
• from $10,000 up to $25,000 – 67%
• from $25,000 up to $40,000 – 80%
• from $40,000 up to $50,000 – 90%
• more than $50,000 – 100%

In the Magistrates Court, if there are 2 or more defendants, costs must be assessed once only against the defendants on the basis of the largest judgment.

Costs against a lawyer

The rules allows a court to make a costs order against a lawyer in a proceeding where the lawyer delays a proceeding because they fail to, for example:

• attend court themselves or send someone to attend on their behalf;
• file, or deliver required documents or things;
• be prepared with any proper evidence or account;

and a party to the proceeding incurred costs because of the delay, misconduct or negligence of the lawyer.

The court can order that the lawyer:

• repay to a party all or part of any costs ordered to be paid to another party because of the lawyer’s conduct;
• pay costs incurred by any party because of the lawyer’s conduct;
• not charge the client costs in relation to all or part of a proceeding, in the interests of justice.

For advice or representation in any legal matter, please contact Armstrong Legal.