CIVIL AND CRIMINAL PROCEDURE NOTES 7

LEGAL COSTS ❖ In non-litigious practice, client pays for all legal costs it incurred. ❖ In litigious practice, normally: ➢ unsuccessful party pays its own legal costs & the successful party’s party-party costs; ➢ s ...

LEGAL COSTS ❖ In non-litigious practice, client pays for all legal costs it incurred. ❖ In litigious practice, normally: ➢ unsuccessful party pays its own legal costs & the successful party’s party-party costs; ➢ successful party pays the difference between its total legal costs & its party-party costs. Remuneration & Disbursements ❖ Total legal costs = solicitor’s remuneration + disbursements. ❖ “Solicitor’s remuneration” is determined according to costs scales. ❖ “Disbursements” = court/agency filing fees, administrative costs, experts’ fees, transcript fees, counsel’s fees. ➢ Client must pay disbursements, but only those incurred at the client’s instructions. PRESUMPTION: COSTS FOLLOW THE EVENT ❖ SCR 101.02: Costs of a proceeding follow the event, unless the Court otherwise orders. ➢ “Costs follow the event” means that the party who is unsuccessful in the entire litigation, or a step in the litigation (ie. an interlocutory application), pays the successful party’s legal costs. ➢ Costs orders are made along the way → at end of the case, the costs orders for each process in the proceedings must be offset against each other. ❖ Award of costs is not automatic – winning party still needs to ask for costs. ❖ Court always has discretion in awarding costs. TYPES OF COSTS AWARD ❖ Costs can be awarded on 2 bases: party-party basis or solicitor-client basis. ➢ Ordinarily, costs are awarded on a party-party basis (because the losing party should not have to bear costs that are not necessary for the conduct of the case). ❖ So normally the successful party will pay its own solicitorclient costs to its lawyer, and then recoup its party-party costs from the unsuccessful party. Party-Party costs ❖ SCR 101.07(6)(a): Party-party costs = costs which have been necessarily & reasonably incurred by the party in the conduct of the litigation. ❖ The quantum of costs award is determined by: ➢ a costs agreement between the parties; or ➢ if no such agreement exists – by taxation (calculated using the appropriate Costs Scales). Solicitor-Client costs ❖ SCR 101.07(6)(c): Solicitor-client costs = all costs reasonably incurred by the party in respect of the litigation & having regard to the proper interests of the persons who will ultimately bear the burden of such costs. ➢ “in respect of the litigation” may be interpreted widely to include any costs incurred as a result of (not just in the conduct of) the litigation. ➢ So solicitor-client costs include costs incurred that are not fundamental for running the case (eg. briefing best QC) – although any excess over the reasonable cost would not be a solicitor-client cost. ❖ SCR 101.07(6)(d): Solicitor-client costs provide a complete indemnity against all legal costs incurred by the successful party, other than those unreasonably incurred. ❖ The quantum of costs award is determined by: ➢ a costs agreement between the parties; or ➢ if no such agreement exists – by taxation (calculated using the appropriate Costs Scales); or ➢ SCR 101.08: The Court may give effect to costs agreement between client & solicitor (although Court may regard amounts over the taxed amount as being unreasonable). Circumstances where court may order solicitor-client costs ❖ Orders to pay an opponent’s solicitor-client costs are only made in exceptional circumstances: Misconduct of party ❖ Solicitor-client costs may be ordered against a party who: ➢ has been unduly difficult/obstructive/oppressive; ➢ puts the other party to unnecessary legal expense; or ➢ engaged in abuse of process. ❖ Packer v Meagher (abuse of process) ➢ *Pl took action & deliberately ran it for as long as possible to cause Def inconvenience, fully intending to discontinue the claim at the last possible moment (before losing), thus depriving Def of a costs award. ➢ Abuse of process → Solicitor-client costs were ordered. ❖ … (Def did not reveal a winning fact until the day before trial, and had Pl known of that fact earlier it would not have proceeded → Solicitor-client costs were ordered against the successful Def.) ❖ Hurstville Municipal Council v Connor: Pursuing a case (or aspects of it) that has no real prospects of success, may give rise to awards of solicitor-client costs. Public interest litigation ❖ Australian Fed Consumer Org v Tobacco Institute (party successfully took an action solely in the public interest → solicitor-client costs) EXCEPTIONS TO THE PRESUMPTION THAT COSTS FOLLOW THE EVENT ❖ A Court always has discretion to vary the normal costs award. ❖ The guiding principle is the achievement of justice between the parties.