How to Recover Costs with the Costs Assessment Process

There is nothing worse than achieving a win in court and then being out of pocket with your legal costs. Thankfully, though, there are processes by which you can recover your costs from your opponent. A good percentage of costs disputes are resolved through negotiation between the parties. In New South Wales, there is a costs assessment process provided by the Legal Profession Act 2004 (NSW), which provides a relatively affordable and easy method of getting costs assessed and determined.

Costs Assessment Process

A party can apply to have their costs assessed to the Costs Assessment Manager for the whole or any part of their legal costs. The application is made by:

• Completing the approved form with any supporting documentation; and
• Filing the application with the Registry of the Supreme Court in triplicate and payment of the filing fee.

Once the application is made the other side will be given 21 days to provide a response. Regardless of whether a response is received, after 21 days the Manager will refer the application to a Costs Assessor as soon as reasonably practicable.

Costs Assessment Form

The Costs Assessment Form allows the party to make a detailed list of objections to the bill of costs, with supporting documentation. If necessary it also allows the client to apply to have the costs agreement set aside as being not fair, just or reasonable.

Supporting documentation includes:

• The costs agreement;
• The bill of costs; and
• Any additional documentation that is relevant to the fairness and reasonableness of the costs

The Costs Assessment Form also:

• Authorises a costs assessor to have access to and inspect all documents held by the applicant or the law practice concerning the relevant matter;
• States that there is no reasonable prospect of settlement of the matter by mediation.

Costs Assessment Criteria

The costs assessor will consider a number of factors including:

• Whether or not it was reasonable to carry out the work to which the legal costs relate
• Whether the work was carried out in a reasonable manner
• Fairness and reasonableness of the amount of legal costs about the work, to which the costs assessor may take into account:
• Compliance with relevant legislation and legal profession rules
• Costs disclosures made
• Relevant advertisements made regarding the law practice’s costs or skills
• Skill, labour and responsibility showed by the law practice
• Whether work was done within the scope of the retainer
• Complexity of the matter
• Quality of work
• Timeframe that the work was done in
• Any other relevant circumstances

Determination

The Costs Assessor will either confirm the original bill or, if the assessor feels the costs are unfair or unreasonable, substitute an amount that the assessor feels is a fair and reasonable amount.

Section 372 of the Legal Profession Act states a costs assessor’s determination of an application is binding on all parties and is final. However, either party can apply for a review of the determination within 30 days to the Manager under section 373. The determination can then be registered as a judgment in the Court and enforced as you would an ordinary judgment.

LegalVision has a team of experienced litigation lawyers with extensive experience with Costs Assessments. If you have any questions about the process or filling out a Costs Assessments form, get in touch with us.