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Costs
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Introduction
See Fair Work Act ss. 375B, 376, 570 and 611
Persons who incur legal costs in a general protections matter before the Fair Work Commission or a court generally pay their own costs.[1]
The Commission or a court has the discretion to order one party to a general protections matter to pay the other party’s legal or representational costs, but only where the Commission is satisfied the matter was commenced or responded to:
- vexatiously or without reasonable cause, or
- with no reasonable prospect of success.[2]
Costs may also be awarded to one party if the Commission or the Court is satisfied that the costs were incurred as a result of an unreasonable act or omission of the other party (but in the case of the Commission only for dismissals taking effect from 1 January 2014, when s.375B commenced).[3]
Costs may also be ordered against legal representatives.[4]
What are costs?
Costs are the amounts a party has paid to a lawyer or paid agent for advice and representation before a court or tribunal.
If a party is ordered to pay another party’s legal costs it will not usually be for the whole amount of legal costs incurred.
The Commission may order that only a proportion of the costs be paid. This may be either on a party-party basis or on an indemnity basis.
Party‒party costs
Party‒party costs are the legal costs that are deemed necessary and reasonable.[5]
The Commission will look at whether the legal work done was necessary and will decide what a fair and reasonable amount is for that work.[6]
Indemnity costs
Indemnity costs are also known as solicitor‒client costs.
Indemnity costs are all costs including fees, charges, disbursements, expenses and remuneration as long as they have not been unreasonably incurred.[7]
Indemnity costs cover a larger proportion of the legal costs than party-party costs.
They may be ordered when there has been an element of misconduct or delinquency on the part of the party being ordered to pay costs.380F[8]
Party‒party costs are the costs that one side pays to the other side in legal proceedings. They are the result of the Commission ordering that one party pay costs to the other party.
Indemnity costs are the costs that you pay to your solicitor for the work that they perform for your matter. The basis of these costs is a costs agreement between you and your solicitor.
Applying for costs
An application for costs before the Commission must be made within 14 days after the Commission finishes dealing with the dispute.[9]
What costs may be recovered?
The Fair Work Regulations include a ‘schedule of costs’ which sets out appropriate rates for common legal services. The schedule provides the Commission with guidance when exercising its jurisdiction to make an order for costs.[10]
The Commission is not limited to the items in the schedule of costs, but cannot exceed the rates or amounts in the schedule if an item is relevant to the matter.[11]
References
[1] Fair Work Act s.611(1).
[2] Fair Work Act s.611(2).
[3] Fair Work Act s.375B(1).
[4] Fair Work Act s.376(2).
[5] Butterworths Australian Legal Dictionary, 1997, 852.
[6] ibid.
[7] Butterworths Australian Legal Dictionary, 1997, 586.
[8] Oshlack v Richmond River Council (1998) 193 CLR 72 [44]; cited in Goffett v Recruitment National Pty Ltd (2009) 187 IR 262 [50]; and Stanley v QBE Management Services Pty Ltd [2012] FWA 10164 (unreported, Jones C, 18 December 2012) [24].
[9] Fair Work Act s.377.
[10] Fair Work Regulations reg 3.04; sch 3.1.
[11] Fair Work Regulations reg 3.04; sch 3.1.
Updated time
Last updated
15 June 2018
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