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Clarifying Costs Orders

Clarifying Costs Orders

By Guy Donovan

Access to Justice 


Litigants in pro bono matters sometimes fail to obtain costs due to the indemnity principle. Claiming costs in a pro bono matter can be problematic due to the indemnity principle, that is, costs cannot be awarded in favour of a party unless they have an obligation to pay their lawyer’s fees. However, ensuring that a costs order can be made in your client’s favour is important in creating a level playing field in litigation. In King v King1 Chesterman JA expressed a preference for the view that a costs agreement stating that a party is only liable for the payment of fees upon the recovery of costs is not sufficient to support an order for costs in favour of a successful litigant. The issue received clarification in Mainieri & Anor v Cirillo,2 where the Court found that a costs agreement providing that a litigant was liable to pay fees upon a costs order being made in her favour satisfied the indemnity principle in allowing the successful litigant to obtain a costs order. The Supreme Court (General Civil Procedure) Rules 2015 have recently been amended to assist lawyers acting pro bono to recover costs. The new r63.34.2 appears to go further than Mainieri in stating that: “. . . the Court may make. . . any order for the recovery of the costs of the legal assistance that the Court might have made had the legal assistance been provided not on a pro bono basis but on the basis that the assisted party was under an obligation to pay for the legal assistance in the ordinary way.” Further, r63.34.1 states that representation on a “pro bono basis” includes where “the legal practitioner is to receive no professional fees from or on behalf of the person to or for whom the legal assistance is provided”. Accordingly, under the Rules, it is arguable that costs can now be ordered where the successful litigant has no obligation to pay fees. However, given the conflict between the indemnity principle and the Rules, it remains sensible to enter into a pro bono costs agreement that provides for an obligation to pay fees in accordance with Mainieri. Guy Donovan is Holding Redlich national pro bono manager. 1 [2012] QCA 81. 2 [2014] VSCA 227.

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