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Costs: Party party taxations

Costs: Party party taxations

By LIV Costs Law Executive Committee

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Without defensive strategies in place, a winning party may become the loser.

The impact of Supreme Court (General Civil Procedure) Rules 2015 (SCR) 63.85 can be a serious impediment to a winning party maximising costs recovery when taxing costs. If a bill of costs (ie professional fees and disbursements) is reduced by more than 15 per cent on taxation, the rule requires the Costs Court to disallow the costs applicant’s solicitor the costs of preparation of the bill and for attending the taxation. However, the rule gives the Costs Court a discretion to otherwise order.

Without defensive strategies in place, a winning party may become the losing party.

The conduct of the parties in the costs recovery process is relevant to the exercise of discretion by the Costs Court. In the event the rule is triggered, the following steps may assist in persuading the Court that the costs applicant has taken reasonable steps to resolve the costs dispute and that the rule should not be applied:

  1. Adopt a proactive position regarding negotiating reasonable fees with counsel as these fees are where the most significant reductions commonly occur
  2. Seek certification of counsel’s fees above scale by the trial judge or obtain an order from the judge that the Costs Court be empowered to allow fees above scale under SCR 63.34(4)
  3. Advise clients of the impact of the rule prior to incurring the costs of an itemised bill and obtain instructions to negotiate costs at an early stage
  4. Make serious efforts to resolve costs prior to preparing an itemised bill
  5. Continue negotiations after the itemised bill is prepared and summons for taxation is filed.

A warning to a paying party: doing nothing to resolve costs, making unreasonable or no offers or forcing a taxation may also be grounds that a successful party could raise with the Costs Court as factors to consider when deciding whether to exercise its discretion.

LIV Costs Law Executive Committee


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