COSTS - Public Interest Litigation

Transcription

1 COSTS - Public Interest Litigation NSW CLC Quarterlies 20 February 2014 Sue Higginson Principal Solicitor

2 Money s too tight to mention - for CLCs? CLCs run on the smell of an oily rag (bio-fuel hopefully!) Costs are a barrier to bringing proceedings: Protective Costs Orders Can be sought to bring proceedings that otherwise couldn t be brought Limits the amount of costs that can be claimed (by both parties) Public interest relevant Security for costs New UCPRs Rule: (1A) Security for costs Introduced Aug 2013 criteria to consider Rule Security for Costs NOT to be ordered in judicial review cases (only in exceptional circumstances) Save Little Beach Manly Foreshore Incorporated v Manly Council [2013] NSWLEC 155 When we do get to Court we want to be able to recover costs in the event of a successful outcome

3 Conditional Costs Agreements Payment of Legal Costs Conditional on a Successful Outcome Prohibited in Criminal Law and Family Law cases Expressly Permitted under s323 Legal Profession Act Must define successful outcome Must be in writing, plain language, signed by client Must state right to seek independent legal advice Must have 5 business day cooling off period

4 King v King & Ors [2012] QCA 81 The Applicant was successful the costs agreement stated: 4.3 Legal costs recovered from another party If you are successful in your matter, the court may order... that the other party or parties pay certain legal fees and expenses In those circumstances, we may charge you for the legal fees and the expenses we have incurred on your behalf to an amount no greater than the amount of legal fees and expenses recovered from the other party... pursuant to such court order... The client agreed that this variation should apply retrospectively to all work undertaken in relation to the matter.

5 The Indemnity Principle An order for costs operates as an indemnity to a successful party in litigation. Costs are awarded to recompense a successful party in respect of what it cost to bring or defend successful proceedings. A corollary is that the unsuccessful litigant is not required to pay any more than the costs incurred by his successful opponent Before the right to indemnity can arise the successful litigant must be under a legal liability to his solicitors to pay costs. Another corollary is that if a successful litigant s lawyers act for him without charge he is not entitled to an order for costs. There is nothing to indemnify him against.

6 Circle of Liability Wentworth v Rogers [2005] NSWSC 143 If the entitlement to recover costs from another party to the proceedings is dependent upon the legal liability to pay those costs to one s legal advisors, but the obligation to pay is contingent upon establishing a right to recover, the circularity is readily apparent. However, if, as in the present case, the obligation to pay depends not on a right to recover an identifiable amount of costs, but on the actual recovery of those costs, there may be no extant legal obligation to be indemnified even when a costs order is made.

7 What Now? King provided a majority judgment (Chesterman JA and White JA, Wilson AJA not deciding) in the Queensland Court of Appeal that Basten JA s reasoning in Wentworth in the NSW Supreme Court is the preferred view regarding conditional costs agreements. Neither of these cases needed to determine the entitlement to seek costs from the other parties on the basis that no liability arose. In both judgments, this discussion is obiter dicta. However, the expressed opinions of 3 Court of Appeal judges should be given some weight. From a risk management perspective, it would be appropriate to pay heed to those views. Agreements with Barristers where the CLC becomes liable for debt

8 Successful outcome of the matter The successful outcome of the matter, as agreed with you, is succeeding in the proceedings before the (insert Court) and obtaining a costs order in your favour, (including in relation to any interlocutory application or any other such application). In some circumstances due to the conduct of the other parties, you may obtain a costs order in your favour even when the proceedings are not successful, and in those circumstances you agree to treat the result as a successful outcome for the purposes of costs.