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Costs Orders Against Lawyers in the Federal Circuit and Family Court of Australia

Costs orders may be granted by a court in respect of legal costs incurred by a party in relation to proceedings. For example, one party may be ordered to pay “party/party” costs which is a portion of the legal costs of the other party. The provision of costs orders is at the discretion of the court. Pursuant to s 117(2) of the Family Law Act 1975 (Cth), where the court is of the opinion that there are circumstances that justify the provision of costs orders, it may make such orders ‘as it considers just’.

Are lawyers at risk of a costs order against them under the FCFCOA? The regulation of a legal practitioner’s conduct in Family Law proceedings is not a new concept. Prior to the merger of the Federal Circuit and Family Court, costs orders against lawyers were possible pursuant to Rule 19.10 of the Family Law Rules 2004 (Cth). This rule has been updated in the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth). Costs orders can now be made on the initiative of the court or upon application by a party, pursuant to Rule 12.15. Under this rule, the court may make an order for costs against a lawyer, if the lawyer or their employee/agent, has caused costs to be incurred by a party, or to be thrown away, because of:

  • A failure to comply with the Rules or an order; or
  • A failure to comply with a pre-action procedure; or
  • Improper or unreasonable conduct; or
  • Undue delay or default

If any of these requirements are satisfied, the court may make an order for costs against the lawyer which directs them to:

  • not charge the lawyer’s client for work specified in the order; or
  • repay money that the client has already paid towards those costs; or
  • repay to the client any costs that the client has been ordered to pay to another party or another person; or
  • pay the costs of a party; or
  • repay another person’s costs found to be incurred or wasted

The Federal Circuit and Family Court of Australia has emphasised the need to decrease costs of proceedings and resource expenditure of the court and parties involved in proceedings. As such, the court expects parties and their lawyers to have in mind, at all times, the cost of each step in the proceedings in order to avoid unnecessary process-driven costs. Failure to comply with this requirement may attract a costs orders against practitioners, as outlined above.

While both sets of rules are very similar, one distinguishing feature of Rule 12.15 is its clarification when a lawyer is considered to be in default. Under the new rules, a lawyer may be in default if a hearing may not proceed conveniently because the lawyer has unreasonably failed to:

  • Attend, or send another person to attend, the hearing; or
  • File, lodge or deliver a document as required; or
  • Prepare any proper evidence or information; or
  • Do any other act necessary for the hearing to proceed

Ultimately, the renewed focus of the court on the experience of litigants has refocused the Court’s attention to the costs incurred by conduct of legal practitioners. Despite minimal changes between the rules regarding costs orders against lawyers, the court’s aim to reduce costs for parties involved in proceedings may instil an increased level of scrutiny upon the legal profession.

At Nicholes Family Lawyers, we are mindful of the way the new rules impact on costs to clients and obligations of practitioners that follow. Please reach out to us for more information on this topic, or visit https://www.fcfcoa.gov.au/fl/pubs/legal-costs.

By Nicholes Family Lawyers


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