The Costs Court is a division of the Supreme Court of Victoria that deals with legal costs disputes.

Legal costs disputes can be either:

  • Lawyer-Client Dispute: A dispute between a client and their lawyer over the amount charged to the client for providing legal services
  • Party-Party Dispute: A dispute over the amount of legal costs a successful party can recover from the unsuccessful party following a legal proceeding in any court or tribunal in Victoria

There are currently 10 Associate Judges of the Costs Court, as well as a Judicial Registrar and 2 Costs Registrars.

The process of assessing legal costs undertaken by the Costs Court is called a taxation.

A Summons for Taxation must be issued to commence proceedings in the Costs Court. An information form is filed with the Summons – there are different information forms for Lawyer-Client and Party-Party disputes. A detailed bill of costs is also filed in Party-Party disputes.

Lawyer-Client Disputes

After a Summons is filed, the dispute will be listed for directions before the Judicial Registrar. At this directions hearing, the Judicial Registrar will set a timetable for filing supporting documents and submissions, and will consider whether mediation is appropriate.

Mediation may be in-person, via Zoom or hybrid.

The Costs Court’s website notes:

“You may consider representing yourself in a lawyer-client costs dispute before the Costs Court. Cost matters can be very complex and technical. It is strongly recommended that you seek legal advice from either another lawyer or a specialist costs lawyer/consultant.”

If the Court reduces the bill in a lawyer-client costs dispute by 15% or more, the Court may order the lawyer to pay the client’s costs of the Costs Court proceedings. However, if the bill is not reduced by at least 15%, the Court may order the client to pay costs of the proceedings in the Costs Court. The costs include the filing fee payable when the Summons is lodged and further fees payable during the dispute, as well as legal costs.

Note: time limits apply to commencing proceedings in the Costs Court for a lawyer-client dispute.

Party-Party Disputes

Once the Summons, bill of costs and information sheet are filed, the matter will be listed for:

  • Assessment in chambers if the amount bill is less than $100,000.
  • Mediation if the amount in the bill exceeds $100,000.

In accordance with current court protocol, mediation will be held online unless the parties are advised otherwise. If the parties agree that the mediation should be in-person or hybrid, they should inform the taxing officer as soon as possible and provide reasons for the proposed change. Mediations are held approximately 6 weeks after the Summons and other documents are filed.

If one party is self-represented, the matter may be listed for directions hearing.

Assessment

The Costs Court may make an estimate of the approximate total likely to be ordered. The estimate is made in the absence of the parties and without making any determination on the individual items in the bill.

The Court notifies the parties in writing of the estimate. Either party may lodge a notice of objection to the estimate, within 21 days.

If neither party objects, the Court will make an order for the amount of the estimate.

Mediation

Mediations are listed for between 1 hour and 3 hours, depending on the advice given by the parties regarding the complexity of the matter.

A Notice of Objections must be filed and served by the respondent at least 7 days prior to mediation. The Notice must list each item objected to in the bill of costs, and set out specifically the grounds of objection.

Parties attending mediation must have authority to settle, and must attend with their advising solicitors.

If the matter is not resolved, the mediator may list it for taxation for 1 (or more) days on the next available date.

Taxation

If the costs dispute proceeds to taxation, the Costs Court will assess the costs claimed by examining the bill of costs and supporting documentation in detail, and considering the arguments raised by both parties.

If the amount claimed in any bill of costs is reduced by 15% or more, no costs of preparing the bill and attending taxation will be allowed to the party that filed the bill unless the Costs Court otherwise orders. Formal offers of compromise and Calderbank offers have been relied on in circumstances where the Court has made an order otherwise.

Review of Costs Court Decisions

There is a 14-day time limit to seek a review or reconsideration of decision in a Cost Court proceeding.

Court Fees

Fees are payable to the Costs Court for:-

  • Filing a Summons
  • Filing an interlocutory application
  • Mediation
  • Taxation hearing or assessment
  • Application for review or reconsideration

Legal costs for work associated with a costs dispute are an additional expense. 

How can Blue Ribbon Legal assist you?

At Blue Ribbon Legal, we are able to help both lawyers and clients with costs disputes in Victoria. Our solicitors are experts in costs disputes, and will advise on costs disputes and early resolution, and appear in the Costs Court. Blue Ribbon Legal also prepares bills of costs and Notices of Objection for the Costs Court. 

If you are involved in a costs dispute in Victoria, we are available to provide assistance. So please get in touch with the experts in legal costs.