By Michelle Castle and Andrew Bailey -
Snapshot
- Separate certificates of determination should be issued by a costs assessor in respect of each costs order but failure to raise the issue may be fatal to any appeal.
- Proportionality is a non-mandatory consideration for the costs assessor under s 364 of the Legal Profession Act 2004 (NSW).
- On a practitioner/client assessment of costs it is for a costs assessor to quantify interest accruing on the bills as part of the costs assessment process.
- Where a person jointly and severally liable for costs is a bankrupt, a certificate judgment issued pursuant to s 368(5) of the Legal Profession Act 2004 (NSW) will not be invalidated and can still be enforced against the non-bankrupt party.
The New South Wales Court of Appeal has recently delivered two judgments which illuminate the workings of the sometimes confounding costs assessment system: Coshott v Barry [2015] NSWCA 257 (‘Coshott’); and eInduct Systems Pty Ltd v 3D Safety Services Pty Ltd [2015] NSWCA 284 (‘eInduct’), in which the authors appeared as counsel for the first to fifth respondents.
The indemnity principle, proportionality & the principles in Wende
In eInduct, the Court, on an application for judicial review of a decision of the District Court, considered three important points: the issuing of separate certificates where multiple costs orders are involved, the costs indemnity principle and proportionality of costs.
The reference to costs assessment and review
The underlying claim for costs arose out of two interlocutory costs orders made in proceedings in the Commercial List in the Supreme Court of New South Wales in favour of five defendants against a plaintiff. The law firm retained to act had issued a costs agreement under which ‘all defendants were jointly and severally liable for the costs of the proceedings’: eInduct per Simpson JA (at [108]), Beazley P (at [4]). The invoices were issued by the law firm to only one of the defendants.
The defendants in the Commercial List were successful on costs assessment and as respondents on review. Specific grounds of review were placed before the review panel: the primary complaint being that the costs assessor had incorrectly applied s 364 and had not determined fair and reasonable costs payable pursuant to the costs orders.
