- Costs are only available in proceedings under the Fair Work Act 2009 in limited circumstances.
- The unreasonable failure to accept a settlement offer can provide a basis for an award of costs in such proceedings. Given the default position that costs are not available, there is particular advantage in issuing an early and reasonable settlement offer in order to either settle the proceedings or enliven the power to be awarded costs.
- However, whether the failure to accept a reasonable settlement offer is unreasonable so as to enliven the power will turn on all of the circumstances and not merely on whether the offer was more favourable than the final outcome of the proceedings. Offers should be carefully drafted if the aim is to enliven the power to be awarded costs.
Costs are not generally available in proceedings under the Fair Work Act 2009 (Cth), although costs may be awarded in limited circumstances. Those limited circumstances include where an unreasonable act or omission has caused the other party to incur costs.
The failure to accept a settlement offer can be an unreasonable act or omission that causes the other party to incur costs, and thus provide a basis for an award of costs in such proceedings.
This article summarises the circumstances in which costs can be awarded in proceedings brought under the Fair Work Act, and goes on to consider the extent to which settlement offers can be used to enliven the possibility of obtaining costs.
The article concludes by providing some suggestions for drafting settlement offers so as to maximise the possibility of a costs award if the offer is rejected.