In the State of NSW, we are fortunate to have a rather efficient process for the determination of legal costs payable between parties to litigation. The Costs Assessment Process, is a relatively new system and reduces the further costs and time involved in a party recovering their legal costs under an order of the Court.
However, it may be argued that in some instances a gross sum costs order offers even more efficiency in the recovery of legal costs.
The process of assessment by a costs assessor initially resulted in reluctance by courts to order gross sum costs against a party, unless the litigation was protracted or complex (Idoport Pty Ltd v National Australia Bank [2005] NSWSC 1273) or, particularly, if it appeared that the party obliged to pay the costs would not be able to meet a liability of the order likely to result from the assessment (Leary v Leary (1987) 1 WLR 72).
The initial reluctance of the courts to order gross sum costs, however has, according to Brereton J in In the matter of Optimisation Australia Pty Ltd [2018] NSWSC 280 “increasingly dissipated” (Poulos v Eberstaller (No 2) [2014] NSWSC 235) and it may be seen that the Court will, in those special circumstances, be more inclined to make a gross sum costs order.
The power to order gross sum costs should only be exercised when the Court considers that it can do so fairly between the parties, and that includes the Court having sufficient confidence in arriving at an appropriate sum on the materials available (Wentworth v Wentworth (CA, 21 February 1996, unreported, Idoport v National Australia Bank & Ors [2007] NSWSC 23).
If you have any questions regarding gross sum costs orders, and quantification, please contact our team on (02) 9054 3180.
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