Many times, we advise clients who come to us in the hope of appealing costs orders made against them in a court or a tribunal whilst they were represented by other lawyers.

It is imperative that you as a client, be well aware that success in appeals in relation to costs orders is not a simple proposition.

Costs in court usually ‘follow the event’, which means that when a party wins, the costs order is made in their favour.

Hence if a defendant defends the case against them successfully, costs usually ‘follow the event’ and the court makes a costs order in favour of the winning defendant and against the plaintiff.

When there are multiple parties, for example several plaintiffs and or several defendants, the courts can make orders for one of the parties to pay the other parties’ costs, especially if that one party is ‘the cause of the costs order being made’.

Think of it this way: if it weren’t for that losing party, people wouldn’t be in court!

Hence in many cases, the party that has effectively caused others to spend money on lawyers, will usually be ordered to pay the costs.

This brings us to other kinds of costs orders, including those which don’t necessarily ‘follow the event’.

You may be ordered to pay costs, even if you win sometimes. This can happen if, say, your win is a ‘hollow victory’. For example, if you bring a claim for $500,000 and you end-up winning $50,000 only, the likelihood that you’ll be held responsible for at least some of the costs of the other side is quite high.

Costs can be ‘ordinary’ or ‘indemnity’. Ordinary costs are those where you pay roughly 60%-70% of the costs of the other side.

Indemnity costs usually have you paying between 75%-100% of the costs of the other side (it should be noted that rarely do people pay all the costs).

We should point out that these same regimes apply in various courts and tribunals.

Now, costs orders are also ‘discretionary’, which means that the court ‘exercises’ its discretion, or power or ability to make a particular costs order, in order to make the order. Put it another way, strictly speaking, a court or tribunal doesn’t have to make a costs order.

For example, the court may consider that the way that a person, even if successful, conducted a hearing or the proceedings as a whole, means that they should pay the costs of the other side. If say, they ran the proceedings in a way which caused some kind of prejudice to the other side, or if they wasted a lot of time, or if they made things more complicated than they needed to be, the court or the tribunal may ‘exercise its discretion’ to order costs against them (a typical example is when a costs order is made against you because of the disproportion of the legal costs as to the quantum of your claim).

This issue of ‘discretion’ makes appeals as to costs very difficult.

For example, supposing that a tribunal has made a costs orders against you because the matter you brought was made overly complicated by the unusual orders which you sought, or by the amount of material which you served (for example serving a 1700-page affidavit including exhibits for a relatively simple matter), then in those circumstances, that court or tribunal has a ‘discretion’ to make a costs order against you.

Any successful appeal as to costs, must show an error of some kind (error of law) in the exercise of that discretion.

In other words, the discretionary aspect of costs orders, means that any appeals should show a very ‘in your face error’. For example, in some criminal or administrative proceedings, you need to show that the court or tribunal clearly didn’t follow the dictates of a law, legislation or regulation, ignoring certain provisions about how and when costs orders ought to be made.

Or you will need to show that the court or tribunal completely ignored a material fact or issue which it needed to consider, or considered something which it ought not to have considered.

In effect you need to show that the court or tribunal’s ‘discretion to make costs orders miscarried’.

These kinds of errors are called ‘House & King’ type errors, after the High Court case House v The King (1936) 55 CLR 499.

As we have explained on these pages before, we examine each potential costs appeal on its own merits to see if we can find a House & King type error—we want to ensure that such an appeal has legs to stand on and can be brought with the confidence that there is an arguable case – a case which has reasonable prospects of success.

We put much effort analysing all the aspect of any appeal, because as you will have gathered by now, the consequences of losing an appeal, or even winning a ‘hollow victory’ on an appeal, could be very severe indeed for our clients, i.e. in terms of costs (not just our costs, but the other side’s costs).

As iterated on these pages, costs in higher courts can amount to hundreds of thousands of dollars on your case alone, and so it is always extremely important to ensure that an appeal is calculated to obtain the maximum benefit possible, and unless it can at least be reasonably shown that an appeal has good prospects, it should always be the absolute last resort.

At Papallo Kouchoo Lawyers we ensure to advise you fully on many potential traps and problems in relation to appeals and specifically in respect of the particular circumstances of your particular appeal.

If you have any questions, please do not hesitate to contact us for an obligation free professional consultation.