Costs

See Fair Work Act ss. 375B, 376, 570 and 611

Persons who incur legal costs in a general protections matter before the Fair Work Commission or a court generally pay their own costs.[1]

The Commission or a court has the discretion to order one party to a general protections matter to pay the other party’s legal or representational costs, but only where the Commission is satisfied the matter was commenced or responded to:

• vexatiously or without reasonable cause, or
• with no reasonable prospect of success.[2]

Costs may also be awarded to one party if the Commission or the Court is satisfied that the costs were incurred as a result of an unreasonable act or omission of the other party (but in the case of the Commission only for dismissals taking effect from 1 January 2014, when s.375B commenced).[3]

Costs may also be ordered against legal representatives.[4]

Costs are the amounts a party has paid to a lawyer or paid agent for advice and representation before a court or tribunal.

If a party is ordered to pay another party’s legal costs it will not usually be for the whole amount of legal costs incurred.

The Commission may order that only a proportion of the costs be paid. This may be either on a party-party basis or on an indemnity basis.

Party‒party costs

Party‒party costs are the legal costs that are deemed necessary and reasonable.[5]

The Commission will look at whether the legal work done was necessary and will decide what a fair and reasonable amount is for that work.[6]

Indemnity costs

Indemnity costs are also known as solicitor‒client costs.

Indemnity costs are all costs including fees, charges, disbursements, expenses and remuneration as long as they have not been unreasonably incurred.[7]

Indemnity costs cover a larger proportion of the legal costs than party-party costs.

They may be ordered when there has been an element of misconduct or delinquency on the part of the party being ordered to pay costs.380F[8]

An application for costs before the Commission must be made within 14 days after the Commission finishes dealing with the dispute.[9]

What costs may be recovered?

The Fair Work Regulations include a ‘schedule of costs’ which sets out appropriate rates for common legal services. The schedule provides the Commission with guidance when exercising its jurisdiction to make an order for costs.[10]

The Commission is not limited to the items in the schedule of costs, but cannot exceed the rates or amounts in the schedule if an item is relevant to the matter.[11]