Protection on costs

A recent change to the law in Victoria may be to the advantage of plaintiffs in that State.

On 29 May 2018 the Justice Legislation Amendment (Access to Justice) Act 2018 received royal assent. The Act amends the Civil Procedure Act to clarify the courts’ power to make protective costs orders by fixing the costs of a proceeding in advance. Section 65C of the Civil Procedure Act now says (with the amendments marked in red) –

(1) In addition to any other power a court may have in relation to costs, a court may make any order as to costs it considers appropriate to further the overarching purpose.

(2) Without limiting subsection (1), the order may—

(a) make different awards of costs in relation to different parts of a proceeding or up to or from a specified stage of the proceeding;
(b) order that parties bear costs as specified proportions of costs;
(c) award a party costs in a specified sum or amount;
(d) fix or cap recoverable costs in advance.

(2A) In making an order under subsection (1) to fix or cap recoverable costs in advance, the court may consider the following matters—

(a) the timing of the application;
(b) the complexity of the factual or legal issues raised in the proceeding;
(c) whether the party seeking the order claims damages or other form of financial compensation;
(d) whether the claim of the party seeking the order has a proper basis and is not frivolous or vexatious;
(e) the undesirability of the party seeking the order abandoning the proceeding if the order is not made;
(f) whether there is a public interest element to the proceeding;
(g) the costs likely to be incurred by the parties;
(h) whether the other party has been uncooperative or delayed the proceeding;
(i) the ability of the party seeking the order to pay costs;
(j) whether a significant number of members of the public may be affected by the outcome of the proceeding;
(k) whether the claim of the party seeking the order raises significant issues as to the interpretation and application of statutory provisions.

(3) An order under subsection (1) may be made—

(a) at any time in a proceeding;
(b) in relation to any aspect of a proceeding, including, but not limited to, any interlocutory proceeding.

Personal injury plaintiffs tend to be impecunious and an adverse costs order can be catastrophic.    However, their cases often raise legal issues that need to be aired.  A protective costs order can go a long way to ensuring that cases with merit are heard.