Legal Costs Adjudication

Court Order for Costs

Where a person is ordered by a court, tribunal or other body to pay, in whole or in part, legal costs of another, the person whose legal costs are to be paid must furnish a bill of costs to the person who is the subject of the order to pay. This must be in a form and manner consistent with terms of the order and also the terms of the Legal Services Act, and rules of court relating to bills of costs.

Where a person who has been ordered to pay cost receives a bill of costs prepared as above, that person, having attempted to agree the bill of costs may refer the bill for adjudication to the Legal Costs Adjudicator on any matter or item claimed in the bill of costs. Similarly, the person in whose favour the order for costs has been made may, having attempted to resolve a dispute regarding the bill of costs, may refer to the Chief Legal Costs Adjudicator to be adjudicated on.

Own Client Bill

Where a bill of costs is provided to a client by a legal practitioner, and the client considers that any matter or item charged is not properly chargeable, taking into account the provisions of the Act and rules of court relating to costs, the client may apply to the Legal Costs Adjudicator for adjudication on the bill of costs generally or any item in the bill of costs.

Where the practitioner provides a bill of costs to his client, which remains unpaid for 30 days from the date it is provided, the legal practitioner may apply to the Legal Costs Adjudicator for the bill of costs on any item to be adjudicated on. Similar provision applies in respect of a bill of costs delivered by a barrister to a solicitor.

An application to the Legal Costs Adjudicator may not be made more than 12 months after the date the bill of costs was provided to the client.

When the legal practitioner applies for adjudication above, he must indicate whether or not he or she is aware of any dispute regarding an item in the bill of costs and if so, the matter to which the dispute relates.

An application to the Adjudicator by a client may not be made more than six months after the date the bill of costs concerned was provided to the client or three months from the date of payment, whichever first occurs. This is provided that the bill of costs is in a form and is consistent with the Act, and with rules of court.

Where a bill of costs has been provided by a legal practitioner to his client and the legal practitioner has agreed to accept a lesser amount in discharge of the bill of costs, which is paid, neither the practitioner nor the client may make an application for adjudication on the bill of cost.

A legal practitioner, who has provided a bill of costs to his or her client, may apply ex parte to the High Court or to the Legal Costs Adjudicator for abridgement of the 30 days, where it appears that it is just to do so. The Court or Adjudicator may grant the abridgement of time.

Costs Principles

The general principles on legal cost apply to an adjudication by a Legal Costs Adjudicator. The Legal Costs Adjudicator is to have regard to the entire case and matter to which the adjudication relates and the context in which costs arise.

In particular, the Adjudicator shall verify that the matter or item represents work that was actually done, determine whether or not it was appropriate that a charge be made for the work concerned or the disbursement concerned, determine what a fair and reasonable charge for the work or would be and determine whether or not the cost relating to the matter or item concerned were reasonably incurred.

The Legal Costs Adjudicator is insofar as reasonably practicable, to ascertain, in relation to the work, including work to which a disbursement relates, the nature, extent and value of the work, who carried it on, and the time taken to carry it on.

In an application for adjudication, the Adjudicator is to have regard to an agreement between the practitioner and client, in relation to the matter concerned.

Procedure

The Legal Costs Adjudicator may inspect documents relating to the matter. Where there is an oral hearing, the Adjudicator may summon and examine witnesses and apply to the High Court for enforcement of summonses.

The Adjudicator may invite the parties to adjudication to refer the dispute to mediation or some other informal resolution process. He may do whether or not the parties have requested it. If the parties agree to refer the dispute to mediation or other ADR process, the Adjudicator is to adjourn the determination and may give other directions as appropriate to facilitate resolution of the dispute.  The Legal Costs Adjudicator shall adjourn the application to facilitate resolution.

An oral hearing for the purpose of adjudication shall be held in public, unless, in the interests of justice it ought to be held otherwise than in public. The Adjudicator may, with the consent of the parties, conduct an adjudication without an oral hearing where he is of the opinion that it is expedient and in the interests of justice to do so.

Determination

Having considered the application, the Adjudicator is to make a determination. The determination is to be given to the parties as soon as practicable. Subject to the legal costs principles, the Adjudicator may confirm items of costs if the charging in respect of the same is fair and reasonable and the amount charged is fair and reasonable in the circumstances. If parties find it not to be fair and reasonable, a different amount may be substituted.

An Adjudicator shall not confirm an amount for disbursement unless there is a valid voucher or receipt in respect of it or the parties have agreed, and the Legal Costs Adjudicator is satisfied, that a voucher or receipt is not required.

An Adjudicator shall not confirm a charge in respect of an item or matter that is not included in a legal cost notice or an agreement unless the Adjudicator is of the opinion that to disallow the matter would create an injustice between the parties.

If the Adjudicator is of the opinion that a party to the application has neglected or refused to provide documents, such as to be prejudicial to the interests of the others, the Adjudicator shall, in order to minimise prejudice, determine the application to the extent possible and determine that only a nominal amount is to be payable to the party who has neglected or refused to provide the required document.

Reports

The Costs Adjudicator, having made a determination, shall prepare a report where he or she considers it in the public interest and on request of any party to the adjudication, or on request of any party to the adjudication made within 14 days of the determination. The report is to set out the matters and items the subject of the adjudication, a brief outline of the background to the services and the principal issues.

It is to specify the work involved, the subject of the adjudication, which was considered in reaching the determination. It is to specify the various stages of the services and legal process at which work was carried out by reference to distinct aspects of the course of the work. It is to set out summaries of arguments made by the parties and give reasons for the determination.

Cost of Adjudication

A determination is to be final and shall take effect 20 days after being furnished to the party. Where it concerns only legal costs, as between practitioner and client, and the Legal Costs Adjudicator has determined that the aggregate of the amounts to be paid is less than 15% than the aggregate set out in the bill of costs, the party chargeable to those costs shall pay the costs of the adjudication.

Where the Adjudicator determines that the variation is more than 15%, more or lower in aggregate, the legal practitioner who issued the bill of costs shall be responsible for the costs of the adjudication. The costs of adjudication may be set off against the aggregate amount determined.

Reference to High Court

Whether or not requested by a party to the application, the Legal Costs Adjudicator may refer a question of law in the application to the High Court for its opinion. Where, a question arises as to the enforceability of an agreement relating to costs, the Legal Costs Adjudicator shall refer the agreement to the High Court to decide if, and to what extent, it is enforceable.

When a question arises as to its enforceability, and if he considers the agreement is enforceable, and the High Court if it considers the agreement is enforceable, shall make the order as it considers appropriate or if not enforceable, an order otherwise.

Where a question has been referred to the High Court, the Adjudicator may not make a determination on which the question is relevant while the reference is pending or proceed to make a determination, inconsistent with the opinion of the High Court.

Review

Where a party to adjudication is dissatisfied with the decisions of the Adjudicator not to charge or determine a different amount to be charged in respect of an item or matter within adjudication, he may apply to the Legal Costs Adjudicator for consideration of the decision and making of a determination in accordance with the below provision.

This review is to be in such form as is specified by rules of court. It is to specify by a list in a short and concise form, the matters with reference to which objection is taken and the reasons for the objection. It is to be made on notice to the other party.

The Legal Costs Adjudicator shall, if he considers it appropriate, on the application of the party entitled to the cost, issue an interim determination pending consideration of the application, in respect of the remainder of the matters to which no objection is taken and such other matters as are the subject of the application as the Legal Adjudicator considers relevant.

The above provisions apply in respect of reconsideration and review generally. Having considered the application, the Legal Costs Adjudicator may decide to make a new determination, or not to vary his or her determination. The function of the Legal Costs Adjudicator in relation to the review shall be performed by the Legal Costs Adjudicator who made the determination insofar as practicable.

A party to an adjudication who has made an application for review may, within 21 days after the Legal Costs Adjudicator has made his determination, apply to the High Court for a review of the determination. This is done by notice of motion to all other parties to the adjudication and to the Chief Legal Costs Adjudicator.

The court is to hear and determine the review on the basis of the evidence tendered to the Legal Costs Adjudicator unless the court orders that other evidence shall be submitted. The court, having heard the review may confirm the decision, allow the review, remit the matter for determination or substitute its own determination or remit the matter to the Adjudicator, in accordance with the decision of the court.

The High Court shall allow a review, only where satisfied that the Legal Costs Adjudicator has, in his or her determination, erred as to the amount of the allowance or disallowance so that the determination is unjust.

Documents and proceedings created or furnished in relation to legal cost adjudication are privileged except to the extent required for an appeal or on the determination of the Adjudicator and in relation to remediation or other procedure for the resolution of disputes as to the legal costs concerned. The Chief Legal Costs Adjudicator may specify forms of documents to be used for the purpose of the legislation.

Transitional

There are transitional arrangements in relation to the transfer of jurisdiction from Taxing-Masters to Legal Costs Adjudicator. The Taxing-Master may be appointed to perform the functions of Legal Costs Adjudicator for the remaining period of his office as Taxing-Master. The Taxing-Master will accordingly be treated as a Legal Costs Adjudicator.

After the legislation comes into force, a reference in any legislation to taxation of costs refers to a reference to the Office of the Legal Costs Adjudicator and reference to the Taxing-Master refers reference to each Chief Legal Costs Adjudicator and Legal Costs Adjudicator.

Court Order for Costs

A court may, on application by a party to civil proceedings, at any stage and from time to time during, the proceedings, order that a party to the proceedings pay the costs of or incidental to the proceedings or of one or more parties to the proceedings. Where proceedings before the State concern the estate of an individual, it may order the costs to be paid from the estate or trust.

An order may include an order that a party shall pay a part of another party’s costs, costs until a specified date, costs relating to one or more particular steps. Where a party is partially successful in proceedings, cost relating to the successful element or elements of the proceeding, interest on costs.

A party who is entirely successful in civil proceedings is entitled to an award of costs against a party who is not successful, unless the court orders otherwise, having regard to the particular nature and circumstances of the case and conduct of the party.

The court may have regard to the conduct of the parties, before enduring the proceedings, whether it was reasonable for a party to raise, pursue and contest one or more of issues in the proceedings, the manner in which parties conducted all or part of their case, whether a successful party exaggerated his or her claim, whether a party made a payment into court on the date of payment, whether a party made an offer to settle the subject of the proceedings, and if so, the date, terms and circumstances of that offer.

Where the parties were invited by the court to settle the claim, whether by mediation or otherwise, the court considers that one or more of the parties was or were unreasonable in refusing to engage in the settlement discussions or in mediation.

Where the court orders that a party who is entirely successful in civil proceedings is not entitled to an award of costs against the other party, who is not successful, it must give reasons for that order.

If a party succeeds against one or more parties to civil proceedings but not all of them, it may order, to the extent it considers proper in the circumstances, that the successful party shall pay all or costs of the party against whom he has not succeeded for the party or more than one of the parties against whom the successful party succeeded, pay not only the costs of the successful party but also the costs that the successful party was liable to above.

Unless the court before whom civil proceedings were commenced orders otherwise, all parties to proceedings or all parties agree otherwise, a party who discontinues or abandons proceedings after they are commenced is liable to pay the reasonable costs of every party who has incurred costs in the defence of civil proceedings concerned until discontinuance or abandonment.