Are Any of my Legal Costs Paid by The Other Side?

Are any of my Legal Costs (fees and outlays) Paid for by the Other Side?

There is complicated legislation and numerous legal rules that apply to the recovery of costs.

In some situations, legislation prevents recovery of any costs from the other side. In other cases, legislation limits the recovery of costs.

We will always seek costs where the rules allow.

Recovery of Costs in a Motor Vehicle Claim and a Public Liability Claim

Once your claim progresses to a Compulsory Conference (Stage 1) or a Pre-trial Mediation (Stage 2) recovering costs from the other side becomes relevant.

If your matter is settled and your settlement is more than approximately $83,000* legislation applies to ensure that standard costs are paid by the insurer. This usually means you will recover around half of your total fees and outlays (total legal costs).

If your matter progresses through to a court hearing and you win the case, you will usually get an order from the court, that the other side/insurer pays your standard costs.

However, IF after commencing proceedings in court, you have served an offer to settle on the other side, and the matter goes to a court hearing and the Judge makes an order that is equal to or more than your offer, you will recover standard costs up to the date of the offer, and indemnity costs from the date of the offer through to the completion of the matter (which could be the date of the judgement or the date of the settlement prior to the court hearing).

(*This amount can vary slightly depending on the date of your accident.)

Recovery of Costs in a Workers Compensation Claim

In a workers’ compensation claim, because of rules and legislation, it is rare to recover any costs from the other side.

However, if your matter is not settled at the Compulsory Conference (Stage 1), Mandatory Final Offers (MFO’s) must be exchanged.

IF the matter then progresses through to a court hearing and the judge awards an amount equal to or more than your Mandatory Final Offer (MFO), you are entitled to standard costs from the date of the MFO through to the conclusion of the hearing. For example, if costs (fees and outlays) incurred between the Compulsory Conference through to the end of the court hearing are $100,000, you would expect to recover approximately half ($50,000).

This is generally the only situation in which you are entitled to recover any costs from Workcover.

If your matter is settled before any court proceedings are commenced, legislation prevents you from recovering any costs from the other side.

What are Indemnity Costs and Standard Costs?

Indemnity costs (also described as Solicitor own client costs) are the total fees and outlays in your claim.

Standard costs (also described as party and party costs) are a lot less than indemnity costs (also described as solicitor own client costs). Standard costs usually work out to be roughly 50% of your indemnity costs/solicitor own client costs.

Indemnity and standard costs can be explained as in similar terms to seeing a doctor where there is a medicare rebate and a gap payment.

Standard costs are like the medicare rebate (worked out by a court scale and determined by legislation, rules and regulations and usually calculated by a Costs Assessor.) 

Indemnity Costs (Solicitor own client costs) are ‘the gap’ payment. This is the amount the Doctor charges above the Medicare rebate or in this case, above the court scale.

There is great variation in how law firms charge. Lawyers have different hourly rates and take different amounts of time to do things. Some add extra fees such as an ‘uplift fee’ or a ‘care and consideration’ fee. Some charge fixed fees or a percentage of your settlement.

At OSheaDyer, we record our time and charge based on hourly rates. We don’t add anything extra.

We aim to be efficient and to do things that will solidly progress your claim.

We are committed to our clients receiving as much of their Settlement money as possible.