Blackstone Brief

Blackstone Brief Volume 14

Blackstone Brief Volume 14

BStone Admin - 16 Sep 2019

Perspectives on a Taxation of Costs in the Federal Court of Australia 2019

In this month’s Blackstone Brief one of our senior associates, Romaine Abraham, takes a close look at the perspectives on a taxation of costs in the Federal Court of Australia in 2019.

It is relatively rare for costs disputes between parties in the Federal Court of Australia to end up being taxed. Estimates now issued by Registrars as to what proportion of costs disputed by parties will be allowed have ensured that far fewer matters reach taxation. Matters do, occasionally, reach a full taxation and, having appeared in a taxation of costs listed in the Federal Court over 25 days this year, I am uniquely placed to share information about how the Court is currently interpreting the Federal Court Scale of Costs.

Legislative penalties disincentivise parties from proceeding with a taxation of costs in the Federal Court, ensuring that fully contested taxations are the exception, not the rule. Before a Bill of Costs can be taxed, rule 40.20 of the Federal Court Rules 2011 (the Rules) requires a taxing officer to make an estimate of the approximate total amount for which a certificate of taxation would likely be issued. If the party which filed the bill and is seeking to recover its costs files an objection to the estimate under rule 40.21 , it must pay the costs of taxation of all parties unless the costs are taxed at more than 115 percent of the taxing officer’s estimate. If the party liable for costs files the objection, it must bear the costs of taxation unless costs are taxed at less than 85 percent of the taxing officer’s estimate.

Costs as between party and party in the Federal Court are defined in the Rules as costs. The Scale of Costs, found in Schedule 3 of the Rules, is used to quantify the amount payable. Here are some insights into how the Scale is currently interpreted.

Multiple fee earners

A claim for multiple fee earners to attend at hearings and conferences is generally disallowed in inter partes costs assessments conducted in the New South Wales, Queensland and Victorian state courts, particularly in the absence of an order that costs be paid on an indemnity basis. In the Federal Court, matters of sufficient complexity give merit to the argument that the costs of having multiple solicitors attend conferences, for example with counsel, are incurred fairly and reasonably in the conduct of the litigation. This has important significance for large commercial disputes where teams of lawyers now routinely work together to ‘divide and conquer’ large swathes of evidence.

Delegation and supervision

As a corollary to this, it is clear that the Federal Court Scale of Costs makes provision for delegation and supervision when it is considered appropriate for more than one lawyer to be involved in the conduct of a matter – see scale item 4 Delegation and Supervision. To ensure clarity, any attendance claimed under this category should clearly be marked as being claimed in accordance with scale item 4, rather than simply marked as being claimed in accordance with scale item 1, and provide a taxing officer with sufficient information to understand the nature of the attendance claimed.


In relation to reading, a subsequent attendance can be claimed to review a document in addition to the first attendance to read that document on its receipt. Such attendances will be considered and allowed on a case-by-case basis and in the context of the duration and complexity of the substantive proceedings. There are certain limitations on such multiple reviews of the same document, as noted below when preparing documents.

Again, this differs from the manner in which inter partes costs are allowed on assessment in New South Wales, Queensland, and Victoria, where only nominal attendances are permitted to review documents previously read, as part of a review of the file in its totality and typically in preparation for the hearing.

Occasionally, a claim may be made to read an email in one item and read the annexures to that email in a second item. However, simple emails attaching more detailed documents, such as correspondence, are considered to have been read at the same time as the documents being forwarded. While this appears to be a minor point to concede, this type of claim can increase the total amount claimed by a significant amount. Any nominal attendance to read a covering email should not be claimed as a separate attendance, as these costs will most likely be disallowed on taxation.

Preparing documents

Similarly, separate claims for outgoing emails that simply attach documents, in addition to claims for preparation of the attachments, are typically disallowed as having been incorrectly claimed under scale item 2. Scale item 20.3 states:

‘the charge for preparing documents (item 2) is inclusive of typing, printing, posting, faxing and emailing, and any other administrative task relating to the preparation or transmission of a document, by whatever means. There is to be no charge for such administrative tasks.’

Furthermore, attendances claimed to review material for the purpose of preparing documents, such as in preparation for drawing a Statement of Claim or Defence, are generally disallowed. Such attendances are considered misapplication of the scale, leading to duplication of the initial attendance to peruse such documents on their receipt. Associated attendances undertaken in connection with preparing documents is arguably captured in the various rates allowed at scale item 2.

The preparation of some documents which might otherwise have been considered merely internal management aids, such as file notes, are now routinely being allowed on a party-and-party basis, particularly in complex matters, when such documents assist a party in conducting the litigation more efficiently. If in doubt as to whether the preparation of an internal document can reasonably be claimed, I would advise including claims for preparation of such documents within your Bill of Costs, as such costs are likely to be allowed where their preparation has a bearing on the efficient conduct of the matter.

Important tips to remember

Maintaining accurate time-recording practices, such as noting the start and end times of attendances on file notes, greatly assists a party in substantiating costs claimed within their Bill of Costs and will facilitate a higher recovery of costs on taxation or costs assessment regardless of the jurisdiction in which the costs dispute arises.

Importantly, parties should review any adverse costs orders prior to final orders being made, as final orders can sometimes overturn earlier orders. Parties should make every effort to ensure that contentious categories of costs are either expressly carved out or expressly included, with relevant justification, to guarantee that costs recovery is appropriate and maximised.

Ultimately, parties should have regard to the overarching purpose of the civil practice and procedure provisions, be realistic about the manner in which costs are claimed as between party and party and avoid misuse or misapplication of the Federal Court Scale of Costs.

At Blackstone Legal Costing we guide you through the labyrinth that is cost law to achieve optimum recovery for both you and your clients.

Romaine Abraham

An experienced senior associate at Blackstone Legal Costing, Romaine commenced work with us in our Melbourne office and is now based in our Sydney office. Her experience ranges across New South Wales, Victoria and Queensland, focussing her skills on obtaining the best commercial results for clients

Back to Blackstone Brief