2 major changes include the removal of the 3 current bases of taxation (being party-party, solicitor-client and indemnity) and the replacement with ‘standard basis’ (being all costs reasonably incurred and of reasonable amount) and ‘indemnity basis’; and the alteration of the Scale of Costs to a time charging basis of 6 minute units.
In terms of the time-value of the Scale of Costs, the following are the hourly rates for attendances by a legal practice (based on the 6 minute units):
- Item 1(a) attendance requiring legal skill or knowledge, $36 per 6 min, being $360 per hour.
- Item 1(b) attendance requiring legal skill or knowledge by an employee who is not a legal practitioner, $27 per 6 min, being $270 per hour.
- Item 1(c) attendance not requiring legal skill or knowledge capable of being performed by a clerk $21 per 6 min, being $210 per hour.
Where the attendances in the Scale of Costs are not based on folios or individual attendance charges, they are based on the timed charges above.
Counsel's fees are a maximum of $500 per hour and $5,000 per day for junior counsel, and $750 per hour and $7,500 per day for senior counsel.
The scale is expressed to be GST exclusive, so the above rates are the GST exclusive figures.
Explanatory note
Commencing on 1 April 2013 the Supreme Court (Chapter I New Scale of Costs and Other Costs Amendments) Rules 2012 introduce a new scale of costs for the Supreme Court and make significant amendments to aspects of the costs rules.
The new Rule 63.90 will provide that the Rules as amended
“apply to all things done or required to be done or omitted to be done on or after 1 April 2013 in or in relation to, any proceeding in the Court… regardless of the date of commencement of the proceeding”.The Court has also issued Practice Note No 1 of 2013 which includes a summary of the changes, an explanation of the process for applications for allowance of counsel fees in excess of scale, and the guideline figure for allowance for the reproduction of documents (22 cents per printed side of a page).
All lawyers practising in the Supreme Court civil jurisdiction should familiarise themselves with the changes.
In summary, the major changes to the Rules are
- The current bases for taxation will be replaced with the following:
i. standard basis- all costs reasonably incurred and of reasonable amount
ii. indemnity basis- (as now) all costs except in so far as they are of an unreasonable amount or have been unreasonably incurred.
- Interlocutory costs orders are not to be taxed until the completion of proceedings unless the Court orders otherwise.
- The parties’ costs in the proceeding, unless the Court orders otherwise, will include reserved costs, the cost of an interlocutory application if no order is made or the order is silent as to costs, and costs thrown away by reason of amendment to a pleading or of and occasioned by amendment to a pleading.
- Proceedings for debt or damages which do not recover amounts over $100,000 only attract County Court costs unless the Court orders otherwise.
The main changes to the Scale of Costs are:
- The scale is exclusive of GST
- The scale has been changed to allow a higher hourly rate for attendances charged in 6-minute units in line with most time recording systems currently used by law firms. The hourly rates actually charged by the individuals who performed the work will need to be included in the bill as well.
- The cost of photocopying is entirely discretionary in the scale. Guidelines for photocopying will be issued from time to time.
- The scale provides an allowance for solicitors to approve documents drawn by Counsel prior to filing and service.
- The scale provides for the leaving of messages by email or SMS or other means that are 20 words or less.
- The charges for letters include delivery by any means. No additional charge applies.
- The scale includes a charge to receive correspondence by any means and placing a copy of the letter on a file. This includes the printing of emails or facsimiles.
- The scale differentiates between perusal, scanning and examination of documents.
- Items 11, 12, and 13 of the scale include allowances for review and consideration, delegation and supervision, and research.
- The scale provides allowances for redaction and collation, pagination and indexing of documents.
- Item 17 of the scale includes an allowance of an additional amount having regard to the circumstances of the case.
- Fixed fees are provided in relation to Corporations short form bills. Additional costs in the way of reasonable disbursements can be allowed.
TipsPractice Note (No. 1 of 2013)
- An order for costs will by default mean reasonable 'costs' (standard basis) not the lower recovery test of 'necessary or proper' (party and party basis). Parties seeking orders on a different basis will require a specific order to that effect.
- An order for indemnity costs means on scale - so if the intention is to order that costs be taxed on the basis of the costs agreement in place between the party and their lawyers this will need to be articulated in the order.
- Parties who wish to recover interlocutory costs before the conclusion of proceedings will need to apply for a order that the costs be taxed forthwith.
- Amendments to pleadings will be costs in the proceeding unless the Court orders otherwise. If a party seeks costs 'thrown away' (i.e. wasted as a result of the amendment) or costs 'of and occasioned by' (i.e. future costs arising from the amendment) they need an order to this effect.
- Counsel must ask for an order if they are contending for costs to be recovered from the other party over and above the maximums in the scale ($7,500 for senior counsel and $5,000 for junior counsel). They can either seek an order for a specific sum, or an order that a figure above the maximum is appropriate with the quantum to be determined by the Costs Court on taxation.
The New Scale of Costs and Counsel fees
1. The Chief Justice has authorised the issue of the following practice note.
2. Significant changes have been introduced to the Supreme Court of Victoria scale of costs contained in Appendix A and to the provisions in Rule 63 of the Supreme Court (General Civil Procedure) Rules 2005 generally. The changes are effective from 1 April 2013 and apply to work undertaken after that date.
3. The basis of allowance of costs has changed to abolish the default “necessary or proper” test for party and party costs. The standard basis of costs that are “reasonable in amount and reasonably incurred” is now the usual basis for assessment or taxation of party and party costs. Indemnity costs may be allowed if the Court so orders.
4. The scale in its preamble allows the Judge, Associate Judge, Costs Judge, Judicial Registrar or costs registrar full discretion to allow any fee, cost or disbursement in full or in part or such other fee, costs or disbursement as is fair or reasonable to compensate for the work actually done.
5. Item 19 in the new scale now contains maxima fees for Counsel. Where costs are taxed pursuant to an order of the Supreme Court, Counsel’s fees in excess of scale cannot be allowed by the Costs Court unless the Supreme Court otherwise orders. Therefore where costs are sought pursuant to an order of the Supreme Court, and a party seeks sums for Counsel’s fees in excess of the maximums in the scale, an application will need to be made to the Supreme Court at the time a costs order is sought and an order made that Counsel’s fees in excess of the scale be allowed before they can be allowed on taxation by the Costs Court.
6. The Supreme Court may fix the rate or amount of Counsel’s fees above scale, or direct the Costs Court to allow the fees of Counsel in excess of scale when assessing or taxing the costs. In the latter case the Costs Judge, Judicial Registrar or Costs Registrar will fix the rate of charge in excess of the scale amount.
7. The Costs Court will only have a full discretion to allow fees in excess of the maximum in limited circumstances. For example, pursuant to a Notice of Discontinuance or arising from the acceptance of a formal Offer of Compromise, or taxation pursuant to the terms of a Release, or in reviews under the Legal Profession Act 2004 where the reviews are conducted in accordance with scale.
8. Additional changes have also been made including:
(a) The scale is exclusive of GST. This amendment allows legal practitioners who charge their clients on scale to add GST to the total sum to be charged.
(b) The scale has been changed to allow a higher hourly rate for attendances but now in 6-minute units in line with most time recording systems currently used by law firms. The hourly rates actually charged by the individuals who performed the work will need to be included in the bill as well.
(c) The cost of photocopying is entirely discretionary in the scale. Guidelines for photocopying will be issued from time to time. The guide is not intended to limit the discretion to allow higher or lower fees if it is considered appropriate. Guidelines appears at paragraph 11 below.
(d) The scale provides an allowance for solicitors to approve documents drawn by Counsel prior to filing and service.
(e) The scale provides for the leaving of messages by email or SMS or other means that are 20 words or less.
(f) The charges for letters include delivery by any means. No additional charge applies.
(g) The scale includes a charge to receive correspondence by any means and placing a copy of the letter on a file. This includes the printing of emails or facsimiles.
(h) The scale differentiates between perusal, scanning and examination of documents.
(i) Items 11, 12, and 13 of the scale include allowances for review and consideration, delegation and supervision, and research. Applications to the Costs Court for allowances for these items will need to be supported by file notes or other means. The Costs Court has a full discretion to make allowances for claims made pursuant to these items depending on the proof produced and the particular claims made for perusal, scanning and examination in the bill of costs.
(j) Any claim made for research will not be allowed unless the research involves a legal question of some complexity that is not procedural in nature.
(k) The scale provides allowances for redaction and collation, pagination and indexing of documents. These allowances are for the time taken to complete each task that is reasonable in the circumstances.
(l) Item 17 of the scale includes an allowance of an additional amount having regard to the circumstances of the case. Rule 63 provides that bills of costs are to be prepared on an itemised and chronological basis without differentiation between instructions for brief or preparation for trial work and any other work.
(m) Fixed fees are provided in relation to Corporations short form bills. Additional costs in the way of reasonable disbursements can be allowed.10. Appendix B of the scale includes allowances for Witness Expenses and interpreters’ fees. An additional fee or higher fees may be allowed if the Court makes an order for a higher rate.
11. Guide to reproduction of documents
The scale of costs allows a discretion in relation to copy documents. The new scale provides at item 4 that reproduction by photocopy or other machine made copy including hard copies of electronic documents shall be at the discretion of the Costs Court.
As a guide, the Costs Court will allow reproduction as follows:
Reproduction—
for each printed side of a pageIf printed out of the office, the amount charged by the service provider should be claimed as a disbursement and will be allowed if reasonable.
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