Key Points

• Commencement of the Legal Profession Uniform Law (LPUL)
• The LPUL and special costs orders formerly made under section 280(2) of the LPA; and
• Recent decisions about special costs orders made under the LPUL.

The Legal Profession Uniform Law (LPUL) commenced in Western Australia on 1 July 2022 which caused some fundamental practical and legal changes for the legal profession and their clients in Western Australia regarding legal costs.

Recent decisions about legal costs demonstrate that the LPUL did not alter the test litigants must meet to obtain special costs orders allowing their legal costs to be fixed or assessed without regard to the limits imposed by the applicable Legal Profession Costs Determination (Scale).

Under section 280(2) of the Legal Profession Act 2008 (LPA) a party could apply for an order that because of the unusual difficulty, complexity or importance of the matter:

1. a party’s legal costs be fixed at an amount higher than the Scale;
2. a party’s legal costs be fixed at higher limits than those allowed under the Scale; and
3. limits on costs under the Scale be removed for the purpose of a costs assessment.

The equivalent of section 280(2) of the LPA is section 141(3) of the LPUL which is in identical terms to section 280(2) of the LPA.

For a Court to make a special costs order under section 141(3) of the LPUL the Court must be satisfied that:

1. the costs allowable under the Scale are inadequate to cover the litigant’s costs incurred in the litigation and it must be: “fairly arguable that the bill of costs may tax out at an amount which is greater than the scale limit”; and
2. the inadequacy of the Scale limit arises because of the:

• unusual difficulty;
• complexity; or
• importance of the matter,

City of Bayswater v Viva Energy Australia Pty Ltd [2022] WASC 384(5), [25], [28] (City of Bayswater); BB v Helena College Council Inc t/as Helena College [No 2] [2022] WADC 81 (Helena College), [48].

In City of Bayswater the Court stated that:

1. section 141(3) of the LPUL is: “protective of the successful party in litigation, and serves the administration of justice, by facilitating, within the limits imposed by the statutory criteria, the operation of the general principle that a successful party is entitled to its costs of the litigation”: [27]; and
2. it remains the task of the taxing officer under section 141(3) to assess the reasonableness and necessity for work undertaken and claimed by the party and to: “make a judgment about the remuneration reasonably required”; [27].

The term “unusual” under section 141(3) of the LPUL qualifies only the “difficulty” of the matter, and not the “complexity” or “importance” of it. That “difficulty” is tested having regard to the “usual run of civil cases”: Helena Collage, [48]; Ryan v Zekas [2020] WASC 124(S), [18].

The test of “importance” allows the Court to have regard to the significance of issues in the proceedings to the parties, other prospective parties, the public and the community: Ryan v Zekas [2020] WASC 124(S), [19].

To satisfy the “inadequacy test” under section 141(3) of the LPUL, the party seeking the special costs order must file Affidavit evidence sufficient to show that the amount allowed under the Scale is inadequate. That evidence should include evidence of the party’s time spent on tasks and the party’s actual legal costs incurred; City of Bayswater, [33].

In the City of Bayswater the Court found that the matter was “complex” and “important” because:

1. of the Plaintiff’s conduct in the proceedings including putting on inadmissible Affidavit evidence: [40];
2. of the issues in dispute in the proceedings the complexity of which was apparent from the pleadings: [41];
3. the matters in issue concerned events which occurred over 20 years ago: [42]; and
4. the volume of material filed, the evidence, submissions and the Plaintiff’s irrelevant material and the importance of discovery to the disposition of the proceedings: [45],

which warranted a special costs order in the successful Defendant's favour.

In Power and Water Corporation v Eni Australia B.V [2022] WASC 376 (S) (Power and Water Corporation) the Court considered whether an allowance under section 141(3) should be made for attendance of:

1. 2 counsel; and
2. an instructing practitioner,

at the hearing of an interlocutory application warranting an order that the Defendant’s costs should be taxed without reference to item 10 in the Supreme Court Scale.

The Court accepted that there was a degree of complexity and that the matter was important justifying resources of a greater degree than a usual interlocutory application: [18].

However, the Defendant did not lead any evidence about the costs it actually incurred which prompted the Court to state that the: “Court should not fall into the trap of making an estimate of the time which it considers would have been spent on tasks, when the court does not have all information before it to make that judgment”: [19].

Despite there being no evidence before the Court about the Defendant’s actual costs incurred in the interlocutory application, the Court made a special costs order increasing the amounts allowed under the Scale:

1. for the reasonable time spent in preparing affidavits;
2. for the attendance of a senior practitioner at the hearing;
3. for up to 4 days preparation by counsel, instead of 2 days;
4. for the attendance of 2 counsel at the hearing of the application; and
5. with an uplift of 50% on the hourly and daily rate of senior counsel,

at [25].

In Zuleika Gold Ltd formerly known as Dampier Gold Ltd v Vango Mining Ltd [2022] WASC 357 (S) the Plaintiff applied to remove the hourly limits under the Supreme Court Scale for Items 4 (reply), 7 (discovery), 19 (preparation of case) and 22(a) (trial).

The Court was satisfied that:

1. the limits imposed by items 4, 7, 19 and 22(a) of the Supreme Court Scale were inadequate and: “would prevent the plaintiff from putting a reasonable arguable case to the taxing officer on the costs that ought to be awarded in a taxation” of each of those items, [57];
2. despite the liability issues in the proceedings not raising any difficult or complex questions of law, the voluminous number of documents that required the parties and the Court’s consideration made the matter factually complex; [60], [61];
3. the case was not a simple breach of contract and repudiation case, the “factual findings of breach and repudiation” extended “over 100 pages”; [63];
4. the matter was important because it involved 2 ASX listed companies, the refurbishment and development of an underground gold mine and the right of the Plaintiff to earn interest on the tenement; [64]; and
5. the matter required both the attendance of senior and junior counsel at trial; [65].

Despite what appears to be a generous disposition in Power and Water Corporation, litigants applying for special costs orders under section 141(3) of the LPUL should ensure that they put adequate Affidavit evidence before the Court about the tasks completed and the actual legal costs incurred in the conduct of the legal proceedings to properly allow the Court to assess whether a special costs order should be made under section 141(3) of the LPA.

Another issue that might arise when the Court is making a costs order is whether legal proceedings were commenced before 1 July 2022 and whether an application for a special costs order should be made under section 280(2) of the LPA or section 141(3) of the LPUL.

In Helena College the Court in assessing whether a special costs order should be made noted at [47] that it did not need to determine whether section 280(2) of the LPA or section 141(3) of the LPUL applied because section 141(3): “is in identical terms and the decision would be the same under either regime”, therefore, avoiding the question about the source of the Court’s jurisdiction to make the relevant costs order.

Dentons has the legal costs knowledge, skill and unrivalled capacity to advise about and represent litigants at any stage in Court proceedings or costs disputes, including independent post trial legal costs arguments and advice about and representation in assessments of legal costs after final costs orders are made.

We are ready and available to assist including by taking instructions from existing legal representatives in costs matters from a position of independence, knowledge and experience.