What are costs?

Costs are the amounts a party has paid to a lawyer or paid agent for advice and representation in a matter before a court or tribunal, including their fees and disbursements (out-of-pocket expenses).

Legal costs may be ordered to be paid on either a party-party basis or an indemnity basis:

Party‒party costs are the legal costs that are deemed necessary and reasonable. The Commission will look at whether the legal work done was necessary and will decide what a fair and reasonable amount is for that work. These are also known as ordinary costs.

Indemnity costs are also known as solicitor‒client costs.

Indemnity costs are all costs including fees, charges, disbursements, expenses and remuneration, as long as they have not been unreasonably incurred.[263]

Indemnity costs cover a larger proportion of the legal costs than party-party costs.

Indemnity costs may be ordered when there has been an element of misconduct or delinquency on the part of the party being ordered to pay costs.[264]

The Fair Work Regulations include a ‘schedule of costs’ which sets out appropriate rates for common legal services. The schedule provides the Commission with guidance when exercising its jurisdiction to make an order for costs.[265]

The Commission is not limited to the items in the schedule of costs but cannot exceed the rates or amounts in the schedule if an item is relevant to the matter.[266]