Costs Assessment Appeals

We acted for Aon Risk Services Australia Limited (‘Aon’) and successfully defended a District Court appeal, judicial review proceedings in the NSW Court of Appeal and a special leave application to the High Court involving an application under section 384 of the Legal Profession Act 2004 (NSW) (‘LPA’).

The applicants appealed to the District Court against the determination of a Costs Review Panel in respect of assessing the applicants’ costs payable in earlier substantive proceeding. The primary judge dismissed this appeal and affirmed the panel’s findings.

In subsequent judicial review proceedings before the Court of Appeal, two key issues arose. The first issue was whether there was jurisdictional error or an error of law in the primary judge’s finding that the panel provided adequate reasons in its determination. The second issue was whether the primary judge erred in finding that the panel gave adequate reasons for its determination of the costs incurred by the applicants in the assessment process.

The Court of Appeal upheld the District Court’s jurisdiction to determine, as a question of law, whether the reasons provided by the review panel were adequate. It found that the legal principles identified by the primary judge were relevant and applied properly when determining whether the panel’s findings were fair and reasonable. Further, the Court found that the summons, the primary judge’s reasons and order, and the review panel’s certificate of determination were part of the ‘record’.

Addressing the second issue, the Court of Appeal found that the panel was not required to determine the fair and reasonable sum of the applicants’ costs of the assessment process because they were ‘costs of a costs assessment’ pursuant to section 369 of the LPA. It also upheld the primary judge’s finding that the review panel was entitled to take a ‘global approach’ and calculate a lump sum amount of those costs incurred by the applicants without regard to the individual items in the applicants’ costs bill.

The Court dismissed the Summons filed by the applicants with costs - Ahern v Aon Risk Services Australia Ltd [2021] NSWCA 166.

Aon successfully applied for a specified gross sum costs order under s 98(4)(c) of the Civil Procedure Act 2005 (NSW). The Court of Appeal noted at [15] that the main purpose of a specified gross sum costs order is to avoid the ‘expense, delay and aggravation’ associated with a contested costs assessment process. It also considered that such an order should only be made when it is fair between the parties and an accurate sum can be determined from the materials before the Court. The applicants were ordered to pay Aon’s costs of the Summons and Aon’s Notice of Motion by way of a specified sum - Ahern v Aon Risk Services Australia Ltd (No 2) [2022] NSWCA 39.

Copies of the NSW Court of Appeal decisions can be found here:

https://www.caselaw.nsw.gov.au/decision/17b14c125d0b4e58caa1bc38 (2021 decision)

https://www.caselaw.nsw.gov.au/decision/17f94de6d904f6d35bd4f510 (2022 decision)

A special leave application to the High Court by the applicants was refused.