Importance of recovering legal costs
Whether you are a homeowner, builder, a business or a consumer, and you are considering taking your building or construction dispute to the NSW Civil and Administrative Tribunal (NCAT), it is essential to consider the ability to recovery of your legal costs from the other party, if you are successful.
The purpose of the costs order is to compensate you for the legal costs and expenses you have incurred in taking your dispute to the NCAT, as the successful party. The costs order can then be enforced against the other side to recover your costs.
Can you recover your legal costs in the NCAT?
In this article, we will examine instances which enable you to apply for a costs order at NCAT, in order to recover your costs. These include:
- Matters in NCAT’s Consumer and Commercial division, where the cost in dispute is over $30,000; and
- When NCAT is satisfied that there are ‘special circumstances’ to warrant the order for costs to be made.
For building and construction disputes, where the amount in dispute is over $30,000, which is commonly the case, you may generally apply for a costs order.
Whether a costs order is granted is at the discretion of the NCAT.
(1) Matters in NCAT’s Consumer and Commercial Division
The Consumer and Commercial division resolves a range of disputes in:
- Housing and property, including home building, and
- Consumers and businesses.
For matters in NCAT’s Consumer and Commercial division, where the cost in dispute is over $30,000, the NCAT may make an order for costs under Rule 38(b) of the Civil and Administrative Tribunal Rules 2014 (the NCAT Rules).
This applies to most disputes we act for, involving homeowners and builders, under the Home Building Act 1989 (NSW), where NCAT has the discretion to make a costs order in your favour, in the event that you are successful.
(2) Special circumstances
There are some other circumstances where a party can apply for a costs order, and this includes where there are ‘special circumstances’ to warrant an order of costs to be made. These include:
(a) whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings,
(b) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings,
(c) the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law,
(d) the nature and complexity of the proceedings, and
(e) whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance.
An experienced legal practitioner can give you advice on whether these factors may apply and whether there is merit to applying for a costs order in the NCAT.
Enforcement of costs orders
Where a costs order is made, the order can be enforced against the other side, to recover your legal costs. If the parties cannot agree on the costs, the costs are quantified through the cost’s assessment process at the Supreme Court and referred to a Costs Assessor. This process may take 3-6 months. The Costs Assessor then makes a determination, which may be registered as a judgment debt, and enforced against the other side.
An experienced law firm, in the area of debt recovery, will be able to act on your behalf and enforce your costs order.
For matters in NCAT’s Consumer and Commercial division, where the cost in dispute is over $30,000, you may apply for a costs order. This commonly applies to disputes under the Home Building Act, such as between homeowners and builders.
Where an order for costs is made, the purpose compensate you for the expenses you have incurred, as the successful party. An order for costs is always at the discretion of the NCAT.
We, at CCS Legal, are here to assist you in advising you on the prospects of the recovery of your legal costs, and we regularly act for clients in the NCAT. Further, we are also experienced in enforcing your costs order, against the other side, to ensure that you have the best prospects of getting paid.
Please feel free to contact one of our partners for assistance.