Assessment in relation to the costs incurred in a family law matter may be undertaken either:
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as a result of a challenge against an account rendered by the solicitor to the client (solicitor/client costs); or
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as a result of a costs order being awarded against a party in the proceedings if the parties are unable to reach an agreement in relation to the quantum of the costs order (party/party costs).
There are two separate costs orders that may be made in the Federal Circuit Court and the Family Court (of Australia or Western Australia) in relation to party/party costs. They are:
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costs on an indemnity basis. This means that the costs to be assessed may be charged in accordance with the costs agreement entered into between the client and solicitor; and
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costs as agreed or assessed. This means that the costs are to be assessed in accordance with the Family Law Rules 2004 or Federal Circuit Court Rules 2001 and the Schedules included in those Rules.
If an order for costs on an “agreed or assessed” basis is awarded, the parties are, after preparing a bill of costs, able to agree on the quantum to be paid. If no agreement is reached, the bill of costs will be required to be assessed.
Costs in proceedings commenced prior to 30 June 2008, or in respect of costs agreements entered into before that date, are to be assessed in accordance with Sch 6 of the Family Law Rules which includes lawyer/client costs, party/party costs and provisions with respect to disputing an account.
Costs in proceedings commenced in respect of a fresh application, under a new agreement between the lawyer and the client, or a new retainer entered into by a client in the client’s case after 1 July 2008 are to be assessed in accordance with Ch 19 of the Family Law Rules 2004, which deals only with party/party costs.
Lawyer/client costs in respect of an account after 30 June 2008 are assessed in accordance with the relevant state legislation, and governed by provisions in the state court’s Rules. See Solicitor/client costs and costs agreements.