Chief Justice's Review of the Costs Assessment Scheme

 The report of the Chief Justice‘s review of the costs assessment scheme heralds the most significant changes to the New South Wales system since its inception in 1993.

In the review, Chief Justice Tom Bathurst submits that a more robust approach to the assessment of costs is required, albeit “at the cost of precision and perfection in the process”, and that accordingly, the system should promote the early resolution of cost disputes by removing incentives to delay, instead “providing incentives for early resolution, even at a discount”.

This most thorough review, the report totalling 110 pages, makes a number of recommendations for reform of the costs assessment process, many of which require legislative change. The recommendations seek to enhance the current system to ensure a cheap, simple, just and consistent system in which parties will receive procedural fairness.

Below is a brief summary of some of the major changes proposed to the current assessment system:

• The Manager of Cost Assessment (“MCA”), following the exchange of objections and responses within the relevant time limitations, will issue an interim certificate for any amount of costs not in dispute. This certificate is issued without prejudice to the final assessed amount.
• On a contested assessment, once the matter is referred to a costs assessor, and after a conference between the assessor and the parties to clarify issues in dispute, the assessor must make an “early assessment” of the amount of costs likely to be allowed. Any objection to the early assessment, which would lead the matter to a full assessment, must be accompanied by a confidential offer of settlement. Should the objector not better its offer on the full assessment, he must, unless the Assessor determines otherwise, pay the costs of assessment from that point.
• The format of bills to be changed to, when required for the purposes of assessment, setting out the work done and the costs claimed and the basis on which they have been calculated in a manner sufficient to enable them to be assessed (although not necessarily in the itemised detail previously required) with items so far as practicable grouped under heads of work.

Further important changes that are proposed are as follows:

• The office of the MCA be transferred to the Registry of the Supreme Court, such that the MCA be an officer of the Supreme Court whose decisions are subject to Review.
• The time limitation for applying for solicitor client assessment, if the bill has been paid, be limited to 60 days after final payment, with jurisdiction to extend the time for application conferred on the MCA.
• Section 369 of Legal Profession Act 2004 be amended to allow assessors to award the costs of assessment against the paying party on a solicitor client assessment.
• Section 101 of The Civil Procedure Act 2005 be amended to the effect that interest in respect of party/party costs accrues, in the absence of any other order, from the date of the costs order at the rates applicable to a judgment debt, thereby replacing the current allocatur regime with the incipitur.
• The Cost Assessment Rules Committee (“CARC”) promulgate guidelines for assessors on whether, when and in what circumstances, and at what rate items would ordinarily be allowed on party/party assessment, including: hourly rates for practitioners of varying seniority and location; overheads such as photocopying, scanning, and travel expenses; research time; reviewing time; intraoffice conferences; briefing senior counsel; retaining experts and agents.
• Selected decisions of Assessors be published on the Scheme website.

The above is merely an elementary summary of some of the significant changes that are being sought. Further analysis can be found here and a copy of the report can be found below.

To ensure that your firm is set up to take full advantage of these proposed changes or to discuss them in further detail, please contact Charles Ackroyd or Alan Adrian of our office.

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