In New South Wales, party/party and solicitor/client costs are assessed 'on the papers' by Costs Assessors. Costs Assessors are appointed by the Chief Justice under s 93C of the Legal Profession Uniform Law Application Act 2014 (NSW). In NSW, there are around 45 court-approved costs assessors, some of whom are Review Panellists. A list of the current costs assessors and the members of the Costs Assessor Rules Committee is available on the Supreme Court’s website . Review panellists are those Assessors on the list maintained under r 44(2) of the Legal Profession Uniform Law Application Regulation 2015 (NSW), who are entitled to form a panel to review a Costs Assessor's determination.
At the conclusion of an assessment, Costs Assessors issue a Certificate or Determination of costs and a Certificate or Determination of costs of costs assessment. Either party or the Manager Costs Assessment can seek a review a Costs Assessor’s determination within 30 days to from the date the Court forwards the Certificate of Determination to the parties. A review panel constituted by two costs assessors conducts the review, either affirming the Costs Assessor’s determination or setting it aside and substituting the determination that, in its opinion, should have been made.
At the conclusion of an assessment, the Review Panel issues a Certificate of substituted Determination of costs and a Certificate of Determination of costs of the review panel. Either party may appeal against a decision of the review panel, on matters of law and fact, to:
The District Court or the Supreme Court (as the case requires) has all the functions of the review panel. However, the appeal is by way of a rehearing, and fresh evidence or evidence in addition to or in substitution for the evidence before the review panel or costs assessor may, with the leave of the Court, be given on the appeal. The District Court or Supreme Court’s decision can be appealed to the appellate division of the Supreme Court.
Ahern v Aon Risk Services Australia Ltd  NSWCA 166 (6 August 2021) is a judicial review by the NSW Court of Appeal of a District Court judgment: Ahern & Anor v Aon Risk Services Australia Limited  NSWDC 159 (1 May 2020). The District Court judgment reviewed the Review Panel's decision, which reviewed the Costs Assessor's decision.
The parties’ dispute about costs arose out of settlement of litigation commenced in the Supreme Court of New South Wales on 28 June 2012 against the Defendant and two other parties alleging that the Plaintiffs were significantly underinsured because of the negligence of their broker, due to which the Plaintiffs faced loss when its premises and contents were damaged by fire on 29 June 2006. The Supreme Court proceedings were settled on 10 February 2015 pursuant to a Deed and Orders entered the same day. By consent, the Defendant was ordered to pay the Plaintiffs $1,375,000.00 plus costs as agreed or assessed. Since then, the parties have engaged in a long, drawn-out battle as to how much the Plaintiffs should recover for costs from the assessment process.
As the costs order was made prior to July 2015, the Plaintiffs applied for costs assessment pursuant to the old legislation - the Legal Profession Act 2004 (NSW) (“LPA”). However, the decisions made pursuant to this application is equally applicable to matters for assessment before the new legislation. The Applicants’ bill totalled $1,748,077.10. After costs assessment, the costs assessors determined the fair and reasonable amount of costs as $1,262,598, including the applicants’ costs of the assessment process. A certificate of determination of costs of the costs assessment, including the assessor’s costs, was issued in the amount of $21,040 and was ordered to be payable by the respondent.
Both parties sought a review of this determination and the review panel set aside the assessor’s determination and certificate and issued a substituted certificate in the amount of $1,165,851. This amount included the applicants’ costs of the assessment process, which was assessed at $66,000 by determining a lump sum figure and without specific reference to the items in the applicants’ original bill of costs. A separate certificate of determination of the costs of review was also issued.
The Applicants appealed to the District Court on the questions of law, on the following grounds :
The District Court dismissed the appeal. The Applicants appealed to the Court of Appeal querying whether the primary judge erred in determining that the review panel gave adequate reasons for its decision that the lawyers’ hourly rates for work done in prosecuting the applicants’ underlying claim were fair and reasonable, and that the review panel gave adequate reasons for its determination of the applicants’ costs of the assessment process.
The Court of Appeal held, inter alia, there was no error by the primary judge in determining that the reasons of the review panel were adequate. The main takeaways from the District Court and Court of Appeal judgments are as follows:
Costs Assessors’ determinations are reviewable by a Review Panel, whose determinations are in turn reviewable by the District and Supreme Courts of New South Wales. Costs Assessors and Review Panellists have a wide discretion as to determining costs because of which the Courts appear to be less inclined to significantly overturn a Costs Assessor or a Review Panellists’ discretion.
This article – ‘Costs Assessment and Review in New South Wales’ – first appeared in Precedent, journal of the Australian Lawyers Alliance, issue 167, published in November 2021 (Sydney, Australia, ISSN 1449-7719), pp 51-52. It has been reproduced with the kind permission of the author and the ALA. For more information about the ALA, please go to: www.lawyersalliance.com.au.