Costs shifting

This inquiry into the impact on the litigation system of the costs allocation rules began in June 1994. It arose from a recommendation in the Access to Justice Advisory Committee 1995 report Access to Justice: An Action Plan.

The report reviews the impact on the litigation system of the costs allocation rules. ALRC Report 75 found that the costs allocation rules sometimes operate unfairly and can deny access to justice. In particular, the report outlined that parties had very little knowledge of the amount of legal costs a court proceeding would accumulate, with costing schedules being hard to predict in advance.

Key recommendations

  • The current broad discretions on awarding costs should be replaced by a clear, systematic framework of costs rules designed to support effective control of legal costs and to allow adjustments where access to justice would otherwise be denied.
  • Costs rules should allow caps on the costs that may be recovered, discouraging behaviour that wastes court and parties’ time, encouraging settlement and promoting compliance with other procedures and directions intended to streamline proceedings.
  • The costs allocation rules should not impede public interest litigation.
  • Costs rules must specify how costs are to be apportioned and set out any exceptions. Information about the amount and likely allocation of costs should be given to the parties both prior to and during legal proceedings.
  • As a basic principle, where costs are to be shifted for all or a specified part of proceedings, a party who is awarded costs should be entitled to recover the reasonable costs that he or she has incurred in the course of the litigation.


As yet there has been no direct implementation of the Commission’s recommendations in ALRC Report 75.

The December 2003 Federal Civil Justice System Strategy Paper, released by the Attorney-General’s Department, referred to ALRC Report 75 and suggested the implementation of recommendations 34 to 39 concerning disciplinary and case management costs orders.