9.1 This chapter considers how the targeted use of the Federal Court’s existing costs powers might help control discovery. The chapter first considers costs between the parties, including when the Court might disallow costs that have been improperly, unreasonably or negligently incurred, and how the Court might take into account the failure of parties to conduct proceedings in manner consistent with the overarching purpose of civil practice and procedure in s 37M of the Federal Court of Australia Act 1976 (Cth). The ALRC recommends that Federal Court practice notes provide that the Court will expect practitioners to address this matter, including how a party’s failure to conduct proceedings consistently with the overarching purpose might be reflected in costs orders.
9.2 The chapter then considers whether there should be a presumption that parties requesting discovery pay the estimated costs in advance and whether cost-capping orders might sometimes be used to control discovery. The ALRC concludes that, although there should not be a presumption that parties requesting discovery pay the estimated costs in advance, the order may be useful in some limited circumstances—particularly as an incentive to confine the scope of discovery to reasonable proportions. The ALRC also concludes that cost-capping orders may be appropriate in some limited circumstances to ensure the costs of discovery are proportionate to the issues in dispute. Accordingly, the ALRC recommends that the Federal Court of Australia Act 1976 (Cth) be amended to provide that the Court may make an order: that some or all of the estimated costs of discovery be paid for in advance by the party requesting discovery; that a party requesting discovery give security for the payment of the cost of discovery; and that specifies the maximum cost that may be recovered for giving discovery or taking inspection. Federal Court practice notes should also outline relevant circumstances the practitioners might be expected to address in relation to these orders.
9.3 The chapter then considers whether lawyers, rather than their clients, should sometimes bear the costs of discovery or be prohibited from charging more than their actual costs in conducting discovery. The power of the Court to disallow costs as between a lawyer and their client for incurring costs, for example, without reasonable cause is discussed. The chapter notes the Court’s power to order a lawyer to bear costs personally, because of a failure to comply with the duty to assist clients to conduct proceedings in a way that is consistent with the overarching purpose. The ALRC recommends that Federal Court practice notes provide that the Court will expect practitioners to ensure that they have complied with their duty to assist the parties to give discovery and take inspection in accordance with the overarching purpose in s 37M.
9.4 Finally, the chapter expresses support for the proposed introduction in the Legal Profession National Law of a provision to the effect that a law practice must ‘charge costs that are not more than fair and reasonable in all the circumstances’.