Costs

12.177 Generally, a successful plaintiff is entitled to receive party and party costs, in the absence of countervailing circumstances.^[231] The ALRC considers that a court hearing a claim for serious invasions of privacy should have discretion in relation to awards of costs. The ALRC considers that two options would be appropriate for inclusion in legislation enacting the new tort on the court’s power with respect to awards of costs.

12.178 The first option would for the legislation to include a provision similar to s 43(2) of the Federal Court of Australia Act 1970 (Cth), which provides that, ‘[e]xcept as provided by any other Act, the award of costs is in the discretion of the Court or Judge’.

12.179 Section 43 then provides for a range of orders that a judge may make, including:

(3) Without limiting the discretion of the Court or a Judge in relation to costs, the Court or Judge may do any of the following:

make an award of costs at any stage in a proceeding, whether before, during or after any hearing or trial;

make different awards of costs in relation to different parts of the proceeding;

order the parties to bear costs in specified proportions;

award a party costs in a specified sum;

award costs in favour of or against a party whether or not the party is successful in the proceeding;

order a party’s lawyer to bear costs personally;

order that costs awarded against a party are to be assessed on an indemnity basis or otherwise.

12.180 This recommendation relates to party and party costs which are those costs that a court may order a party to a proceeding to pay to the other party.^[232] Party and party costs must be reasonable and necessary for the proper conduct of a case.^[233]

12.181 In its report, Costs Shifting—Who Pays for Litigation, Report 75 (1995) (Costs Shifting), the ALRC identified several reasons for the award of costs to a successful plaintiff:

• to compensate successful litigants for at least some of the costs they incur in litigating;

• to allow people without means to litigate;

• to deter vexatious or frivolous or other unmeritorious claims or defences;

• to encourage settlement of disputes by adding to the amount at stake in the litigation; and

• to deter delay and misconduct by making the responsible party pay for the costs his or her opponent incurs as a result of that delay or misconduct.

12.182 The second option would be for the legislation to provide that awards of costs should be determined according to the enabling act of each court or tribunal that is given jurisdiction to hear the action. This would have the advantage that plaintiffs could consider the court or tribunal’s particular powers with respect to costs when deciding on an appropriate forum to bring their action.

12.183 The manner in which costs are awarded is critical to providing appropriate access to justice—a principle that informs the work of this Inquiry.^[234] Access to justice was raised by several stakeholders who argued that the principle should underscore much of the ALRC’s formulation of the new tort.^[235]

12.184 The forum in which a statutory cause of action is to be heard will impact on the potential award of costs. The ALRC deals with the matter of forums for the cause of action in Chapter 10, recommending that federal courts and appropriate state and territory courts would have jurisdiction to hear actions under the new tort. The ALRC has not recommended that the new tort be heard in state tribunals such as VCAT,^[236] although the ALRC leaves this possibility open.

12.185 Several submissions raised the concern that many plaintiffs may be deterred from starting proceedings due to the risk of an adverse costs order.^[237] PIAC suggested that, if the cause of action were to be vested in a federal court, the ALRC should propose that courts be empowered to make orders protecting litigants from adverse costs orders. PIAC argued that,

in the absence of such a costs rule, there is a risk that privacy-related litigation would become the sole preserve of those wealthy enough to afford to pay for legal representation and to run the risk of incurring an adverse costs order in the event they are unsuccessful. In PIAC’s experience, even where pro bonolegal representation or representation on a conditional fee basis is secured, many meritorious cases do not proceed due to the risk of an adverse costs order. This is especially the case in matters where there is a great disparity in resources between the applicant and respondent.^[238]

12.186 Similarly, Redfern Legal Centre proposed the adoption of an adverse costs model similar to that operating in employment law in Australia.^[239] Under s 570(2)(a) of the Fair Work Act 2009 (Cth), costs incurred in a proceeding in any court will only be awarded against an unsuccessful plaintiff if the proceedings are vexatious or unreasonable. Redfern Legal Centre argued that privacy complaints were analogous to proceedings under that Act rather than any commercial proceedings.^[240]

12.187 The ALRC notes stakeholder concerns about the deterrent effect of potentially adverse costs orders. The ALRC supports the principle of broad access to justice, but notes that costs orders are also designed to deter vexatious or unmeritorious claims.^[241] The ALRC considers that actions for serious invasion of privacy should be dealt with consistently with actions brought in the forum for other intentional torts or other analogous actions.

12.188 Women’s Legal Services NSW and the Australian Institute of Professional Photography (AIPP) suggested a court should be empowered to award indemnity costs where a defendant has demonstrated malice or vindictiveness.^[242] Unlike party-party costs which operate as a partial indemnity for the successful party against liability for legal costs,^[243] indemnity costs, which fully compensate the successful party for the inappropriate conduct of another party to the proceedings, are only awarded in exceptional circumstances.^[244] Most courts have the power to award indemnity costs in lieu of party-party costs in appropriate circumstances.