The Federal Court has full discretionary power over costs, meaning that the Court can decide who is required to pay costs and how much. In exercising its discretion, the Court may consider the factors listed below:

(a) the result of the proceeding;
(b) the amounts claimed and the amounts recovered;
(c) the importance and complexity of the issues;
(d) the apportionment of liability;
(e) any written offer to settle;
(f) any offer to contribute made under rule 421;
(g) the amount of work;
(h) whether the public interest in having the proceeding litigated justifies a particular award of costs;
(i) any conduct of a party that tended to shorten or unnecessarily lengthen the duration of the proceeding;
(j) the failure by a party to admit anything that should have been admitted or to serve a request to admit;
(k) whether any step in the proceeding was (i) improper, vexatious or unnecessary, or (ii) taken through negligence, mistake or excessive caution;
(l) whether more than one set of costs should be allowed, where two or more parties were represented by different solicitors or were represented by the same solicitor but separated their defence unnecessarily;
(m) whether two or more parties, represented by the same solicitor, initiated separate proceedings unnecessarily;
(n) whether a party who was successful in an action exaggerated a claim, including a counterclaim or third party claim, to avoid the operation of rules 292 to 299;
(n.1) whether the expense required to have an expert witness give evidence was justified given: (i) the nature of the litigation, its public significance and any need to clarify the law, (ii) the number, complexity or technical nature of the issues in dispute, or (iii) the amount in dispute in the proceeding; and
(o) any other matter that it considers relevant.

Generally, the Court has 5 options in awarding costs:

• award no costs to the successful party;
• award party and party costs (in accordance with Tariff B);
• award lump sum costs;
• award costs on a solicitor-and-client basis;
• award costs against a successful party.

The Court is not limited to awarding costs in relation to the proceeding as a whole, but can also break down the award of costs in respect of particular issues or steps.

Last updated: October 9, 2016