Judge denies legal costs recovery in court win

A Victorian Supreme Court judge has delivered a pointed reminder about the rules on orders for recovery of legal costs in litigation.

In the recent case of Hodgson v Amcor Ltd (no 10) [2012] VSC 294, Justice Vickery did not allow the successful parties to recover a significant part of their legal costs. The judge found that the conduct of the successful parties that was at the centre of the dispute was sufficiently bad to preclude them from recovering part of their legal costs. This judgment was despite the fact that their conduct did not mean that they should lose the case.

The general rule on legal costs recoverability

The starting point in any consideration of costs is that 'costs should follow the event'. This effectively means that a court will generally order an unsuccessful party to pay an amount towards the legal costs of the successful party.

This is reflected in the High Court's observation in Oshlack v Richmond River Council (1998) 193 CLR 72, at 96 that 'by far the most important factor which courts have viewed as guiding the exercise of the costs discretion is the result...