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New Costs Procedure in the Federal Court – Important Changes for Insolvency Practitioners

By Bonnie McMahon a Solicitor of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group

On 25 October 2016 the Federal Court of Australia (“the Court”) released a new practice note relating to costs, entitled the “Costs Practice Note” (“the Practice Note”). It is important for all insolvency and legal practitioners to be aware of this Practice Note, as it will be the main guide for Federal Court judges and registrars when they are considering costs related issues.

The Practice Note makes two things very clear:

  • Firstly that taxation of costs will only be used as a last-resort, in exceptional cases; and
  • Secondly that the Court’s preference will be to make a lump-sum costs order, wherever it is practicable and appropriate to do so.

Lump-sum Costs Order Procedure

If parties wish to utilise the lump-sum costs order procedure, they are expected to notify the court of this as soon as possible. Parties do need to need to file a formal application for this, unless they are requested to do so by a judge. Parties can argue for or against the use of a lump-sum costs order, although it will ultimately be at the discretion of the judge, as to whether this order is utilised.
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