Procedure in applications to set aside costs agreements

It costs about $290 to file an application to set aside a costs agreement under s. 3.4.32 of the Legal Profession Act, 2004 in VCAT.  It is not a step lightly to be taken.  Moreso than much of what goes on in VCAT, such applications are treated like litigation in a court.  Costs will be awarded against the unsuccessful party much more often than in other kinds of proceedings in VCAT; indeed, it is more or less true that costs follow the event, that is, the loser generally has to pay the winner’s costs calculated according to an appropriate County Court scale.  See the page on VCAT’s website about these kinds of applications, which includes the correct form for initiating these kinds of proceedings.

Following filing, VCAT generally sets down a directions hearing of its own motion. There is a standard form of orders which is often made.  They are reproduced below.  To avoid a directions hearing, applicants would be well-advised to include the details (‘particulars’ in legal lingo) the usual orders require in the application itself.  The applicant should then ask the respondent whether it will consent to doing what the usual orders generally require within, say, 2 weeks.  Alternatively, if that was not done at the outset, the parties might consider submitting the orders they would each be happy with (‘a minute of consent orders’ in legal lingo) in the terms of the usual orders to VCAT in advance, saving the need for a trip to VCAT if the decision maker who would otherwise preside at the directions hearing is content to make the orders on the papers.  Of course, a directions hearing may be necessary anyway.  Directions made at directions hearings are not necessarily limited to those found in the usual orders.  Nor are the usual orders always made.

The usual orders are:

‘1.    The applicant by [date] is to serve upon the respondent and lodge with the Tribunal written particulars of:

(a)    the costs agreement which is the subject matter of the application. The applicant is to provide to the respondent and to the Tribunal a photocopy of the costs agreement;

(b)    any other document that is relied upon by the applicant as evidence of a costs agreement. The applicant is to provide to the respondent and to the Tribunal a photocopy of any such document;

(c)    any conduct that is relied upon by the applicant as evidence of a costs agreement;

(d)    the statutory basis of the application, including whether the application is based upon an allegation of fraud or misrepresentation, a finding of misconduct or unsatisfactory conduct, an allegation of failure to disclosure information, or some other basis;

(e)    the facts or circumstances to be relied upon in support of each statutory basis of the application;

(f)    the legal services provided to the applicant by the respondent.

2. The respondent by [date] is to serve upon the applicant and lodge with the Tribunal the respondent’s response to the application, including written particulars of:

(a)    the costs agreement referred to in the application. The respondent is to provide to the applicant and to the Tribunal a photocopy of the costs agreement;

(b)    any other document that the respondent relies upon as evidence of a costs agreement. The respondent is to provide to the applicant and to the Tribunal a photocopy of any such document;

(c)    any conduct that is relied upon by the respondent as evidence of a costs agreement;

(d)    the legal services the respondent contends to be the subject matter of the alleged costs agreement.

3.    The applicant or the respondent may apply to the Tribunal at any time seeking further directions as to the conduct of the application.

4.    The costs of the directions hearing that took place on [date of directions hearing] are reserved.’

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