Posted on: Aug 17, 2016

The Employment Relations Authority has issued a practice note regarding its calculation of costs awards.

Parties to proceedings in the Authority ought always to remember in evaluating their proceedings that if they are unsuccessful, they will almost always face the prospect of having to make a contribution to the costs of the successful party, as well as meeting their own costs.

The Authority has traditionally used a daily tariff approach as a starting point when making costs awards, which until 31 July 2016 was $3,500 per day. For all proceedings filed after 1 August 2016, that tariff will increase now to $4,500 for the first day of hearing and $3,500 for any subsequent days.

What is involved with an award for costs?

  1. Typically the Authority will not deal with costs until the substantive determination has been made and thereafter costs will fall for disposition either by negotiation between the parties or by determination of the Authority.
  2. Parties will always be encouraged to try to resolve costs on their own terms but in the result that costs are not able to be determined by agreement between the parties, the Authority will fix costs on the basis of a timetable that it may set.
  3. Most commonly, the Authority Member will require the successful party to file its claim for costs in the Authority, providing a copy of that document to the other party, and then the other party will have a right of reply on a timetable which the Authority will set.
  4. The daily tariff that the Authority applies gives no more than a guide to the starting point that the Authority will use in calculating the entitlement of the successful party to costs; there may be factors in the particular case which require the Authority to either increase the daily tariff figure or reduce it.
    • For instance, if the behaviour of the successful party created cost that was unnecessarily incurred, then the Authority may reduce the daily tariff amount.
    • Conversely, if the unsuccessful party turned down an operative Calderbank (without prejudice save as to costs) offer then that may encourage the Authority Member to increase the daily tariff proportionately.
  5. Where it is necessary for the Authority to make a decision about costs (that is where the parties are unable to agree costs on their own terms), parties should make clear in their submissions what claim if any they make and the reasons for that position. If they are seeking an award of costs then it is important that that is supported by material such as copies of invoices showing fees and other expenses that have been incurred, the time taken by the practitioner or advocate and the relevant hourly rate.
  6. Costs associated with preparation for and attendance at mediation, whether by agreement of the parties or at the direction of the Authority, are not typically included in costs awards of the Authority.

See: Practice Note 2



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