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Can a person on legal aid be awarded costs — and if so, how much?

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As noted in Legal Services on Westlaw New Zealand, Peart v Chandra [2022] NZHC 665 confirms the default position that costs may be awarded to a legally aided party (who is successful against an unaided party) up to the lesser of (a) the total fees payable by the Legal Services Commissioner to counsel (i.e. the amount of legal aid approved for payment) and (b) scale costs.

This April 2022 decision dealt with costs on an interlocutory application by the legally aided plaintiff (which had resulted in orders directing the first defendant to file an amended statement of defence and amended affidavit of documents). The plaintiff sought an award of costs on a 2B scale basis (against the first defendant only). Regarding legal aid, the High Court began by observing (with reference to Taunoa v Attorney-General [compensation] (2004) 8 HRNZ 53 (HC) at [43] in a footnote): 

"[5] The plaintiff is and was at all material times legally aided. While noting that an award of costs is limited by r 14.2(1)(f) [of the High Court Rules 2016] to the total fees payable by the Legal Services Commissioner to counsel, she seeks costs of $10,874.50 and disbursements on the basis that the order is made after her counsel has provided evidence of actual costs relevantly charged to the Legal Services Commissioner."

The opposing submissions were then outlined, including as follows re legal aid:

"[6] The first defendant submits that there is an issue as to whether the plaintiff’s counsel has already received legal aid payment in respect of the present application and whether the plaintiff receiving costs from the first defendant would therefore result in her being paid twice. … Moreover, the plaintiff knew that if unsuccessful on the application, no costs would be awarded against her given that she was legally aided."

Paul Davison J replied to those submissions as follows (with reference to Kawhia Offshore Services Ltd v Rutherford HC Hamilton CP61/99, 10 July 2002 in a footnote):

"[9] I consider that the plaintiff is entitled to costs in accordance with the usual principles. There is no issue with the plaintiff receiving an award of costs on the basis that she is legally aided. The plaintiff’s counsel will have received payment from the Legal Services Commissioner. The plaintiff will then be required to repay an amount to the Legal Services Commissioner. There is no concern that the plaintiff will be paid twice. Nor should her entitlement to costs be reduced merely because she is legally aided."

After dismissing various other matters raised (save for declining to award costs to the plaintiff for preparing costs submissions), his Honour ordered as follows:

"[13] I direct the plaintiff’s counsel to provide evidence to the registrar of the actual costs relevantly charged to the Legal Services Commissioner for the purposes of this application.

[14] On the basis that any award of costs cannot exceed that amount, I award costs to the plaintiff on the interlocutory application on a 2B scale basis totalling $9,918.50 together with reasonable disbursements as fixed by the registrar."

The result here — that costs can be awarded to an aided person up to the amount of approved legal aid payments (provided that amount is less than scale costs) — is in keeping with other recent cases on costs in favour of legally aided parties:

These cases, together with Peart v Chandra, are all noted in Legal Services at [LA45.13(1)] on Westlaw New Zealand.

By Kevin Leary

Kevin Leary is a Senior Legal Editor in the New Zealand Analytical Law team at Thomson Reuters. He has more than 20 years' experience as an editor of bound books, looseleafs, precedents and their digital equivalents.

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