Costs Order

What it is

A costs order is a court order dealing with the legal costs of a proceeding — who should pay them, and sometimes the amount or basis on which they are worked out. A common general principle is that the unsuccessful party may be ordered to contribute to the successful party's costs, though courts retain discretion.

A costs order rarely covers every dollar a party has actually spent, and how costs are assessed varies. The approach depends on the court and the rules in the relevant state or territory.

Why it matters

Costs are an important practical consideration when deciding whether to pursue or defend a claim, because litigation can be expensive and the outcome on costs is not guaranteed. Weighing potential costs against the size of a debt is part of deciding whether court action is worthwhile, or whether a letter of demand or settlement is a better path.

This is general information only and is not legal advice. Costs rules and the exercise of discretion vary between jurisdictions — obtain advice on your circumstances.