{"id":203557,"date":"2021-03-16T17:59:23","date_gmt":"2021-03-16T04:59:23","guid":{"rendered":"https:\/\/legalvision.co.nz\/?p=203557"},"modified":"2024-11-05T16:30:04","modified_gmt":"2024-11-05T03:30:04","slug":"how-costs-and-disbursements-work-in-courts","status":"publish","type":"post","link":"https:\/\/legalvision.co.nz\/disputes-and-litigation\/how-costs-and-disbursements-work-in-courts\/","title":{"rendered":"How Costs and Disbursements Work in New Zealand Courts"},"content":{"rendered":"\n<p>Understanding costs and disbursements is crucial for individuals or businesses involved in legal proceedings in New Zealand. This knowledge can help you recover a portion of your expenses, as legal fees and other costs can add up when <a href=\"https:\/\/legalvision.co.nz\/disputes-and-litigation\/how-new-zealands-court-system-works\/\">you are in court<\/a>. &nbsp;This article covers:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>definitions of costs and disbursements;&nbsp;<\/li>\n\n\n\n<li>key information for parties in legal cases; and&nbsp;<\/li>\n\n\n\n<li>an explanation of &#8216;security for costs&#8217; and when it may be required.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span style=\"font-weight: 400\">What Are Costs and Disbursements?<\/span><\/h2>\n\n\n\n<p><span style=\"font-weight: 400\">Costs and disbursements are the two main <a href=\"https:\/\/legalvision.com.au\/court-costs-litigation\/\">kinds of costs<\/a> you incur as part of a legal case. \u2018Costs\u2019 refers specifically to legal fees: the direct cost of hiring a lawyer to represent you. Disbursements, by contrast, refer to the administrative and other expenses you will have to pay as part of the proceeding, such as court filing fees and other court expenses. These tend to be \u2018indirect\u2019 expenses compared to legal fees, but <\/span>you still need to<span style=\"font-weight: 400\"> pa<\/span>y them<span style=\"font-weight: 400\"> as part of the proceeding.\u00a0\u00a0<\/span><\/p>\n\n\n\n<div class=\"box box--info box--icon\">\n<p><span style=\"font-weight: 400\">At the end of a case, the court (i.e., the judge) can decide whether to order the unsuccessful party to pay costs and disbursements. Costs and disbursements are calculated differently in terms of what amount that party will have to pay, and not all costs and disbursements are recoverable.&nbsp;<\/span><\/p>\n<\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><span style=\"font-weight: 400\">Calculation of Costs<\/span><\/h3>\n\n\n\n<p>The court will calculate costs on a particular scale, such <a href=\"https:\/\/www.legislation.govt.nz\/regulation\/public\/2016\/0225\/latest\/DLM6953320.html\">as this one<\/a> set out in law. These scales set out how much of a lawyer\u2019s time is reasonable to incur for different activities (such as inspecting documents or appearing at a hearing). NZ courts use different scales for calculating costs:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>District Court:<\/strong> This court employs a daily recovery rate. This is the amount of costs you are allowed to recover from the other side.\u00a0<\/li>\n\n\n\n<li><strong>High Court:<\/strong> A more complex three-tier band that categorises the amount of money you can claim for costs per day is used. The complexity of your proceedings will determine what category you fall into.&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>You should be aware that in both courts, judges have the discretion to adjust the costs where appropriate. The aim is to provide a relatively objective metric for calculating costs.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span style=\"font-weight: 400\">Calculation of Disbursements<\/span><\/h3>\n\n\n\n<p><span style=\"font-weight: 400\">However, disbursements work differently. As they are usually court-related expenses, they will usually be fixed by the registrar (an administrative official in the court). The registrar will look at the disbursements claimed by the successful party in a legal proceeding. They will then confirm the amount to pay by the unsuccessful party.<\/span> However, this applies<span style=\"font-weight: 400\"> if there are no issues with how it has been calculated.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span style=\"font-weight: 400\">What Do You Need to Know About Costs and Disbursements?<\/span><\/h2>\n\n\n\n<p><span style=\"font-weight: 400\">There are multiple types of orders a court can make at the end of a case regarding costs and disbursements. The most common orders a judge will make include:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-weight: 400\">ordering the unsuccessful party to pay the costs and disbursements of the successful party;&nbsp;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">ordering that \u201ccosts lie where they fall\u201d. This is a legal expression m<\/span>eaning<span style=\"font-weight: 400\"> that <\/span>the judge orders<span style=\"font-weight: 400\"> neither side <\/span>t<span style=\"font-weight: 400\">o pay t<\/span>he other&#8217;s costs<span style=\"font-weight: 400\">. They just pay their own costs (i.e., where they have \u2018fallen\u2019 already); and\u00a0<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">\u2018reserving\u2019 (or holding) an order for costs until the final determination in a case has been made. This can occur when t<\/span>here has been a <span style=\"font-weight: 400\">judgement on an <\/span><a href=\"https:\/\/legalvision.co.nz\/disputes-and-litigation\/interlocutory-order\/\"><span style=\"font-weight: 400\">interlocutory application<\/span><\/a><span style=\"font-weight: 400\">, but there has not yet been a final decision.&nbsp;<\/span><\/li>\n<\/ul>\n\n\n\n<div class=\"box box--info box--icon\">\n<p><span style=\"font-weight: 400\">The most important thing to do in terms of costs and disbursements is to record whatever costs you incur in bringing or defending a proceeding. In order to claim payment for them later, you may have to show evidence of both costs and disbursements.<\/span><\/p>\n<\/div>\n\n\n    <div class=\"my-7 lg:my-10 border-y-2 border-gray-100 py-7 lg:py-10 flex flex-col sm:flex-row items-start gap-10\">\n                    <img decoding=\"async\" class=\"w-52 mx-auto my-0! rounded\" src=\"https:\/\/img.legalvision.com.au\/wp-content\/uploads\/sites\/2\/2021\/12\/08180607\/GeneralCounselToolKit560x792-wp.jpg\" alt=\"Front page of publication\"\n                 loading=\"lazy\" width=\"208\" height=\"298\">\n                <section>\n            <div class=\"text-2xl font-bold\">NZ General Counsel Toolkit<\/div>\n            <div class=\"body-text\">\n                <p>You can transform your legal function with our free General Counsel Toolkit. 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Security for costs is a payment of money by one party (usually the party making the claim) to the court. It acts as a guarantee that if they are unsuccessful in the proceeding or otherwise lose the case, they will still be able to pay the costs of the other party. This security amount is typically kept safely in the court\u2019s trust account until the final outcome of the proceeding.<\/p>\n\n\n\n<p>You need to provide security for costs if the other party makes a successful application to the court that you should have to put up an amount of money in advance for costs.<\/p>\n\n\n\n<div  class=\"box box--icon box--info\">\n    <p>It is a good idea to get legal advice if you are asked to provide security for costs and discuss the potential liability of a legal proceeding.<\/p>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\">What is \u2018Indemnity for Costs\u2019?<\/h2>\n\n\n\n<p>An indemnity for costs award is an award of a higher scale of costs for the successful party\u2019s costs which can be made by the court in exceptional circumstances. This includes where the other party behaved unreasonably or badly or brought a claim without merit. A court may award the successful party for all or most of their costs. Circumstances where a court may order an indemnity for costs include, amongst other justifiable reasons,\u00a0 where a:<br><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>party has acted badly in commencing, continuing or defending your proceedings;<\/li>\n\n\n\n<li>party ignored or disobeyed a court order or direction, or breached their undertaking to the court or another party;<\/li>\n\n\n\n<li>affected fund to the proceedings required a person to become involved, and they acted reasonably;<\/li>\n\n\n\n<li>non-party became involved and acted reasonably; or<\/li>\n\n\n\n<li>contract or deed between parties calls for an indemnity of costs.\u00a0<\/li>\n<\/ul>\n\n\n\n<div  class=\"box box--icon box--info\">\n    <p>Indemnity for costs is a discretionary award that the claiming party must persuade the court to impose. If you consider one of the above circumstances applies to your proceeding, you should speak to your lawyer about seeking an indemnity for costs.<\/p>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span style=\"font-weight: 400\">Key Takeaways<\/span><\/h2>\n\n\n\n<p><span style=\"font-weight: 400\">Costs and disbursements are types of costs you may incur as part of a legal proceeding in New Zealand. Costs refer to legal fees (that a lawyer charges for their time) and disbursements refer to other expenses involved in a proceeding (such as court fees). In NZ, courts order that the unsuccessful party pay the costs and disbursements o<\/span>f the<span style=\"font-weight: 400\"> winning party. You should make sure to carefully record your costs and expenses throughout the process of a legal proceeding to maximise your chances of successfully applying to have them paid by the other party at the end of the proceeding. <\/span><\/p>\n\n\n\n<p>If you want to know more about costs and disbursements, our experienced <a href=\"https:\/\/legalvision.co.nz\/dispute-lawyers-lp\">disputes and litigation lawyers<\/a> can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on <a href=\"tel:+64800005570\" class=\"AVANSERnumber dynamic-number\">0800 005 570<\/a> or visit our <a href=\"https:\/\/legalvision.co.nz\/membership\/\">membership page<\/a>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span style=\"font-weight: 400\">Frequently Asked Questions<\/span><\/h2>\n\n\n\n<div class=\"schema-faq wp-block-yoast-faq-block\"><div class=\"schema-faq-section\" id=\"faq-question-1615869356865\"><strong class=\"schema-faq-question\"><strong>What are disbursements and how do they work?<\/strong><\/strong> <p class=\"schema-faq-answer\">Disbursements are other fees you or your business may incur in a legal proceeding, such as the filing fees and other expenses you have to pay as part of a legal proceeding. Again, the winning party can request that the unsuccessful party pays for their disbursements.\u00a0<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1615869364305\"><strong class=\"schema-faq-question\"><strong>What is security for costs?<\/strong><\/strong> <p class=\"schema-faq-answer\">Security for costs is when a party must pay a sum of money to the court\u2019s trust fund. This guarantees that if they are unsuccessful in the proceeding, they will be able to pay costs. <\/p> <\/div> <\/div>\n","protected":false},"excerpt":{"rendered":"<p>Understanding costs and disbursements is crucial for individuals or businesses involved in legal proceedings in New Zealand. This knowledge can help you recover a portion of your expenses, as legal fees and other costs can add up when you are in court. &nbsp;This article covers: What Are Costs and Disbursements? Costs and disbursements are the<a href=\"https:\/\/legalvision.co.nz\/disputes-and-litigation\/how-costs-and-disbursements-work-in-courts\/\">Continue reading <span class=\"sr-only\">&#8220;How Costs and Disbursements Work in New Zealand Courts&#8221;<\/span><\/a><\/p>\n","protected":false},"author":13518,"featured_media":201789,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_relevanssi_hide_post":"","_relevanssi_hide_content":"","_relevanssi_pin_for_all":"","_relevanssi_pin_keywords":"","_relevanssi_unpin_keywords":"","_relevanssi_related_keywords":"","_relevanssi_related_include_ids":"","_relevanssi_related_exclude_ids":"","_relevanssi_related_no_append":"","_relevanssi_related_not_related":"","_relevanssi_related_posts":"","_relevanssi_noindex_reason":"","editor_notices":[],"footnotes":""},"categories":[9],"tags":[54,305,680,681,682],"class_list":["post-203557","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-disputes-and-litigation","tag-medium-business","tag-interlocutory-order","tag-legal-fees","tag-disbursements","tag-costs"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast 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