Australia: Be prepared, or be better prepared – costs of arbitration: Insight from Rodgers v Amcor Ltd [2018] WADC 134

Last Updated: 17 December 2018
Article by Stephen Williams

This case involved an appeal to the District Court from a decision of an Arbitrator at WorkCover WA in relation to a costs order made directly against a worker's lawyers.

Gary Rodgers sustained a low back injury at work. Statutory payments were made by Allianz Australia Ltd (Allianz) until around 2016, at which point they ceased as a result of medical opinions obtained by Allianz. Mr Rodgers subsequently appointed lawyers, Chapmans, who lodged a WorkCover application seeking orders that Allianz continue to pay expenses which had been incurred by him.

The matter was not resolved at conciliation so an arbitration application was filed in July 2017. In this his lawyers foreshadowed obtaining a report from his GP, noting that it had not yet been commissioned. Further, the application did not include a witness statement, or details of the expenses he was seeking payment for. Allianz then filed a response to the application noting there was no evidence to which they could reply.

A first directions hearing was held in August 2017 with no meaningful outcome because of a lack of preparation. Despite the lapse of some two months since the conciliation conference and some five weeks since lodgement of the application for arbitration, the basis of Mr Rogers' application was still not supported by any medical evidence. However, at the directions hearing, Mr Rogers drew to his lawyers' attention to the fact the outstanding GP report had been sent directly to them in early July 2017. The Arbitrator held that the failure to provide the foreshadowed GP report to Allianz, and to file and serve it in the proceedings, was Mr Rogers' lawyers' failure and ordered them to pay Allianz's costs of the hearing, plus their taxi fares to and from the hearing, and not to charge their client.

On 12 October 2017 Allianz advised that it would not pursue payment of the costs ordered by the Arbitrator. Allianz also made an offer to pay Mr Rogers' costs of the directions hearing.

However, despite this concession his lawyers appealed the order for costs seeking to have it quashed or in the alternative, to have the matter allocated to a different Arbitrator to be determined according to law. The principal issue identified in the appeal notice was whether the Arbitrator correctly interpreted and applied Sections 264 (5) and (6), and 265 Workers' Compensation and Injury Management Act 1981.

Section 264 confirms, relevantly, that costs are in the discretion of the relevant dispute resolution authority (in this case the Arbitrator) and that a dispute resolution authority may determine by whom, to whom and to what extent costs are to be paid.

Section 265 deals with costs unreasonably incurred by a legal representative and states, relevantly, that if in any proceeding before a dispute resolution authority where costs are incurred improperly or without reasonable cause or are wasted by undue delay or by any other misconduct or default, of a legal representative), a dispute resolution authority may make orders directing the representative to repay the client costs which the client has been ordered to pay to any other party to the proceeding; or directing the representative personally to indemnify any other person than the client against costs payable by the person indemnified.

Leave to appeal was granted and the appeal was dismissed. In coming to this decision, His Honour Judge Gething held that the Arbitrator's reasons were adequate, her interpretation of Sections 264 and 265 were correct, and she did not err in exercising the discretion in Section 265.

The moral of the case is perhaps to remember the 5 Ps or "Proper Preparation Prevents Poor Performance".

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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