The Supreme Court of Queensland was asked to decide whether a plaintiff who sustains an injury whilst at work, and where that injury results in a WPI of greater than 20%, can recover counsel fees as an allowable outlay under the workers’ compensation legislation.
In issue
- The Supreme Court of Queensland was asked to decide whether a cost assessor erred in deciding that counsel’s fees were not an allowable cost in accordance with Part 8, Division 2 of the Workers’ Compensation and Rehabilitation Regulation 2014 (Qld) (the Regulation).
The background
The plaintiff claimed damages for personal injuries sustained during a work-related incident. The parties negotiated a settlement and signed a release and discharge, a clause of which stipulated that WorkCover Queensland would pay the plaintiff’s costs as agreed by the parties, or failing agreement, as assessed. The parties were unable to come to an agreement for the calculation of the plaintiff’s costs.
Accordingly, a costs assessor was appointed to assess the costs payable to the plaintiff. On 30 August 2022, the costs assessor issued a certificate, which concluded that counsel’s fees were not an allowable outlay under Part 8, Division 2 of the Regulation. Further, the assessor also upheld objections made by WorkCover on the basis that the cost of two counsel were not allowed.
The decision at trial
On 6 December 2022, Cooper J dismissed the plaintiff’s application opposing the costs assessor’s determinations.
Issue 1 – Counsel’s fees are not an allowable outlay
In determining on the first issue, Cooper J noted the most pivotal provisions were sections 135, 136 and 137 of the Regulation, which set out the basis for calculating costs where (relevant to this claim) a claim is made by a worker who has a WPI over 20%.
Critically, section 137 of the Regulation provides for the allowable outlays (in respect of which counsel’s fees is not directly listed), which are ‘in addition to legal costs’. Firstly, the plaintiff submitted that the regulation is intended to allow recovery of certain identified costs, rather than prohibiting costs not mentioned. The court noted that even if that was accepted, it would not assist in forming a basis for the inclusion of counsel fees.
Ultimately, the court decided that ‘legal costs’ could not be read as including counsel fees. Based on its location in the Regulation, being directly after sections 135 and 136, which both discuss the basis for calculating ‘legal professional costs’, section 137 should therefore correctly be read to mean in addition to the costs allowed under sections 135 and 136. Importantly, neither section 135 nor 136 provide any basis for the recovery of counsel fees.
However, the plaintiff further contested that both the Regulation and the Workers’ Compensation and Rehabilitation Act 2003 (Qld) (the Act) are inconsistent in their use of the term ‘legal costs’. In various regulations and sections, ‘legal costs’ is used to reference all costs, including outlays incurred (which would include counsel’s fees). The court reviewed these various inconsistencies, eventually noting that each use of the term ‘legal costs’ had been interpreted based upon its purpose and context within the Act or Regulation.
Accordingly, the court concluded that, on its proper construction, Part 8, Division 2 of the Regulation (and particularly section 137) could not be read to include counsel fees as an allowable outlay to be recovered.
Issue 2 – Two counsel fees are not to be allowed
The court did go on to deal with this issue, in the event that the construction of Part 8, Division 2 of the Regulation arrived at was incorrect.
Both the plaintiff and defendant agreed that the relevant principles that apply when determining whether the cost of two counsel should be allowed was whether it was ‘necessary or proper for the attainment of justice or for enforcing or defending the right of the party whose costs are being assessed’. The defendant objected to the inclusion of two counsel based on various factors such as the admission of liability, the trial was only set down for two days and the plaintiff had only intended on calling five witnesses.
In upholding this object, the assessor exercised a discretion, which the court would not interfere with without the demonstration that the exercise of discretion was manifestly wrong. The court determined that it was a decision that was not manifestly wrong in the circumstances. On that basis, if the court’s interpretation of Part 8, Division 2 of the Regulation was wrong, the plaintiff would be allowed the cost of the senior counsel with no junior counsel.
Implications for you
This case provides insurers alike a clear authority to support the assertion that counsel fees are not an expense or outlay that can correctly be recovered by a plaintiff claiming damages under the Workers' Compensation and Rehabilitation Act 2003.