Costs for Lay Litigants

The Rules Committee’s consultation paper on costs for lay-litigants has now been released for feedback from the legal profession and other court users.

The Committee is seeking feedback on potential amendments to pts 14 of the High Court Rules 2016 (HCRs) and the District Court Rules 2014 (DCRs) that may alter the ability of litigants-in-person who successfully bring or defend a claim to obtain an award of costs.

In McGuire v Secretary for Justice [2018] NZSC 116, [2019] 1 NZLR 335 (noted (2019) 25 Auckland U L Rev 263), every member of the Supreme Court noted or made criticisms of the present position. That is that most litigants-in-person are not entitled to an award of costs. However, lawyers who currently hold practicing certificates, and parties who are represented by in-house lawyers (employed lawyers), can obtain costs. The majority, however, considered it better for Parliament or this Committee, rather than the Court, to effect any reform.

In exploring the issues raised by the decision in McGuire, the Committee has identified four questions as to the nature and purpose of the costs regime on which it is appropriate to consult at this early stage in the reform process. The answers to these questions will guide any future reforms. These are:

One: Should the concept of “costs” be expanded beyond allowing partial recovery of amounts paid for legal services, thereby allowing litigants-in-person to receive an award of costs?
Two: If so, how should the costs of litigants-in-person be determined?
Three: If not, should costs be narrowed further, so that they must be out of pocket expenses, thereby preventing self-representing lawyers from recovering costs beyond disbursements?
Four: Should an exception nonetheless still be made for employed lawyers acting for a party, and, if so, on what basis should their costs be determined?

Download the full paper below.