A costs order is a court direction that one party must pay another party’s legal costs. In estate litigation, that simple definition gets complicated fast — because courts regularly depart from the usual rule that the loser pays, and the estate itself can sometimes foot the bill. Understanding how costs orders work is the first practical step for any executor, beneficiary, or applicant facing a disputed estate.
Immediate next steps if you’ve received or expect a costs order:
- Read the order wording carefully — it will specify the basis (ordinary or indemnity) and who pays whom.
- Ask your lawyer for an itemised bill as soon as possible.
- Get a written estimate of the total amount likely to be assessed.
- Try to agree on the amount and a payment timetable before triggering formal assessment.
- Note the time limit for applying for formal assessment in your state — in NSW, the Legal Profession Uniform Law sets a general 12-month window from the date of the costs order.
Jurisdiction matters. NSW calls the process “costs assessment” under the Legal Profession Uniform Law. The ACT uses “taxation.” Victoria and South Australia have their own procedural rules under their respective Civil Procedure Acts and court rules. Time limits and forms differ, so confirm the process for your state before you act.
This article is general information, not legal advice. Confirm the current rules with a qualified lawyer for your specific situation.
Table of Contents
- How do Australian courts decide costs orders in estate disputes?
- What types of costs orders exist, and who is liable?
- How is the dollar amount fixed after a costs order?
- How do you limit your exposure to paying legal costs?
- What fee structures do estate litigation lawyers use?
- What should you do immediately after a costs order?
- Funding your legal matter — No Win, No Fee
- When do courts grant indemnity costs orders in estate litigation?
- How do you negotiate a costs agreement before litigation begins?
- What are the time limits for seeking costs assessment?
- How do you request a costs order, and what documents do you need?
- Key takeaways
- The costs conversation nobody wants to have
- Simons George Legal: practical help with estate litigation costs
- Useful sources and further reading
- FAQ
How do Australian courts decide costs orders in estate disputes?
Courts have broad discretion over costs, and while the default rule is that costs follow the event — the loser pays — estate matters attract exceptions more often than most areas of civil litigation.
The governing instruments vary by state. In NSW, section 98 of the Civil Procedure Act 2005 gives the court full power to determine by whom, to whom, and to what extent costs are paid. The Uniform Civil Procedure Rules (UCPR) and the Legal Profession Uniform Law then govern how amounts are assessed. Victoria’s equivalent framework sits in the Supreme Court (General Civil Procedure) Rules 2005 and the County Court Civil Procedure Rules 2008.
Judicial factors that commonly influence a costs decision include:
- Party conduct — delays, withholding evidence, or pursuing unmeritorious claims all attract scrutiny.
- Whether the litigation was reasonably necessary for estate administration or to clarify testamentary intentions.
- Proportionality — courts weigh costs against the value of the estate and the result achieved.
- Success on particular issues — a party who wins on family provision but loses on probate may receive a split order.
- Whether the testator caused the dispute — ambiguous wills or erratic conduct by the deceased can shift costs to the estate.
NSW, VIC, and SA courts all apply the “testator’s fault” exception, but the threshold differs in practice. Victorian courts have historically been slightly more willing to order estate reimbursement in ambiguous-will cases; NSW courts have tightened the test, requiring clear evidence that the deceased’s conduct actually caused the litigation.
What types of costs orders exist, and who is liable?
Knowing which type of order you’re facing changes everything about how you respond.
- Ordinary (party/party) costs — the most common order. The paying party covers the costs “necessary or proper” for the other side to participate in proceedings, assessed against a court scale. This rarely covers the winner’s full legal bill.
- Indemnity costs — a broader order covering all costs except those unreasonably incurred. Courts award these where a party has behaved improperly, rejected a reasonable settlement offer, or pursued a claim with no real merit.
- Costs from the estate — the estate itself pays, rather than a party personally. Executors acting in good faith in probate and estate administration typically recover costs from the estate on an indemnity basis, whether they win or lose.
- Costs in the cause / reserved costs — the court defers the costs decision until the end of proceedings. Common in interlocutory applications.
- Security for costs — a court order requiring a party (often a plaintiff with limited assets) to pay a sum into court before proceedings continue, protecting the other side if costs are ultimately awarded.
Warning on small estates. When an estate is modest, litigation costs can consume legacies entirely. Courts are alive to this: in Wilson v Wright [2024] NSWSC 616, the court capped recoverable costs and fixed a gross sum to prevent disproportionate depletion of the estate. A gross sum order replaces the full assessment process with a fixed dollar figure — cleaner for both sides, and increasingly common in NSW.
Pro Tip: If you’re an executor, confirm early whether your costs agreement with your lawyer entitles you to indemnity costs from the estate. Many executors don’t realise this protection exists until after they’ve paid personally.
How is the dollar amount fixed after a costs order?
A costs order doesn’t come with a dollar figure attached. Converting it to an amount you can actually pay or enforce requires either agreement or a formal process.
- Request an itemised bill from the other party’s lawyers promptly after the order is made.
- Attempt to agree on the total amount and a payment timetable. Most disputes settle here.
- Apply for formal assessment or taxation if no agreement is reached. In NSW, apply to the Supreme Court costs assessors under the Legal Profession Uniform Law within 12 months of the costs order. The assessor examines reasonableness and proportionality — not just the invoice total.
- Obtain the assessment certificate once the assessor issues it.
- Register the certificate as a judgment if the paying party refuses to pay, then enforce through standard judgment enforcement mechanisms (garnishee orders, writs of execution, or in extreme cases, bankruptcy proceedings).
| Jurisdiction | Process name | Approximate time limit to apply |
|---|---|---|
| NSW | Costs assessment (Legal Profession Uniform Law) | 12 months from costs order |
| ACT | Taxation | 3 months from costs order |
| VIC | Taxation (Supreme Court Rules) | Confirm with Supreme Court of Victoria |
| SA | Taxation (District/Supreme Court Rules) | Confirm with relevant court |
Documents typically needed for assessment: the costs agreement, all invoices, time sheets, disbursement receipts, the court orders, and any correspondence about the costs dispute.
Pro Tip: Negotiate a payment timetable before applying for formal assessment. Assessment takes time and costs money — interest may run from the date of the original order, so the longer you wait, the more expensive the dispute becomes.
How do you limit your exposure to paying legal costs?
There are concrete steps that genuinely reduce cost risk, and most of them work best before the matter reaches a contested hearing.
The single most effective tool is a properly drafted settlement offer. Rejecting a reasonable offer can backfire badly: under the UCPR offer of compromise regime, a party who obtains a judgment no better than an offer they rejected may face indemnity costs from the date of that offer. A Calderbank offer operates similarly — it’s a without-prejudice offer that can be shown to the court on costs, and courts treat an unreasonable rejection as a factor warranting adverse costs. See the estate litigation settlement options guide for how to structure these offers effectively.
Other practical steps:
- Propose early mediation — courts expect parties to use it, and the NSW benchbook treats failure to mediate as a relevant factor on costs.
- Keep your instructions narrow. Scope creep drives costs; every interlocutory application adds to the bill.
- Avoid duplicated representation where multiple beneficiaries share the same interest.
- Ask your lawyer for a costs cap or regular estimate updates in writing.
Red flags that attract personal or indemnity orders: unnecessary delays, withholding documents, pursuing claims the evidence doesn’t support, making allegations of fraud or undue influence that aren’t proved, and dishonest conduct at any stage.
What fee structures do estate litigation lawyers use?
Lawyers charge in several ways, and the structure affects your total exposure significantly.
- Hourly rates — standard for contested hearings and complex interlocutory work. Rates vary by seniority and firm. Disbursements (court filing fees, expert reports, barrister fees) are charged on top.
- Fixed fees — common for discrete tasks like straightforward probate applications or drafting a single affidavit. Predictable, but usually not available for full contested hearings.
- Conditional fee arrangements — sometimes called “No Win, No Fee.” Available for eligible inheritance disputes. The lawyer takes the risk of non-payment if the matter is unsuccessful; the client pays if successful. A written costs agreement is required.
Main cost drivers: court appearances, expert evidence (medical experts in capacity cases, valuers in property disputes), volume of documents, interlocutory applications, and the length of the final hearing.
Questions to ask at your first meeting:
- What is your estimate for each stage, and what triggers a revised estimate?
- Is a costs cap available for any part of the matter?
- How often will you bill, and what disbursements should I budget for?
- Will you provide a written costs agreement before work starts?
- What happens to costs if we settle early?
What should you do immediately after a costs order?
Act promptly. Interest can run from the date of the order, and enforcement costs compound quickly if you delay.
- Confirm the exact wording of the order — basis, parties, and any specified amount or percentage.
- Request an itemised bill from the other side within days, not weeks.
- Attempt agreement on the total and a payment timetable.
- Apply for assessment or taxation if no agreement is reached within a reasonable period, and watch the time limit for your state (see the table above).
- Register the assessment certificate as a judgment once issued.
- Consider enforcement if the paying party still refuses: garnishee orders, writs of execution, or bankruptcy/liquidation steps for larger amounts.
If you’re the party owed costs, keep detailed records of all costs incurred and move quickly. An inheritance dispute documentation checklist can help you organise the paperwork before you approach an assessor.
Funding your legal matter — No Win, No Fee
The upfront cost of estate litigation stops many people with legitimate claims from getting proper advice. Simons George Legal offers conditional “No Win, No Fee” arrangements for eligible estate litigation matters, including contested wills, family provision claims, and executor disputes.
Eligibility is assessed during a free initial consultation. If your matter qualifies, you won’t need to pay legal fees upfront — the firm takes on the financial risk alongside you. That removes the barrier for people who have a strong claim but limited cash to fund a contested hearing.
To find out whether your matter is eligible, book a free case assessment with Simons George Legal. The consultation takes 30 minutes and gives you a clear picture of your position and funding options before you commit to anything.
No Win, No Fee arrangements are subject to case eligibility and a written costs agreement. Liability limited by a scheme approved under Professional Standards Legislation.
When do courts grant indemnity costs orders in estate litigation?
An indemnity costs order is the court’s sharpest costs tool. It covers all of the successful party’s costs except those unreasonably incurred — a significantly broader recovery than ordinary party/party costs.
Courts grant indemnity orders in estate matters in several circumstances. An executor acting in good faith to defend or administer the estate typically recovers costs on an indemnity basis from the estate, win or lose. In Wheatley v Lakshmanan (No 2) [2022] NSWSC 851, the executor was entitled to recoup costs on the indemnity basis from the estate, while the plaintiff received only a capped fixed amount on a party/party basis, illustrating the different treatment courts apply.
Where a party rejects a valid offer of compromise and the final judgment is no better than that offer, the UCPR entitles the offeror to indemnity costs from the day after the offer was made. In Mills v Dodds (No 2) [2026] NSWSC 44, the court ordered the defendant’s costs on the indemnity basis precisely because a reasonable offer of compromise had been rejected without good reason.
Indemnity orders also arise from serious misconduct: pursuing fraud or undue influence allegations without adequate evidence, deliberate delay, or misleading the court. The bar is high, but the consequences are severe — indemnity costs can dwarf ordinary costs in a lengthy hearing.
How do you negotiate a costs agreement before litigation begins?
The costs agreement you sign before a lawyer starts work is one of the most important documents in the whole matter. Under the Legal Profession Uniform Law (NSW and VIC), lawyers must provide a costs disclosure before or as soon as practicable after being retained. That disclosure must include an estimate of total costs or, if an estimate isn’t possible, the basis on which costs will be calculated.
Use that disclosure as a starting point for negotiation, not a take-it-or-leave-it document. Practical points to raise:
- Ask for a staged estimate — costs to mediation, costs to hearing, costs to appeal — so you can make a decision at each stage.
- Request a costs cap for the first stage, with a review before proceeding further.
- Clarify what triggers a revised estimate and how quickly you’ll be notified.
- Confirm the billing interval (monthly is standard; fortnightly is common in active litigation).
- Ask whether a fixed fee is available for any discrete component (drafting affidavits, attending mediation).
A lawyer who won’t give you a written estimate or a costs cap for at least the first stage is a red flag. The inheritance dispute legal costs breakdown guide covers what reasonable costs look like at each stage of NSW estate litigation.
What are the time limits for seeking costs assessment?
Time limits for costs assessment are strict and vary by jurisdiction. Missing them can mean losing the right to have costs formally assessed altogether.
In NSW, the Legal Profession Uniform Law sets a general 12-month period from the date of the costs order (or the date of the bill, depending on the circumstances) to apply for assessment. The Supreme Court costs assessors handle the process administratively. If the 12 months passes without an application, you may need leave of the court to proceed — not guaranteed.
In the ACT, the taxation process must generally be initiated within 3 months of the costs order. Victoria and South Australia operate under their own court rules; check the relevant Supreme Court website for current timeframes before assuming NSW rules apply.
Interest on unpaid costs typically runs from the date of the court order, not the date of assessment. That means delay costs the paying party more, and the receiving party has a financial incentive to move promptly.
How do you request a costs order, and what documents do you need?
Costs are usually dealt with at the end of a hearing, but you need to be ready to make submissions on costs at that point — courts don’t automatically make orders without a request.
At the hearing:
- Raise costs in your closing submissions or immediately after judgment.
- Specify the basis you’re seeking (ordinary or indemnity) and give brief reasons.
- If relying on a Calderbank offer or offer of compromise, hand up the offer document and confirm the judgment is more favourable than the offer.
After the hearing:
- File a Notice of Motion if costs were reserved and you need to bring them back before the court.
- In NSW, use the standard Supreme Court forms available on the NSW Courts website; in VIC, use the Supreme Court of Victoria’s forms portal.
For formal assessment in NSW:
- Complete the Application for Assessment of Costs (costs assessor’s office, Supreme Court NSW).
- Attach the costs agreement, all invoices, time sheets, disbursement receipts, and the court order.
- Pay the filing fee (check the current fee schedule on the NSW Supreme Court website).
- Serve the application on the other party.
Keeping organised records throughout the litigation makes this process far less painful. A structured documentation checklist helps ensure nothing is missing when you apply.
Key takeaways
Costs orders in estate litigation turn on judicial discretion, not a simple winner-pays rule — and acting quickly after an order is made is important to protect your rights and the estate.
| Point | Details |
|---|---|
| What a costs order does | It directs who pays whose legal costs; the estate, a party personally, or both may be liable depending on the circumstances. |
| Time limits are strict | In NSW, apply for costs assessment within 12 months of the order; in the ACT, within 3 months — missing these deadlines can forfeit your rights. |
| Indemnity costs are the exception | Courts grant indemnity orders for rejected reasonable offers, executor good faith, or serious misconduct — not as a default. |
| Settlement offers reduce risk | Rejecting a reasonable Calderbank offer or offer of compromise can result in indemnity costs backdated to the offer date. |
| Simons George Legal | Offers free initial consultations and No Win, No Fee arrangements for eligible estate litigation matters across Sydney and NSW. |
The costs conversation nobody wants to have
Estate litigation costs are the subject most clients want to avoid until they can’t. That’s understandable — nobody starts a dispute expecting to spend years in court. But the parties who manage costs best are the ones who confront the numbers early, before a hearing date is set.
The conventional wisdom is that the estate will cover everyone’s legal costs if the dispute was “reasonable.” That’s a dangerous assumption. Courts have tightened the testator’s fault exception significantly over the past decade, and practitioners who advise clients to weigh costs against the estate value before litigating are giving genuinely sound advice. In a modest estate, a contested hearing can leave beneficiaries with nothing — and the lawyers as the only winners.
What’s often underestimated is how much leverage a well-timed settlement offer gives you. A Calderbank offer made early, at a realistic figure, shifts the costs risk to the other side. If they reject it and the court awards you less, they wear the indemnity costs from the offer date. That’s not a technicality — it’s a genuine negotiating tool that changes the economics of the dispute.
The other thing practitioners rarely say plainly: the costs assessment process is itself a form of litigation. Assessors examine reasonableness and proportionality, not just the invoice. A bill that looks reasonable to the party who incurred it can be reduced substantially on assessment. That cuts both ways — if you’re paying, it’s worth going through assessment rather than accepting the first figure you’re handed.
Simons George Legal: practical help with estate litigation costs
Estate litigation is expensive enough without navigating costs orders alone. Simons George Legal acts for executors, beneficiaries, and applicants across Sydney and NSW in contested wills, family provision claims, and executor disputes — with a focus on keeping costs proportionate to the estate and the outcome.
The firm advises on costs strategy from the first consultation: what basis to seek, how to structure settlement offers, when to apply for formal assessment, and how to enforce an award if the other side won’t pay. For eligible matters, No Win, No Fee arrangements are available, removing the upfront barrier for people with a legitimate claim.
Book a free 30-minute case assessment with Simons George Legal to get a clear picture of your costs exposure and your options before you take another step.
Useful sources and further reading
Primary sources and procedural references:
- Costs — Judicial Commission of NSW benchbook — discretion, bases of assessment, and proportionality guidance.
- Victorian Law Reform Commission — Costs rules in succession proceedings — comprehensive state-by-state framework.
- Wild v Meduri & Ors [2023] NSWSC 669 — allocation of costs across probate, trust, and family provision claims.
- Mills v Dodds (No 2) [2026] NSWSC 44 — offers of compromise and indemnity costs.
- Wheatley v Lakshmanan (No 2) [2022] NSWSC 851 — costs capping and executor indemnity.
- Guamani v Guamani (No 2) [2026] NSWSC 113 — proportional allocation of costs by issue.
- Who bears the costs in estate litigation? — Law Society Journal — practitioner commentary on cost-shifting exceptions.
- What is a Calderbank offer? — Law Society Journal — settlement offers and indemnity costs consequences.
| Resource | What it covers |
|---|---|
| NSW Supreme Court website | Current forms and fee schedules for costs assessment applications |
| Supreme Court of Victoria | Taxation forms and procedural rules |
| Legal Profession Uniform Law (NSW/VIC) | Costs disclosure obligations and assessment process |
| Simons George Legal — estate litigation | Contested wills, family provision, executor disputes |
| Simons George Legal — probate and estate administration | Executor costs recovery and administration guidance |
Always check the relevant Supreme Court or state court website for the most current procedural rules and forms — these change, and the version on a third-party site may be out of date.
FAQ
What does a costs order mean in estate litigation?
A costs order is a court direction specifying who must pay whose legal costs and on what basis (ordinary or indemnity). In estate disputes, the order may require a party to pay personally, or direct that costs be paid from the estate.
Does the estate always pay legal costs in a will dispute?
No. Courts often order the unsuccessful party to pay costs personally, particularly in adversarial disputes between family members. The estate pays only where the testator caused the litigation or where the proceedings were reasonably necessary for estate administration.
How much do lawyers charge for estate litigation in Australia?
Fees vary by complexity, seniority, and billing model. Hourly rates, fixed fees for discrete tasks, and conditional fee arrangements are all used. Disbursements — court fees, expert reports, barrister fees — add significantly to the total, and costs in a contested hearing can run to tens of thousands of dollars or more.
What is the time limit for costs assessment in NSW?
Under the Legal Profession Uniform Law, a party generally has 12 months from the date of the costs order to apply for formal assessment. Missing this deadline may require a court application for leave to proceed out of time.
What is a Calderbank offer and why does it matter for costs?
A Calderbank offer is a without-prejudice settlement offer that can be shown to the court when costs are decided. If the party who received the offer rejects it and the final judgment is no better than the offer, the court may order indemnity costs against that party from the date of the offer.