Cost is a critical element in access to justice.
It is a fundamental barrier to those wishing to use the litigation system. The Commission was asked to review the impact on the litigation system of the costs allocation rules the laws and practices that determine who pays the legal costs incurred by the parties to court and tribunal proceedings. The two best known rules are the 'loser pays' rule, which is the rule most commonly applied in civil proceedings, and the rule that each party bear his or her own costs, which is the starting point in family law proceedings. The Commission found that the costs allocation rules sometimes operate unfairly and can deny access to justice. In particular, the 'loser pays' rule can deter people from pursuing meritorious claims or defences because of the risk of having to pay a portion of the other party's costs if unsuccessful.