If you win in court, does the other side automatically pay all your legal fees?

A common belief held by many Australians is that if they are forced to go to court and eventually win their case, the court will automatically order the losing party to reimburse them for every single dollar they spent on lawyers. This assumption leads many Gold Coast business owners and residents to initiate or defend civil litigation under the false impression that they carry zero financial risk.

In practice, the legal system’s approach to legal fees—known as “costs”—is far more complex, discretionary, and rarely results in a 100% financial recovery. Understanding how court costs are awarded and assessed in Queensland is critical before embarking on any legal battle.

The Discretionary Nature of Costs Orders

In Queensland’s civil courts (the Magistrates, District, and Supreme Courts), the general rule is that “costs follow the event.”¹ This means that the successful party is usually entitled to an order requiring the losing party to pay their costs.

However, this is not an absolute right. Section 15 of the Civil Proceedings Act 2011 (Qld) and the Uniform Civil Procedure Rules 1999 (Qld) (UCPR) make it clear that the award of costs is entirely at the court’s discretion.² A judge or magistrate has the power to:

• Make no order as to costs (meaning each party pays their own).
• Order a winning party to pay some of the losing party’s costs (if the winner acted unreasonably or dragged out proceedings).
• Award costs on a “standard” basis or an “indemnity” basis.

Standard vs. Indemnity Costs: The Reality of Recovery

When a court does award costs to the winner, they are almost always awarded on a standard basis (historically called “party and party” costs) unless there is a specific reason to award indemnity costs.³

Standard Basis Costs (The Default)

Under a standard costs order, the winning party is only allowed to recover costs that were “necessary or proper” for the attainment of justice or for defending their rights.⁴ These costs are assessed by a court-appointed Costs Assessor according to strict, regulated schedules or “scales of costs” set out in the UCPR.

These scale fees are heavily discounted compared to the actual market rates charged by commercial solicitors and barristers. As a general rule of thumb:

[!IMPORTANT] A standard costs order typically only recovers between 50% and 70% of the actual legal fees you paid to your lawyer. You remain personally responsible for paying the remaining gap (known as “solicitor-and-own-client costs”) out of your own pocket.

Indemnity Basis Costs (The Exception)

An indemnity costs order allows the winning party to recover all of their actual, reasonably incurred legal fees.⁵ The court will only award indemnity costs in exceptional circumstances, such as:

1. The losing party brought a hopeless or frivolous case.
2. The losing party engaged in serious misconduct, abuse of process, or fraud.
3. The winning party made a formal, reasonable settlement offer (such as a Calderbank offer or a formal Offer to Settle under Chapter 9, Part 5 of the UCPR) which the losing party rejected, only for the court to subsequently award the winner an outcome equal to or better than that offer.

Court Costs: Standard vs. QCAT vs. Indemnity

The table below outlines how legal expenses are recovered across different forums and order types in Queensland:

The Special Case: QCAT’s “No-Costs” Default Rule

For disputes involving smaller amounts (such as minor debt recovery, consumer claims, or residential tenancy matters), parties will go to the Queensland Civil and Administrative Tribunal (QCAT) rather than a formal court.

Many people assume QCAT follows the civil courts’ “loser pays” principle. In fact, it is exactly the opposite:

[!WARNING] Under Section 100 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld), the default position is that each party to a proceeding must bear their own costs.⁶

QCAT is intentionally designed as a low-cost, self-represented tribunal where people do not need lawyers. While the Tribunal does have the power to award costs in “exceptional circumstances,” it rarely does so. Simply winning your case in QCAT is not considered an exceptional circumstance. As Andrew Bell pointed out in Episode 15, if you spend $5,000 on a solicitor to win a $4,000 claim in QCAT, you will likely receive a judgment for the $4,000 and the initial filing fee, but you will still be $5,000 out of pocket for your lawyer.

Enforcing a Costs Order: The Hidden Challenge

Even if you secure a standard or indemnity costs order in the District or Supreme Court, your financial recovery is not complete. A costs order is merely a piece of paper—it is not cash in the bank.

To actually recover the money, you must:

1. Assess the Costs: If the other side does not agree on the amount, you must hire a Costs Assessor to draft a formal costs statement, which can take weeks and cost thousands of dollars upfront.
2. Pursue Enforcement: If the losing party refuses to pay, has no assets, or goes bankrupt, you must initiate enforcement proceedings (such as a warrant for seizure of property or enforcement hearings) which cost more money and carry no guarantee of success.⁷

Related Topics

• Queensland Court and Tribunal Hierarchy
• Enforcing QCAT Decisions in Queensland
• Why a Consultation is Needed for Costs Estimates
• General Law Practice Area

Secure Strategic Guidance

Civil litigation is a financial risk. Before deciding to sue or defend a claim, it is essential to have a realistic assessment of what you will actually recover, even in a best-case scenario. At Bell & Senior Lawyers, we provide practical, plain-English advice and cost disclosures to help you make informed business decisions.

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