Unfair Court Costs !

Australia was the first country in the world to try and curb tobacco use by forcing cigarettes to be presented in plain packaging.  This was introduced by Julia Gillard's Labor government in 2011 and the big tobacco industry fought it vigorously.  Action in the lower courts eventually progressed to the High Court, with the result that big tobacco was defeated.

That should have been the end of the matter, but Philip Morris mounted a further legal challenge in the Singapore based international court.  This action invoked what is called " investor state dispute settlement " which is contained in an obscure Hong Kong Australia investment treaty.  This was settled in Australia's favour.

As many people have discovered to their dismay, a win in court can be financially damaging when the matter of " costs " is apportioned by the courts.   The Australian taxpayer had already spent $ 530,000 in non-refundable legal fees on this international court action when the cigarette manufacturer was ordered to pay half the Commonwealth legal fees.   Despite winning the case and being vindicated, the Australian taxpayer is left with a deficit of twelve million dollars.

" That's outrageous " , said former treasurer Wayne Swan, who had helped draft the plain packaging laws and was called to give evidence during secret hearings in 2015.  The fact that we had to fight a court case over this in the first place is an outrage.  Its just another example of why investor/state settlement clauses should not be entered into.

This does deliver a salutary lesson to the average person considering taking court action to redress a grievance.  Even if you win on every issue before the court and you are awarded " costs " that does not mean the vanquished is forced to pay your legal bill.   The court will decide what you will be reimbursed and that can have absolutely nothing to do with whatever bill your legal counsel has presented to you.

Legal counsel bill their fees according to the seniority they hold in the pecking order.   If you engage a Queens Council to head your case this will cost more than a lawyer far down the list of seniority. You have the expectation that a QC will be more articulate and have a closer understanding of the law and be likely to settle the matter in your favour.

The awarding of costs is a matter for the judge and some tend to be capricious.  It is not unusual for a judge to consider the merits of the case and conclude that the losing party did have a valid argument that caused costs to be shared.  The reason such cost allocations are made is not usually handed down at the case conclusion.

The only vindication for the Australian taxpayer is the certainty that losing this case cost the tobacco litigant an immense amount of money and that total is far more than it cost Australia.  In the past, big tobacco has fought tooth and nail to fend off any restriction to the profit pool that nicotine delivers.
These litigation costs can be measured against the steady decline of the smoking habit in this country. It seems that health improvements do come at a cost  !