Whether security required from law practice with benefit of a group costs order
Quick Take
1A law practice with the benefit of a group costs order under s 33ZDA of the Supreme Court Act 1986 (Vic) is analogous to a litigation funder for security for costs purposes in that both stand to make a commercial profit calculated as a percentage of any settlement or award, but differs because the law practice is directly exposed by statute to adverse costs orders and security for costs obligations — distinguishing the position from a solicitor acting on a no-win no-fee basis with an uplift fee tied to actual legal costs.
2Under ss 33ZDA(2)(b) and 33ZF, the power to order security for costs is not conditioned on a 'reason to believe' threshold but on whether it is 'appropriate or necessary to ensure that justice is done'; however, if the evidence establishes a real or material risk that the law practice may be unable to meet an adverse costs order, it will generally be appropriate to order security, with all relevant circumstances considered.
3Security for costs applications in group proceedings should ordinarily be confined to one expert report per side, limited supporting evidence, and no more than half a day of hearing time, consistent with the overarching purpose and obligations under the Civil Procedure Act 2010 (Vic); expert financial modelling must be founded on assumptions with a rational connection to reality and must not omit material known positive cash flows.
