In Western Australia, whether you can recover legal costs after you commence court proceedings will depend on the size of your debt. You should carefully weigh up the costs of pursuing it against your likely return.
Debts over $10,000
If you obtain a court judgment against the debtor for $10,000 or more, the court will generally order that the debtor pay your legal costs. However, the amount you can claim from the debtor is limited by a regulatory scale. We estimate you will generally be entitled to recover about 80% of the fees we charge you and most of your disbursements (i.e. court filing fees and sheriff fees).
Debts under $10,000
If your debt is under $10,000, you ordinarily cannot recover any of the fees we charge you unless there are exceptional circumstances. This rule usually applies even if your contract says you are entitled to be reimbursed by your debtor for legal costs.
You are entitled to recover most of your disbursements and some of the legal costs you incur in enforcing any judgment you obtain (for example, for means inquiries and property seizure and sale orders).
Terms and conditions
A strong set of written terms and conditions of trade will increase the likelihood that you will be able to recover the debt and you legal costs. A charging clause may permit you to register a caveat in respect of any property owned by the debtor, effectively preventing them from selling or dealing with the property until they resolve your claim. Well drafted terms and conditions will also minimise any prospect of the debtor successfully challenging your claim.
We can review your existing set of trading terms or prepare a new set for you. Contact us for an obligation free quote.