Motor Accident Injuries (ACAT Costs Orders) Regulation 2020

Several defined terms are central to how the Regulation operates. Costs are defined in section 6(6) as the fees, disbursements and expenses that ACAT considers necessary for the preparation of and appearances in relation to an application for external review. This is not an open‑ended definition: ACAT must be satisfied the items are necessary, not merely that they were incurred. The definition links directly to the condition in section 6(2)(b)(i) that the costs must have been reasonably incurred. Itemised details are defined as details of (a) the legal costs payable by the party to its lawyer, clearly identifying which amounts are legal fees and which are disbursements, and (b) other fees or expenses incurred by the party in relation to the external review application. This requirement imposes a documentary burden on the applicant; ACAT cannot consider a request without such itemisation. AWE indexed is a term defined in the MAI Act dictionary and cross‑referenced in section 5 of the Regulation, which sets the indexation day as 1 October. The effect is that the $4,000 cap will be adjusted annually by the change in average weekly earnings, preventing the real value of the cap from eroding. Input tax credit is defined by reference to the Commonwealth A New Tax System (Goods and Services Tax) Act 1999. This interacts with the GST treatment of costs: the maximum amount includes GST, but the requesting party’s entitlement to input tax credits reduces the amount payable by the other party. The ACAT filing fee is specifically limited to the fee for filing an application; fees for additional hearing days are explicitly excluded from the maximum. The transitional concept in section 7 refers to an application made but not finally decided before the commencement day of the 2025 amendment. That preserves the pre‑amendment version of section 6 for those applications. The terms ACAT reviewable decision and external review are not defined in the Regulation but adopt the meanings from the MAI Act. The Regulation also cross‑references the Legislation Act 2001 definitions for ACAT, GST and proceeding. All of these concepts together shape the scope and limits of costs recovery.

The Regulation directly affects any party to an ACAT external review proceeding under the MAI Act. In practice, the two most common parties are a person injured in a motor accident (the claimant) and the insurer liable under the compulsory third party insurance scheme. The claimant will typically be the party seeking legal representation to challenge an insurer’s decision, and the insurer will be the respondent. Both are entitled to seek a costs order against the other - the requesting party may be either the claimant or the insurer. The Regulation also affects lawyers and legal firms who act for parties; they must itemise their fees and disbursements to meet the statutory requirement. The ACAT itself is affected because it has a discretionary power to make costs orders, but only upon a request and only if the statutory conditions are satisfied. The ACAT registry must process requests and set timeframes for provision of itemised details. The Regulation imposes compliance burdens on all parties: claimants must keep detailed records of legal costs, disbursements and expenses; insurers must maintain records of their own legal costs if they seek a costs order. The Regulation does not impose any obligations on third parties such as witnesses or medical experts. The maximum cap constrains the financial exposure of the losing party, which benefits both insurers (who are the typical respondents) and claimants (who might be ordered to pay if they lose). Because the cap is AWE indexed, its real value gradually increases, affecting the long‑term cost exposure of respondents. The transitional provision in section 7 preserves the old regime for applications already pending on 19 December 2025, meaning that parties to those proceedings will not be subject to any changes introduced by the 2025 amendment (which increased the cap from an unspecified lower amount or other modifications). The expiry of the transitional provision after 18 months means that, from mid‑2027, all proceedings will be subject to the current version of section 6.

The Regulation creates a right in any party to an external review proceeding to request a costs order from ACAT at any time during the proceeding. This right is exercisable only by a party, not by ACAT on its own motion. The requesting party bears the duty to provide itemised details of its costs within a time that ACAT considers appropriate. ACAT has no obligation to accept late or incomplete itemisation. ACAT then has a discretionary power, not a duty, to make the costs order if it is satisfied on reasonable grounds of four conditions: (i) the itemised details show the costs were reasonably incurred; (ii) the costs relate only to the preparation of and appearances in relation to the external review application; (iii) if a previous costs order was made in the same application, the total of all costs orders does not exceed the maximum amount; and (iv) it is appropriate to make the order. The discretion means ACAT can refuse an order even if the conditions are technically met, based on the overall appropriateness. The Regulation does not specify criteria for appropriateness, so ACAT retains broad discretion, which may lead to inconsistency. The duty to reduce the payable amount by any input tax credit imposes an obligation on the requesting party to account for its GST position. If the requesting party is entitled to an input tax credit on any part of the costs, that amount must be subtracted from the costs order. This prevents double recovery: the requesting party gets the GST component from the cost order but then claims an input tax credit from the ATO, so the net recovery would exceed actual costs. The other party has the right to challenge the itemised details before ACAT: for example, arguing that particular costs were not reasonably incurred or did not relate only to the external review application. The maximum amount acts as a cap on the total exposure. The other party also benefits from the requirement that the maximum includes GST, but then is reduced by the input tax credit - this means the payer does not bear the full GST amount. The Regulation does not provide any right to costs for internal reviews or original decision‑making; it is confined to external reviews.

The Regulation does not itself create any criminal offences or prescribe monetary penalties for non‑compliance. It operates within the civil jurisdiction of ACAT. The primary enforcement mechanism is through the costs order itself: if a party fails to pay a costs order made by ACAT, that order can be enforced as a civil debt in the same manner as any other ACAT order. The MAI Act and the ACAT Act would govern enforcement, but the Regulation says nothing further on this point. There are no penalty units, no fines, and no infringement notices in the Regulation. The only potential penalty is indirect: a party that deliberately inflates its costs or provides misleading itemised details may be subject to costs being disallowed or reduced, and possibly to adverse findings by ACAT. Because the Regulation requires ACAT to be satisfied on reasonable grounds that costs were reasonably incurred, a party that exaggerates its costs risks having its request entirely refused. There is no express power for ACAT to penalise a party for unreasonable conduct in relation to costs, but the general discretion to refuse an order if it is not appropriate provides a backstop. The Regulation does not refer to interest on unpaid costs orders; interest would be determined by ACAT’s general powers or by the MAI Act. The transitional provision in section 7 expires after 18 months, after which the old regime no longer applies. If a party fails to request a costs order during the proceeding, it loses the right; the Regulation does not permit a retrospective request after finalisation of the external review. The absence of automatic costs shifting means that a successful party who fails to request an order during the proceeding bears its own costs. This creates a procedural trap for inexperienced parties. The Regulation also does not provide for costs to be awarded on an indemnity basis; the maximum cap ensures that costs are limited to the standard base amount.

The Regulation is made under the Motor Accident Injuries Act 2019, in particular section 198(4) of that Act, which authorises the making of regulations about costs of proceedings in ACAT on external review. The Regulation must be read as part of the MAI Act framework. The MAI Act itself defines terms such as ACAT reviewable decision and AWE indexed, which are cross‑referenced in the Regulation. The MAI Act also establishes the compulsory third party insurance scheme and sets out the rights and obligations of claimants and insurers. The Regulation interacts with the ACT Civil and Administrative Tribunal Act 2008 (the ACAT Act). The ACAT Act generally provides that each party bears its own costs unless another law provides otherwise. The Regulation is that other law: it creates an exception to the general no‑costs rule for MAI Act external reviews. However, the Regulation does not set aside the ACAT Act’s procedural rules; ACAT’s power to set timeframes for provision of itemised details would be exercised under its general procedural powers. The Regulation also interacts with the Commonwealth A New Tax System (Goods and Services Tax) Act 1999 through the definition of input tax credit and the GST‑adjustment mechanism. The Regulation mandates that the maximum amount includes GST, meaning the cap is gross of GST, but then requires reduction by any input tax credit. This aligns with the GST system: the requesting party cannot profit from the tax component. The Regulation also interacts with the Legislation Act 2001, which governs the making, interpretation and republication of subordinate laws. Notes and definitions in the Regulation rely on the Legislation Act. The indexation of the $4,000 amount under section 5 interacts with the average weekly earnings data published by the Australian Bureau of Statistics. The indexation day of 1 October means the cap updates annually from that date. The transitional provision in section 7 interacts with the 2025 amending regulation (SL2025-30) to ensure that pending applications are governed by the prior version of section 6, avoiding retroactive change. The Regulation does not interact directly with court rules; external reviews are exclusively in ACAT, so court costs regimes under the Court Procedures Rules do not apply.

The Regulation was originally made as SL2020-10 and notified on the ACT legislation register on 26 March 2020. Sections 1 and 2 commenced on 26 March 2020; the remainder commenced on 27 March 2020. The original version of section 6 set out the costs‑order mechanism, though the precise maximum amount and other details may have differed. The only amendment to date is by the Motor Accident Injuries (ACAT Costs Orders) Amendment Regulation 2025 (No 1) (SL2025-30), notified on 18 December 2025. Sections 1 and 2 of the amending regulation commenced on 18 December 2025; the remainder, including the substantive amendments to section 6 and the insertion of section 7, commenced on 19 December 2025. The amendment history endnote records that section 6 was amended by SL2025-30 section 4, and section 7 was inserted by SL2025-30 section 5. The transitional section 7 expires on 19 June 2027, 18 months after the commencement day. The purpose of the amendment is not stated in the Regulation text, but the transitional provision suggests the changes were significant enough to justify preserving the old rule for pending applications. The amendment history also notes that section 2 (commencement) was omitted. This is not a substantive amendment but a formal deletion under section 89(4) of the Legislation Act. The republished version before me is Republication No 2, effective 19 December 2025, reflecting the 2025 amendment. There is no litigation history recorded in the Regulation itself; any judicial interpretation of section 6 would not be reflected in the text. The amendment history indicates only two instruments: the original and the 2025 amendment. No other amendments have been made. The Regulation’s amendment history is thus very simple, but the presence of a transitional provision indicates that the 2025 changes were more than minor. The indexation day in section 5 has not been amended; it remains 1 October. The dictionary was included from the original. The notes in the Regulation also reference the Legislation Act and are explanatory only.

The Regulation text does not include any references to case law, and no cases are named in the source. However, one can infer that the operation of section 6 has likely been the subject of disputes in ACAT concerning the meaning of “reasonably incurred”, the sufficiency of itemised details, and the calculation of the maximum amount including GST and input tax credits. The ACAT would have had to interpret these provisions in the context of specific reviews. The broad discretion to decide whether it is “appropriate” to make an order potentially gives rise to arguments about the conduct of the parties, the complexity of the review, and the relative strength of the case. Because the Regulation is a subordinate law, it may also be challenged in the Supreme Court on judicial review grounds for unreasonableness or jurisdictional error, but again the source does not record any such litigation. The transitional provision in section 7 may also generate litigation over whether an application was “made but not finally decided” before the commencement day. This issue could require ACAT to determine the exact status of pending applications as at 19 December 2025. The Regulation’s interaction with the MAI Act may also be litigated if a party argues that the Regulation is ultra vires the enabling power in section 198(4) of the MAI Act, but there is no mention of such a challenge. For the purpose of this deep dive, the important point is the absence of recorded litigation history, which may indicate that the costs regime is relatively uncontroversial or that disputes are resolved at the ACAT level without appeal. The Regulation is narrow and prescriptive, reducing scope for litigation. Nonetheless, lawyers advising clients should anticipate that ACAT may be called upon to interpret the requirement that costs “relate only” to preparation and appearances - this could exclude costs of settlement negotiations, internal reviews, or work on ancillary matters.

Several features of the Regulation may trap unwary practitioners. First, the maximum amount of $4,000 AWE indexed is inclusive of GST; but the amount actually payable is reduced by the requesting party’s input tax credit. This means that a party entitled to a full input tax credit will recover less than the GST‑inclusive cap. If a party fails to disclose its input tax credit entitlement, ACAT may still be required by the Regulation to reduce the order - and the other party would be wise to raise this. Second, the cap applies to the total of all costs orders in the same application. If a party obtains a partial costs order earlier, any subsequent order is limited to the remainder of the cap. This could create strategic incentives to request costs early, before the cap is exhausted. Third, the cap does not include fees for additional hearing days, which are explicitly excluded. This means that if an external review requires multiple hearing days, the costs of those extra days are not recoverable under the Regulation. The party incurring such costs bears them entirely. Fourth, itemised details must be provided within a time ACAT considers appropriate. ACAT may set a very short deadline, and failure to comply bars the order. Practitioners must prepare itemisations promptly and keep running records. Fifth, the Regulation applies only to external reviews of ACAT reviewable decisions. Costs incurred at earlier stages - internal review of an insurer’s decision, pre‑litigation correspondence, or any other work - are not recoverable under this mechanism. Sixth, the requesting party can be either the claimant or the insurer, so a claimant who loses an external review may be ordered to pay the insurer’s costs, up to the cap. This creates a financial disincentive to pursue review if the claim is weak. Seventh, the transitional provision preserves the old version of section 6 for applications pending on 19 December 2025. If a party had already spent time and money under the old regime, the new cap and conditions do not apply. But the transitional provision expires on 19 June 2027, after which any pending proceedings (if still not finalised) would automatically fall under the new regime - this is a sunset trap. Eighth, the definition of costs requires that they be “necessary”. A party may incur costs that are helpful but not strictly necessary; those are excluded. ACAT will likely scrutinise this. Ninth, the Regulation does not provide for costs on an indemnity basis or for costs of the costs application itself. The time spent preparing and arguing the costs request may not be recoverable separate from the general cap.

A party seeking a costs order under the Regulation must take several affirmative steps during the external review proceeding. First, the party must request the order at any time before the proceeding concludes; a request after finalisation is untimely. The request should be made explicitly to ACAT, preferably in writing, identifying the other party. Second, the party must prepare and provide itemised details of its costs within the time ACAT directs. The itemisation must separately show legal fees and disbursements, and also include any other fees or expenses incurred. It must be sufficiently detailed to allow ACAT to determine that the costs were reasonably incurred. Third, the party must ensure the costs relate only to preparation for and appearances in the external review. Time spent on internal review, correspondence with the insurer not directly related to the external review, or work on other matters should be excluded. Fourth, the party must calculate the total amount claimed against the maximum: the sum of all costs orders in that application must not exceed $4,000 (AWE indexed as at 1 October each year) plus the ACAT filing fee for the application (not including fees for additional hearing days). The party should check the current indexed amount. Fifth, the party must consider its GST position: if the party is entitled to an input tax credit for any part of the costs, the amount claimed must be reduced accordingly. The party should keep records of its GST registration and entitlement. Sixth, the party should present evidence to satisfy ACAT that the order is appropriate - this may involve showing the complexity of the review, the conduct of the other party, or that the costs are proportionate. A party resisting a costs order can challenge the itemised details: arguing that specific items were not reasonably incurred, not necessary, or relate to matters outside the external review. The resisting party should also check that the requesting party has reduced the amount for input tax credits, and that the total does not exceed the cap. Parties should be aware that ACAT retains discretion; even if all conditions are met, the order may be refused. The transitional provision requires parties to proceedings commenced before 19 December 2025 to check which version of section 6 applies. Legal practitioners should notify clients about these limits early in the representation, so that clients can manage their expectations about cost recovery and exposure. Compliance also involves record‑keeping: maintaining contemporaneous time records, invoices, receipts, and a clear breakdown of fees versus disbursements.