Lord v Craig [2026] NSWSC 17 looks at whether proportionality can prevent legal costs from using up an estate. Justice Meek said the court must balance competing interests based on the facts. In inheritance disputes, this means weighing all relevant factors. The court should also keep in mind that emotions can sometimes outweigh the estate’s actual value.
Justice Meek made a prospective cost-capping order. There was no prior case involving a contested application like this. Hence, it was important to set out a clear framework for cost capping. It was also crucial to explain why this approach was adopted.
Early cost capping must be based on legal principles and a careful assessment of relevant factors, including proportionality. It should not be decided by set percentages or informal rules. This power helps make sure the goals of family provision law are met. A cost capping application needs enough information for the Court to make a fair judgment. Because of the process, exact precision is not possible or needed. There may be more than one reasonable outcome based on the evidence..
Prospective cost capping often depends on information that may be incomplete or uncertain, especially if requested early in the case. How uncertain things are will depend on when the application is made and what information is available. Still, the Court can make a capping order if there is enough material. Any risks can be managed by changing the order later. This ensures fairness. If the information is too limited or uncertain, the application may be refused. Alternatively, it may be adjourned for further information.
Lord v Craig [2026] NSWSC 17 deals only with a family provision claim. Other types of claims, like probate or trust matters, may involve extra considerations because they serve different purposes. The Court may agree to consent cost-capping orders at early stages, but it will not do so automatically. The Court must ensure that such orders are suitable, having regard to the nature and purpose of the case.
Family provision litigation tests whether a deceased made enough provision for an eligible applicant. Courts use a two-stage test: jurisdiction and sufficiency.
Two-Stage Test:
- Jurisdiction: Decide if the applicant qualifies under statutory criteria.
- Sufficiency: Check if the provision meets current social and community standards.
Courts decide entitlement using statutory rules, not the parties’ views. The Succession Act 2006 (NSW) allows judges to adapt as society changes.
Proportionality affects both outcomes and costs, especially in small estates. If costs are not controlled, they can defeat the purpose of family provision laws. Cost capping helps manage costs and supports fairness.
Courts rarely cap costs at the end of a case. It’s even less common for them to do so early on. This case appears to be the first contested example. A cost cap was set before the early steps were finished. It was also set before a final hearing. The decision could affect how courts handle litigation costs, especially for small estates.
Lawyers should check the size and value of the estate early to see if cost capping is needed. They should think about whether legal costs could use up the estate and defeat the purpose of family provision laws. Using a checklist or step-by-step process can help. Review asset lists, identify possible claims, and estimate likely legal costs. Early cost-capping orders can help keep costs in line with the estate’s value and protect assets for beneficiaries.
Procedural Steps for Cost-Capping Orders
Assess the estate’s value and costs at the case outset.
When applying for cost capping under UCPR r 42.4, CPA s 98(4), or the Court’s inherent jurisdiction, give detailed affidavits of costs incurred and realistic future cost estimates. If future costs are significant, tackle proportionality directly in submissions. Draft proposed orders if a cap is needed. Make sure the evidence is enough. Insufficient evidence can cause the order to be refused or deferred.
As a practitioner:
1) set clear expectations and plan with clients to manage costs early,
2) be transparent about limits of information at the outset,
3) explain that early cost capping can sometimes limit valid claims with incomplete evidence, and
4) update clients as new information arises. Balance cost control with ensuring access to justice by regularly communicating and revising recommendations.
Barry Lord died in May 2024, leaving a $135,000 net estate that was already distributed. Two of his five children now dispute the distribution. The plaintiff, who got nothing under the will, seeks a provision. The defendant executrix, who received everything, opposes. Legal costs already reached about $62,000, threatening to drain the estate further.
The defendant sought an order capping both parties’ costs prospectively. In granting the order, the Court emphasised that early-stage cost capping must be grounded in principle. It should not rely on rigid formulas or arbitrary percentages. The task is an evaluative judgment, informed by proportionality. The Court must guarantee that family provision jurisdiction is not undermined by high costs.
The Court recognised that prospective cost capping relies on incomplete or untested information. Despite this, the Court can make an order if the material is adequate for proper assessment. Any uncertainty risk is reduced by the Court’s ability to vary the order later. This ensures the case receives ultimate justice.
The Court acknowledged that in some cases the evidence may be too limited to justify early cost capping. In such instances, the application should be dismissed or deferred. Here, yet, the matter involved only a family provision claim, and there was enough material to assess proportionality.
The Court set a cost cap early to protect this small estate and prevent costs from overshadowing the main issues. This shows the Court is willing to act early to keep family provision cases fair and balanced.Cost Capping in Civil Litigation
Cost capping is a court order that limits how much legal costs one party can recover from another. The goal is to prevent high legal expenses and support access to justice. Different places use different terms, but the main idea is the same.
Terminology and Concepts
Cost capping terminology varies between jurisdictions. In New South Wales, it is often called a ‘maximum costs’ order, but ‘cost capping’ is also used. In Victoria and England, terms like ‘protective costs orders’ may refer to capping costs. These terms can also protect individuals acting in a representative capacity from personal liability. Understanding these terms helps clarify their application.
A distinction is drawn between:
Capping costs limits what can be recovered. Usually, the amount must be assessed after the case.
Fixing costs means the court sets the recoverable amount at the outset. No assessment is needed later.
Both capping and fixing costs help control legal expenses. Fixing costs is often more efficient because it avoids later assessments. In New South Wales, the term is ‘maximum costs’ order, while in Victoria, ‘protective costs orders’ may be used. This difference helps explain how cost control works in different places.
Proportionality is central to cost capping. The Civil Procedure Act 2005 (NSW) says legal costs should match the importance, complexity, and value of the case.
What is proportionate depends on the facts of each case. In simple or low-value disputes, there is a greater risk that costs will be excessive. In complex or high-value cases, higher costs may be justified.
Legislative Framework and Purpose
Cost-capping powers exist in several Australian jurisdictions and the UK. They were introduced to control rising litigation costs. When should a court intervene early to cap costs? This question highlights the courts’ discretionary power. In New South Wales, courts mainly use UCPR r 42.4 to cap costs, either on their own or upon request. The purpose is to resolve cases fairly, quickly, and at reasonable cost.
Cost capping helps prevent excessive litigation and controls costs. It supports access to justice, especially in public-interest cases. New South Wales uses a broad discretionary approach to cost capping. England and Wales use a slightly more structured framework under the Civil Procedure Rules Part 44.3. Here, the court must consider whether the cap is needed to keep costs proportionate. A comparative analysis of these approaches highlights the different judicial philosophies underlying their approaches to controlling legal expenses.
For example, in practice, New South Wales issues early cost-capping orders more freely. This occurs at earlier litigation stages. The goal is to prevent high litigation costs in small estates. In contrast, evaluating a more detailed assessment of proportionality before such an order is made. In England, the court must assess costs on either the standard or indemnity basis. It will not allow costs that are unreasonably incurred or are unreasonable in amount. On the standard basis, only costs that are proportionate to the matters in issue are allowed. Any doubt as to reasonableness or proportionality is resolved in favour of the paying party. This applies even where the costs were reasonably or necessarily incurred. On the indemnity basis, any such doubt is resolved in favour of the receiving party. If the court does not specify the basis of assessment, costs are assessed on the standard basis.
Proportionality is assessed by reference to several factors. These include the sums or relief in issue. They also encompass the complexity and conduct of the litigation. Wider considerations, like public importance, are included as well. Any extra work arising from vulnerability is also considered. Special regimes apply to non-contentious costs regulated under the Solicitors Act 1974. They also apply to proceedings or costs incurred before 1 April 2013. These are governed by the pre-April 2013 rules.
Understanding these jurisdictional nuances helps practitioners foresee how similar cases unfold in different legal environments. A lesson worth investigating from England’s structured budgeting is the emphasis on thorough proportionality assessments. Making cost-capping decisions more predictable and consistent. Such an approach ensures fair and just application of caps across varied cases.
Discretion and Application
Cost capping is a discretionary order made during a case. The court must estimate future costs and consider the interests and risks for everyone involved.
The court must decide if costs are, or might become, too high. Any cost cap must follow legal principles. The order can apply to one or more parties. Later changes are possible only for special reasons if justice requires.
Usually, cost capping only limits what one party can recover from another. It does not affect the costs between a client and their lawyer, except in special cases.
Family Provision Proceedings
Cost capping is especially important in family provision cases. Legal costs are often paid from the estate. High costs can reduce the amount left for beneficiaries, including those who did not cause them. Courts have recognised that high costs can defeat the purpose of family provision laws and allow litigation to drain estates.
In some cases, the court may also limit solicitor–client costs to protect the integrity of the family provision jurisdiction.
Cost capping is a key tool for courts. It helps balance fairness, proportionality, and access to justice, especially when legal costs might overshadow the main issues.
Proportionality and Family Provision Litigation
Proportionality is about balancing different concerns. What is ‘proper’ depends on the facts and must be decided case by case. Inheritance disputes often bring strong emotions that can go beyond the estate’s actual value.
Proportionality is central in family provision litigation. These cases emerge when a testator fails to make proper provision for an eligible person. This may also occur when the law of intestacy does not adequately address such provisions. The court, not the parties, decides what is adequate or proper, using the statutory framework. In practice, family disputes can lead to emotional investment that drives parties to spend more than the estate is worth. Recognising these dynamics helps explain why costs can become disproportionate.
Under Chapter 3 of the Succession Act 2006 (NSW), as with earlier family provision regimes, the legislation:
- states a broad statutory test,
- deliberately avoids defining “adequate” or “proper” provision in fixed terms, and
- leaves the application of the test to judicial evaluation based on the facts of each case.
Courts decide if a provision is adequate by looking at all the facts. They use their experience. They also consider current social values. This flexible approach lets the law adapt as society changes. The court’s decision is not just about money—it also considers relationships, fairness, and the bigger picture.
Courts accept that a capable testator usually understands family relationships. Still, the law says the court must decide what is proper at the time of the application. The court first decides what is proper, then checks if the will provides enough. The testator’s wishes matter but are not final.
Proportionality and Costs
Proportionality affects both the outcome and the legal costs in family provision cases. This is especially important when the estate is small. High legal costs can reduce the estate and defeat the purpose of the law. In Barry Lord’s estate, the projected legal costs were very high. They were estimated to be 122% of the estate’s value. This situation is like watching a house burn. There’s a relentless intent to pay the firefighters. It is an exercise in futility. This starkly illustrates how disproportionate costs can consume the estate’s assets. As a result, it undermines the purpose of the family provision legislation.
Cost capping helps stop costs from becoming disproportionate. Courts sometimes make capping orders at the end of family provision cases. It is rare for courts to cap costs early, before trial. There are very few reported cases where an early, contested cost-capping order has been made in this area.
In this case, the estate was small, about $135,000 in net assets. Legal costs already spent and expected would have used up the whole estate. The court decided a prospective cost cap was needed to protect the purpose of the family provision law.
Principles Governing Prospective Cost Capping
Early interlocutory cost capping:
- must be grounded in legal principle,
- involves an evaluative assessment rather than mechanical rules or fixed percentages, and
- provides family provision cases are not rendered pointless by high costs.
The court can make a cost cap even if the evidence is incomplete. This is allowed as long as there is enough information to decide. If the cap is later found to be wrong, the court can change it if needed for justice.
If details are too uncertain, the court may refuse or delay the application until more evidence is available. The court may consider different factors if other types of relief are requested. The court may agree to cost-capping orders, but will always review them independently due to its public and protective role. At the core of the court’s analysis is the principle of proportionality, which, although broadly employed, inherently varies with context. In inheritance disputes, proportionality necessitates balancing competing factors such as the emotional and financial stakes. However, bringing together this understanding into a unified strategy helps the court. It allows the court to make recommendations that control costs. It also streamlines case management.
Family provision litigation asks whether the deceased failed to make proper provision for an eligible person. The parties’ views do not decide this question. The court must decide, using the statutory framework, all the facts and current social standards. The Succession Act 2006 (NSW) is flexible, so courts can adapt their judgment as community expectations change.
Proportionality matters for both outcomes and costs in family provision cases, especially in small estates. If legal costs are not controlled, they can defeat the law’s purpose. Cost capping helps manage this risk.
Retrospective cost capping at the end of proceedings is uncommon. Applications for early, prospective cost capping are even rarer. This case appears to be the first contested example where such an order was made before the interlocutory steps were finished and before a final hearing was set. The case involved the estate of Barry Lord, who died in May 2024. The net estate was about $135,000 and had already been distributed. The dispute was between two of his five children. The plaintiff received nothing under the will and sought a family provision order. The defendant, as executrix, received the entire estate. By the time of the application, legal costs were already about $62,000, nearly half the estate, and projected costs would have used up the rest.
The defendant asked the court to set a cost cap for both parties in advance. The court agreed. It stressed that early cost capping should be based on principles, not fixed formulas or percentages. The court’s job is to make a judgment based on proportionality and to protect the purpose of family provision law from high costs.
The Court recognised that prospective cost capping necessarily relies on information that may be incomplete or untested. Nonetheless, a capping order may still be made where the available material is sufficient to permit a proper evaluative assessment. Any risks arising from uncertainty are mitigated by the Court’s ability to later vary the order to ensure the ultimate justice of the case.
The court noted that the evidence is sometimes insufficient to justify early cost capping. In those cases, the application should be refused or delayed. In this case, there was enough material to assess proportionality, as it involved only a family provision claim.
The Court set a cost cap early to protect the small estate and stop legal costs from taking over the main issues. This shows the Court is willing to act early to keep family provision cases fair and balanced. This decision may lead to more early cost-capping requests and more focus on keeping costs low from the start.
This case may encourage estate planners and legal advisors to use more strategies to reduce litigation costs and make sure estates are distributed as intended. Early intervention and cost management could include clearer wills with specific clauses about the executor’s duties and what beneficiaries get. For example, a will could say, ‘The executor shall distribute the assets according to the specified allocations within six months from the date of probate, ensuring that all beneficiaries are consulted during the process.’ Planners might also add early mediation clauses, like, ‘In the event of a dispute regarding the distribution, parties agree to engage in mediation prior to initiating formal litigation,’ to help resolve disputes before costs rise. Regularly reviewing estate plans can keep them up to date and avoid surprises. Setting up ways for beneficiaries to communicate, such as scheduled meetings and updates, can also help prevent conflicts.
Drafters should review estate documents regularly, for example every two years, to make sure they match current intentions and avoid problems. Adding a statement in wills that encourages regular review can help keep documents current and clear. Early mediation clauses and regular updates can help settle disputes before costs get too high. Practitioners should also consider alternative dispute resolution and make sure estate documents reflect any changes in the testator’s wishes.
The Estate and Its Distribution
The estate was modest. After the deceased died, the defendant said he had told her to transfer some assets to herself before his death. Correspondence in early 2025 showed the estate included two NAB bank accounts with about $144,000. After funeral and burial expenses of about $16,800, the net estate was about $127,000.
About a month after the death, the defendant transferred all the money from the accounts to herself. She used the funds for several purposes, such as buying a horse float, giving money to two of her children for housing or debt, buying a vehicle, paying estate liabilities, and reducing her own credit card debt. The plaintiff’s solicitors questioned whether this distribution was proper, especially since probate had not been granted. They said it was a breach of the defendant’s duties as executor.
Commencement of Proceedings and Procedural History
On 27 May 2025, just before the limitation period ended, the plaintiff started proceedings for a family provision order under s 59 of the Succession Act. He also sought orders to treat the distributed estate as a notional estate. The case progressed with directions hearings, affidavits, and a court-annexed mediation in October 2025, which did not resolve the dispute. The plaintiff did not attend the mediation in person. By early November 2025, the case was referred for possible cost capping. The defendant then formally applied for cost-capping orders, and the matter was set down for a hearing.
The Cost Capping Application
At the hearing on 7 November 2025, the defendant applied for prospective cost capping orders under UCPR r 42.4 and CPA s 98(4), and also relied on the court’s inherent jurisdiction. The plaintiff opposed the application. He argued that costs should be dealt with at the end of the case and that there should be further mediation. Both parties relied on affidavit evidence and oral submissions, followed by supplementary written submissions.
Costs Position
The plaintiff had a conditional costs agreement with a 25% uplift. A conditional costs agreement is a type of legal fee arrangement where the lawyer’s fees are contingent on the success of the case. In such agreements, a 25% uplift means that if the case is successful, the lawyer’s standard fees can be increased by 25%. By November 2025, his actual costs exceeded $44,000, and his estimated total costs for a one-day hearing exceeded $83,000. The defendant’s costs to date are about $18,000, with total estimated costs up to $30,000.
The interaction between conditional cost agreements and cost-capping orders poses practical concerns for estate litigators. Such agreements, particularly those with uplifts, can complicate cost capping implementation, as the uplift may cause costs to exceed the initially capped amount. Practitioners should structure conditional cost agreements carefully by explicitly including terms that address the possibility of cost-capping orders. This could involve setting a baseline fee structure that remains proportionate to the estate’s value, ensuring any uplift is justified and transparent, and negotiating a cap on total fees that aligns with potential court-imposed caps.
For example, a sample clause might read: ‘The parties acknowledge that legal fees will follow a conditional cost agreement subject to a cap of $22,500, inclusive of GST, or the court-imposed cap, whichever is lower. Any uplift will only apply if total legal costs do not exceed the predetermined cap and must be detailed clearly in all billing statements.’
Courts often resolve these conflicts by considering the overall fairness and necessity of the uplift in the context of the capped costs. They may require detailed justifications for any uplift and assess whether it promotes or hinders access to justice. By reviewing these elements, courts can navigate the tension between ensuring fair compensation for legal work under conditional agreements and maintaining proportionality within cost caps. This balancing act ensures that both the integrity of conditional agreements and the objectives of cost capping are upheld, reducing the chance that legal costs will deplete the estate’s value entirely.
If the case went to a final hearing, the total legal costs would probably use up, or nearly use up, the entire estate.
Parties’ Financial Circumstances
The plaintiff lives in Ireland. He has modest assets and more liabilities than assets. He sought provision to pay his debts, provide housing for himself and his daughter, and establish a contingency fund. The defendant works full-time and lives in a household with significant jointly owned assets, including a valuable property. She has substantial superannuation and some liabilities. She also supports family members financially.
Proposed Cost Capping Orders
The defendant asked the court to limit the legal costs recoverable from the estate, or from each other, to $20,000 per party. She argued that without a cap, legal costs would use up the estate and defeat the purpose of the family provision jurisdiction.
Defendant’s Submissions in Support of Capping
The defendant argued that:
Cost capping should be addressed early rather than retrospectively.
proportionality and access to justice require certainty as to the net estate available for distribution;
In small estates, high and uncertain costs impair meaningful mediation;
UCPR r 42.4 confers a broad discretionary power guided by proportionality and the overriding purpose of civil litigation.
The defendant relied on several key factors: the small size of the estate, the plaintiff living overseas, the conditional costs agreement, the strength of the claim, the parties’ financial positions, the low chance of recovering costs from the plaintiff, and the clear gap between likely legal costs and the estate’s value. She argued that both community standards and judicial authority would see it as wrong for legal costs to use up most of a modest estate, especially where any provision ordered would likely be small.
How do NSW cost-capping mechanisms compare with other jurisdictions?
In New South Wales, prospective cost capping derives from a combination of statutory and procedural sources, including s 98(4) of the Civil Procedure Act 2005 (NSW), r 42.4 of the Uniform Civil Procedure Rules 2005 (NSW), and the Court’s inherent jurisdiction. By comparison with other jurisdictions, there are notable differences that practitioners should consider. Victoria has equivalent powers, yet tends to apply them more conservatively. Prospective cost capping is infrequent, particularly in probate and family provision matters. In Queensland, while mechanisms to manage costs exist, early-stage prospective cost capping is uncommon and is usually part of broader case management rather than a standalone order. South Australian courts emphasise proportionality, but often address cost issues retrospectively, post-proceedings, rather than through early intervention. The UK presents a more developed, systematic approach to cost control, with formal cost-budgeting regimes operational from an early stage throughout proceedings, reflecting its structured civil litigation framework. These differences highlight the unique judicial philosophy of each jurisdiction, with New South Wales remaining distinctive in its willingness, though sparingly, to impose prospective cost caps in family provision cases, especially where small estates see escalating costs threaten the jurisdiction’s purpose. Furthermore, New South Wales Court practice allows for the application of cost caps, taking into account the overarching goals of fairness and access to justice, which may provide a broader scope and greater flexibility in imposing such orders than in other jurisdictions that may strictly adhere to procedural norms.
Judicial Discretion
What factors inform the decision to impose a cost cap?
The Court’s discretion is contextual and evaluative, rather than rule-based. Relevant considerations commonly include:
the size and character of the estate, and whether anticipated costs are disproportionate to its value;
costs already incurred and credible projections of future expenditure;
the complexity of the dispute, including whether issues extend beyond family provision into probate, trust, or notional estate claims;
the procedural stage of the proceedings and the quality of the available evidence;
whether uncontrolled costs would frustrate the statutory objectives of the family provision regime; and
broader considerations of fairness and the interests of justice.
No fixed formula or percentage is applied. Proportionality is assessed by reference to the particular circumstances of the case.
Procedural Requirements
How does a party seek a prospective cost-capping order?
An application for cost capping should ordinarily be supported by a clear evidentiary foundation and will typically involve: filing an interlocutory application relying on UCPR r 42.4, CPA s 98(4), or the Court’s inherent jurisdiction; preparing detailed affidavits setting out costs incurred to date and realistic estimates of future costs, including for final hearing; directly addressing proportionality in written and oral submissions; where appropriate, providing draft orders identifying the proposed cap and whether it applies to one or both parties.
When preparing an application, practitioners should focus on gathering key evidence that will be most persuasive to the court. Itemised costs, which provide a detailed breakdown of expenses, are crucial in demonstrating the inevitability of high costs if not capped. Standard cost templates can be invaluable for maintaining clarity and consistency. Expert affidavits, particularly from financial experts, can bolster the argument by providing an objective assessment of the estate’s capacity to sustain ongoing legal expenses. Additionally, evidence of prior cases with similar estates where costs have exceeded the estate’s value can support a case for cost capping. Referencing recent comparable cases helps set realistic expectations and ensure thorough preparation.
Absent sufficient evidence, the Court may decline to make the order or defer consideration until a later stage of the proceedings.
Case Outcome
What became of the family provision claim?
The decision under consideration did not resolve the substantive family provision claim. The Court’s ruling focused solely on the interlocutory application for prospective cost capping. It also addressed the management of the proceedings going forward.
The underlying family provision claim remained on foot.
The cost-capping order was designed for a specific reason. It ensures that the matter can ultimately be determined. This can occur without the estate being eroded by disproportionate legal costs.
Early cost capping in family provision proceedings
Traditionally, cost capping has most often been considered at the conclusion of proceedings, once the litigation’s outcome is known. Applications for prospective cost caps at an early interlocutory stage remain uncommon. However, parties should no longer regard such orders as unexpected in family provision matters.
For decades, the procedural framework governing family provision litigation signals a central concern of the Court. That concern is cost proportionality. Practice Notes inform parties about cost management. Repeated judicial commentary alerts them that costs may be actively managed. This management aims to protect the integrity and utility of the jurisdiction. Procedural fairness must therefore be assessed against this longstanding backdrop.
The relative scarcity of early cost-capping applications does not come from any practical inability to estimate costs. It also does not come from assessing estate size. Those matters are routinely required to be disclosed at an early stage. Rather, practitioners often choose to defer the issue. They anticipate that cost capping might be addressed after the substantive outcome is known. That preference persists despite consistent judicial encouragement to consider the issue earlier.
Appropriateness of interlocutory cost caps
The suggestion that interlocutory cost capping lacks certainty or causes confusion was rejected. On the contrary, early cost caps may enhance procedural fairness by providing clarity and predictability for parties and practitioners.
Any potential unfairness can be mitigated through the Court’s express power to vary a cost cap where “special reasons” exist. This variation must be in the interests of justice. Alternatively, orders can be crafted subject to further order. The Court’s broad discretionary powers under the UCPR, CPA, and Succession Act are not confined by implicit limitations.
The decision to impose a cost cap at an interlocutory stage is an evaluative case-management judgment. It requires a balancing of competing interests. Relevant considerations reflect the distinctive nature of family provision litigation and include:
proportionality between costs and the potential benefit to the claimant;
costs incurred relative to estate size (including potential notional estate);
comparative costs in similar proceedings;
The risk that legal costs may undermine the statutory purpose of the jurisdiction.
Unlike some jurisdictions, NSW does not require reference to fixed statutory criteria. Nor does the Court apply rigid percentages or “rules of thumb”. Precision is neither possible nor appropriate at an early stage; a broad-brush evaluative approach is often required.
Arguability of the claim
Whether a claim is reasonably arguable may form part of the evaluative assessment. Its weight will vary depending on the stage of proceedings. At an early interlocutory point, the strength of the case may only be capable of tentative assessment. The absence of a clear view of the ultimate justice of the case does not preclude cost capping. It is simply one factor in the balance.
Evidentiary foundation
To support an interlocutory cost-capping application, the Court must be provided with enough material to make a principled assessment.
Quantum of the cap
Family provision claims are inherently unpredictable, particularly where reliance is placed on notional estate provisions. These features make fixed formulas inappropriate at an interlocutory stage. The quantum of any cap must result from an evaluative judgment. This judgment is informed by the available evidence. It is important to acknowledge that a range of reasonable outcomes exist. Typically, this includes:
- the plaintiff’s affidavit in chief;
- evidence of the size and composition of the estate;
- solicitor’s affidavits detailing costs incurred and estimated future costs; and
- proposed draft capping orders.
The Court declined to prescribe an exhaustive list of required materials, recognising that the evidentiary needs will vary by case.
Variation of cost caps
Cost caps imposed under UCPR r 42.4 may be varied where “special reasons” exist and it is in the interests of justice. These concepts are flexible. They are fact-specific. This allows consideration of developments in the litigation and the final outcome of the family provision claim.
Where cost caps are imposed under broader statutory powers, they can be opened to further order. This recognizes that parties may have acted in reliance on the cap.
Limits of cost capping
Cost capping does not fully solve the problem of high litigation costs. As a recent appeal case shows, even with caps, costs can still use up an estate. Managing costs can reduce risk but does not guarantee a fair result.
Determination in Lord v Craig [2026] NSWSC 17
The Court concluded that an interlocutory cost-capping order was appropriate. The plaintiff was an eligible person. The issues were not unusually complex. The costs already incurred, particularly by the plaintiff, were disproportionate to the modest size of the estate.
The Court rejected the contention that such orders should be reserved for “exceptional cases.” It also dismissed the idea that they would impede the parties’ ability to continue the proceedings. Adequate evidence existed to support a reasoned estimate of appropriate costs.
The Court set a cap of $22,500 (including GST) on a party’s legal costs. It included the choice to change this cap later. The Court instructed the parties to try to settle. This instruction demonstrated that cost capping and substitute dispute resolution can work together. This approach encouraged more efficient litigation. It pushed the parties to focus on resolving the case without using up the estate. By requesting settlement talks, the Court encouraged cooperation and reduced conflict. These steps helped the parties find a solution to preserve more of the estate’s value. The solution also supported access to justice.