Going to court

For most people, going to court is the least preferred way to resolve a dispute. It's often best to try other dispute resolution options first. However, if alternative dispute resolution is inappropriate for your circumstances, a court or tribunal decision may provide you with a definite outcome.

Some states and territories have civil and administrative tribunals. These are similar to local or magistrates courts. Most courts and tribunals will encourage you and the other party to try to reach an agreement yourselves. In the Federal Court, this can be a requirement.

Keep records of resolution efforts

If you apply or file a claim in a court or tribunal, you and the other party may have to participate in mediation or a pre-trial conference. A court or tribunal will need to see evidence.

Before going to court, you should make a record of your efforts to resolve the problem. Make notes of conversations and copies of emails, faxes and letters. It’s best if you make the record on the same day that the action occurs. These documents will form part of your evidence in court.

Before you decide to go to court, it's worth weighing up the costs and effort involved and the effects it may have on your business.

1. Use our going to court checklist

Before you make a decision about going to court, ask the following questions:

  • Is the hirer able to pay?
  • Is there a genuine dispute or is the court process an opportunity for the hirer to delay paying?
  • Does a time limit apply to your claim?
  • Can you afford it? (Costs will include court fees, legal fees, your time, and possibly the hirer's legal costs.)
  • Will the time, money and stress be worth the outcome?
  • What will happen if the decision goes against you?
  • How will a court case affect your business or reputation? (Whatever is said in court will be on the public record.)

2. Decide on the court or tribunal

Deciding on the right court or tribunal to hear your dispute will depend on:

  • the state or territory where the contract was undertaken
  • the reasons for your claim
  • the amount of money in dispute

Australia has 2 separate sets of courts. These include federal courts and state and territory courts. The courts in each state and territory, however, are separate from each other.

Some states and territories, such as the Australian Capital Territory, Queensland, Victoria and Western Australia, have civil and administrative tribunals. These allow small claims to be heard more cheaply and informally than in magistrates’ courts. The other states and the Northern Territory have small (or minor) claims divisions in the magistrates’ courts that hear small claims in a similar way.

It’s usually best to make your claim in the lowest level court that can decide on your case. The costs and complexity often increase in higher courts.

3. Consider the costs of going to court

The total cost of going to court will depend on:

  • the size of the debt (this determines which court you and the hirer go to)
  • the complexity of the situation
  • the fees charged by the court you attend
  • whether you and the other party are represented by lawyers
  • the cost of taking time away from your business to prepare and attend court
  • any travel and accommodation costs to get to court or to meet with lawyers

Example: legal fees associated with going to court

Carmen is a contractor who provides human resources advice to small businesses. Daniel owns an accounting firm. He hired Carmen to work for 6 weeks to assist with staff moves and settling new employees.

After the 6 weeks, 3 employees had resigned. Daniel said Carmen had done more harm than good and refused to pay her invoice of $5200. Daniel and Carmen met twice to discuss the issue and Carmen defended her work, but Daniel still refused to pay.

Carmen's lawyer advised that she could send Daniel a letter of demand. She asked Carmen if she was prepared to take court action against Daniel if he didn’t then pay. Carmen asked how much it would cost.

Her lawyer advised that her hourly rate was $300 and estimated costs as follows:

  • legal fee to take instructions and prepare court documents $1,200 (4 hours)
  • court filing fee of $197
  • if claim is not defended: legal fee of $600 (2 hours) to prepare court documents for default judgment
  • if claim is defended: legal fee of $1200 (4 hours) to read the defence and advise whether the firm is likely to be successful
  • legal fee for attending initial court appearance $900 (3 hours)

Carmen's lawyer explained that those fees would 'just get things started' because this particular case could turn out to be complex. Carmen decided that it was not worth the cost. She instructed her lawyer to write to Daniel to try to negotiate a settlement instead.

Was this page helpful?