Defamation is when a person publishes information about another person, group or business that damages their reputation and encourages others to think less of them.
Anyone can be considered a publisher these days. Publication of defamatory material can take many forms including; blogs, news articles, social media posts, poems, songs, photos, videos, emails, comics/cartoons, drawings, online reviews, radio broadcast or spoken words.
As a result, defamation cases can be complex and expensive. When someone’s reputation is on the line, the question of legal costs often carries as much consideration as the claim itself. Understanding how costs work in defamation law can help you assess risks and make informed decisions about whether to pursue or defend a claim.
How Costs Work in Defamation Cases
In Australian courts, the starting point is that the losing party pays the winning party’s costs. This means if you succeed in a defamation claim, the other side may be ordered to pay a large portion of your legal expenses. On the other hand, if you lose, you could find yourself responsible not only for your own legal fees but also for a significant share of your opponent’s costs.
Costs are at the discretion of the court, and judges have flexibility in how they are awarded. A costs order can cover the entire case or just particular hearings, applications, or procedural steps.
High Profile Defamation Cases and Costs
Two recent cases have highlighted how significant the costs can be when you lose a defamation case.
In the case of Linda Reynolds v Brittany Higgins, the Western Australian Supreme Court found Brittany Higgins guilty of defaming her ex-boss, former Senator Linda Reynolds, through multiple social media posts made in 2022 and 2023.
As a result, Higgins was ordered to pay approximately A$315,000 in damages plus around A$26,000 in interest, and 80% of Reynolds’ legal costs which exceed $1 million.
In the case of Ben Roberts Smith, a decorated soldier, he sued several Australian newspapers (The Age, The Sydney Morning Herald, The Canberra Times) and individual journalists over articles published in 2018 alleging war crimes etc. A lengthy hearing followed, and in June 2023 the Federal Court (Justice Besanko) dismissed many of Roberts-Smith’s claims, finding that many of the serious imputations were substantially true or defensible. Most recently, The High Court has thrown out Ben Roberts-Smith’s last-ditch bid to appeal against his damning defamation loss, putting an end to seven years of litigation costing tens of millions of dollars.
Kerry Stokes (via his private company, Australian Capital Equity) financially supported Roberts-Smith’s litigation and is set to foot the bill. Estimates put this anywhere from $13.5 million to $30-40 million once all costs have been calculated.
Standard Costs vs Indemnity Costs
Most commonly, courts award “party and party costs.” These are the ordinary, reasonable legal expenses necessary to run the case. They rarely cover every dollar spent, and the successful party often remains out of pocket for the difference.
In some situations, a court may award “indemnity costs.” These are higher and closer to full recovery of the actual legal costs incurred. Indemnity costs are generally awarded where one party has acted unreasonably, for example, rejecting a reasonable settlement offer, pursuing baseless claims, or engaging in misconduct during proceedings.
Why Defamation Cases Are Expensive
Defamation cases often involve substantial legal work. Key factors that drive costs include:
- Complex factual disputes: Courts must examine exactly what was published, how it was understood, and whether it harmed the plaintiff’s reputation.
- Expert evidence: Cases may require expert witnesses in linguistics, media, or damages assessment.
- Intensive preparation: Lawyers must analyse evidence, draft detailed pleadings, and prepare witnesses for trial.
- Lengthy hearings: Defamation trials can run for weeks, or over the course of years with appeals before any resolution, adding significantly to the overall bill.
Because of these costs, many defamation matters are resolved out of court through negotiation or mediation, where the parties can agree not only on damages but also on who bears the costs.
Settlement and Costs Agreements
When parties settle a defamation claim, costs are often part of the negotiation. For example, the settlement might include an agreement that one side will pay a fixed sum towards the other’s legal fees, or that each party will bear their own costs. This can provide certainty and help avoid further litigation over expenses.
Defamation Costs in Victoria and New South Wales
For clients in Victoria and New South Wales, where most defamation cases are heard in the Supreme Court, the same general principles apply: costs usually follow the event (the loser pays). However, courts in both states encourage early resolution of disputes and will take into account whether a party has acted reasonably in attempting to settle. Refusing a reasonable offer can expose a party to indemnity costs later on.
Why Early Legal Advice Matters
The risk of paying another party’s costs is one of the biggest reasons why careful legal advice is essential before launching or defending a defamation claim. An experienced defamation lawyer can assess the strength of your case, advise you on likely costs, and explore options for resolving the dispute before trial.
At Litton Legal, we advise individuals, businesses, and media organisations across Albury, Melbourne, Sydney, and beyond on defamation claims. If you are worried about protecting your reputation – or the financial risk of defending a claim – our team can guide you through the legal process and help manage costs effectively. Get in touch with us here.
