When Public Interest Litigation Meets Cost Exposure: Lessons from the SW Forests Costs Ruling
Home › Case Studies › Case Law Library › Commercial & Business Cases › Civil Procedure & Evidence › South-West Forest Defence Foundation Inc v Department of Conservation and Land Management (No 2) [1998] HCA 35
Published: 19 November 2025 | Reviewed: 19 November 2025
(3-minute read)
How a costs decision shows why structural cost alignment matters when disputes escalate
In South-West Forest Defence Foundation Inc v Department of Conservation and Land Management (No 2) [1998] HCA 35, the High Court considered whether an unsuccessful public-interest applicant should nonetheless be protected from paying the government’s costs.
Environmental organisations had sought special leave to appeal in matters concerning standing and the enforcement of environmental laws in Western Australia. Special leave was ultimately refused. After that refusal, the applicants argued that they should not have to pay the respondents’ costs because the litigation served the public interest and because a different procedural course might have reduced expense.
The central legal question was whether these considerations justified a departure from the conventional rule that costs follow the event.
Kirby J, while emphasising the Court’s discretion, cautioned that there was no authority requiring a special costs regime for environmental or public-interest proceedings. At [5], the joint judgment stated succinctly:
Notwithstanding these considerations, the costs of these applications should follow the event.
The Court therefore ordered the applicants to pay the respondents’ costs.
Why the applicants’ submissions failed
The applicants argued:
their litigation was public-interest oriented, and
costs were increased because of a procedural course taken during the hearing.
Kirby J explained why neither point justified cost protection. Unlike the position in Oshlack v Richmond River Council, there was no statutory framework in Western Australia intentionally encouraging public participation in environmental matters. Further, the applicants had agreed to the expanded hearing opportunity, accepting the attendant risks.
The High Court reiterated that while judicial discretion exists, it must be exercised within conventional practice. Public-interest character alone does not displace the ordinary rule.
Why It Still Matters -
modern relevance and systemic risk
This decision illustrates a recurring dynamic in complex disputes: even when litigation is motivated by principle or public benefit, cost exposure remains structurally significant. For many individuals, businesses and community groups, uncertainty around costs can become as consequential as the legal issues themselves.
The ruling also highlights that procedural complexity, such as extended hearings or attempts to argue matters as if on appeal, can dramatically increase costs on all sides. Applicants in public-interest, environmental or administrative law matters often seek full argument because the issues matter deeply. Yet as this case shows, the structure of litigation can shift unexpectedly and expand costs rapidly.
For clients, the broader lesson is clear: when proceedings mutate into longer or more technical hearings, traditional billing models make them pay for both settlement strategy and trial-level preparation at the same time. Even in principled litigation, duplicated work is a predictable outcome.
How to Avoid the Same Trap -
cost alignment as a structural safeguard
The risk exposed in South-West Forest Defence Foundation is the risk of clients shouldering cost escalation when disputes take unexpected procedural turns. Traditional models blend:
settlement work
trial-style preparation, and
reactive work created by late procedural developments
into a single stream of hourly billing.
When a matter becomes more complex, clients often fund both possible futures, settlement and full-scale hearing, even though only one path will ultimately be pursued.
Clean Law’s structure is designed to prevent that duplication. The roles of the settlement lawyer and the courtroom lawyer are separated from the outset. Clients fund only the path they choose.
Two lawyers often cost less than one - because you fund one path, not both.
Escrow ensures no additional step is taken without express approval. If a matter begins as a limited application but later expands into a more elaborate hearing, as occurred here, the client retains full visibility and can decide whether to resource that shift.
This safeguard is not about predicting litigation outcomes. It is about preventing clients from unintentionally funding two tracks when legal processes become more involved than anticipated.
In high-stakes or public-interest matters, where the motivation may be principled rather than financial, structural cost alignment protects clients from the very problem illustrated in this case: noble intentions do not eliminate cost exposure.
The Practical Lesson
The South-West Forest Defence Foundation costs ruling makes visible a truth that endures across all areas of litigation: even when a dispute concerns matters of public significance, costs remain governed by conventional principles, and procedural shifts can quickly magnify financial risk. Structural safeguards offer a way to retain principled engagement without bearing unintended cost burdens.
To understand how one-path funding prevents clients from paying for both settlement work and litigation preparation when matters expand unpredictably, the following explainer provides a clear overview.
Learn how incentive alignment works
See the Hidden Traps in the Traditional Model
If you are facing a dispute with uncertain scope or significant public or commercial consequences, early independent advice can help reduce exposure before procedural steps expand the work required.
Arrange a confidential discussion with a Clean Law solicitor
By Nicky Wang
Principal Solicitor
Legal Liaison Ltd (trading as Clean Law)
Prepared in accordance with public-interest governance,
annual Law Society trust-account audits, and ACNC-reported standards.
Disclaimer: This page is intended to provide general information only and is not legal advice. The contents may not reflect the most current legal developments and do not take into account your individual circumstances. You should not act or refrain from acting on the basis of this information without obtaining legal advice tailored to your situation.
