When a costs threat tries to force your hand

Don't let the budget threat set the pace

When the other side says they will outspend you, they are trying to make the dispute feel settled before anyone tests the evidence. In the Federal Court, the unsuccessful party is usually ordered to pay part of the winner’s costs, and the Court says costs orders are meant to compensate, not punish. That makes the threat real, but not one-sided. ([fedcourt.gov.au](https://www.fedcourt.gov.au/going-to-court/i-am-a-party/court-processes/legal-costs?utm_source=openai))

The practical mistake is to hear a bigger budget and assume you have no room to move. Costs pressure cuts both ways. A clean record, a realistic estimate of your own exposure, and a measured written response can matter more than bluster. The aim is not to be fearless. It is to be prepared. ([fedcourt.gov.au](https://www.fedcourt.gov.au/going-to-court/i-am-a-party/court-processes/legal-costs?utm_source=openai))

Price your own exposure first

Start by pricing your own risk to the next step, not to the end of the case. Ask your solicitor, if you have one, what the likely spend is for pleadings, evidence, appearance fees, and any expert work. That number does not need to be perfect. It just needs to be real enough to guide a decision. ([fedcourt.gov.au](https://www.fedcourt.gov.au/going-to-court/i-am-a-party/court-processes/legal-costs?utm_source=openai))

That estimate helps you decide whether to push on, narrow the issues, or settle. It also stops the other side from setting your numbers for you. If you know what your side of the fight may cost, you can compare that amount against the commercial value of the claim and make a calmer decision. ([fedcourt.gov.au](https://www.fedcourt.gov.au/going-to-court/i-am-a-party/court-processes/legal-costs?utm_source=openai))

Source: Official guidance

Use one real offer, not a bluff

If the numbers point toward settlement, make one reasonable written offer that could later be shown on costs. A Calderbank offer is expressed without prejudice save as to costs, and Victorian Supreme Court material notes that it may be adduced on the question of costs. The wording matters, so keep it clear and genuine. ([supremecourt.vic.gov.au](https://www.supremecourt.vic.gov.au/sites/default/files/assets/2017/09/64/a67dc729f/coa_reviewofthelegalyear.pdf?utm_source=openai))

Do not turn the offer into a performance. State the amount or outcome you will accept, the deadline, and what happens if it is accepted. Avoid vague threats, changing terms, or inflated deadlines. A credible offer is useful because it shows you were trying to resolve the dispute, not just win the argument. ([supremecourt.vic.gov.au](https://www.supremecourt.vic.gov.au/sites/default/files/assets/2017/09/64/a67dc729f/coa_reviewofthelegalyear.pdf?utm_source=openai))

Keep the record quiet and written

From here on, answer calmly and only in writing. Emails and letters create a record of what was said, what was disputed, and whether you kept engaging. They also stop a fast-talking opponent from dragging you into off-the-cuff concessions that are hard to unwind once the dispute is in front of a judge. ([fedcourt.gov.au](https://www.fedcourt.gov.au/about/national-court-framework/case-management?utm_source=openai))

Keep every version of every email, attachment, and delivery receipt in one file. The Federal Court’s case-management approach uses agreed facts and an agreed chronology where possible, so a tidy file matters. If the other side later argues you were unreasonable, your dated record is what lets your version be tested properly. ([fedcourt.gov.au](https://www.fedcourt.gov.au/about/national-court-framework/case-management?utm_source=openai))

Make the next move in 24 hours

The first 24 hours should produce three things: a cost estimate, a written response, and a decision about whether a genuine settlement offer is worth making now. If the dispute is already moving toward court, ask whether a costs cap or other case-management step could help limit exposure. Acting early keeps more options alive. ([fedcourt.gov.au](https://www.fedcourt.gov.au/going-to-court/i-am-a-party/court-processes/legal-costs?utm_source=openai))

If you want a calm second set of eyes, CRP can help you work through the dispute resolution options and choose the next practical step. This is general information only, not legal advice, and it does not prove any legal fact. Call CRP today about dispute resolution and keep the next move on paper. ([fedcourt.gov.au](https://www.fedcourt.gov.au/going-to-court/i-am-a-party/court-processes/legal-costs?utm_source=openai))