The general rule is that parties to a proceeding before either the AAT or VCAT bear their own costs.

The AAT has no power under the AAT Act to award costs (apart from witness costs), except for the power to make an order for costs in respect of reviews brought under the Safety, Rehabilitation and Compensation Act 1988 (Cth) (s.67). Also, under the Freedom of Information Act 1982 (Cth) (s.66), the AAT may in certain circumstances recommend to the Attorney-General that the Commonwealth pay the costs of the applicant.

Section 109 of the VCAT Act gives VCAT the power to award costs. However, there is a significant departure from the rule that the costs shall "follow the event" (that is, the successful party will receive an award of costs). The general rule at VCAT is that each party shall bear their own costs. There are exceptions to this rule; for example, where a party has acted in a vexatious manner in the conduct of the proceeding or where a party has caused undue delay. In such circumstances, costs may be awarded. However, the award of costs is discretionary and each case will be assessed on its own merits.