Background
Following the dismissal of the plaintiffs’ proceedings against Hunter New England Local Health District, Muston J initially ordered the plaintiffs to pay the defendant’s costs, while reserving the parties’ right to seek a different costs order.
The defendant then relied on separate offers of compromise served on each plaintiff on 18 March 2026. Each offer proposed judgment for the defendant with no order as to costs and remained open for nine days. The plaintiffs did not accept the offers.
The Court’s Holding
The Court vacated its earlier costs order and ordered that the plaintiffs pay the defendant’s costs on the ordinary basis up to and including 18 March 2026, and on the indemnity basis from 19 March 2026.
The March offers complied with r 20.26 of the Uniform Civil Procedure Rules 2005 (NSW) and were left open for a reasonable time despite the approaching trial. Because the proceedings were dismissed, the defendant obtained an outcome no less favourable than the offers, engaging r 42.15A. The later expert joint report and psychiatric reassessments did not materially alter the forensic landscape or justify departing from the usual indemnity-costs consequence.
Key Takeaways
- A defendant’s compliant offer of compromise can trigger indemnity costs where the plaintiff does not better the offer.
- Nine days was a reasonable acceptance period in the circumstances, notwithstanding the proximity of trial.
- Later expert material that confirms already-known competing opinions will not necessarily justify a departure from the rule-based costs consequence.
Why It Matters
The decision underscores the financial risk of rejecting a formal settlement offer shortly before trial. Parties assessing an offer must consider the evidence then available; later confirmation of existing expert disagreements may not excuse non-acceptance.