• ‘Calderbank offers’ are a formal offer to settle the case + a warning that this offer will be disclosed to the court in assessing costs (cf. ‘without prejudice’ offers). Eg “without prejudice save as to costs”. Resort to these is normally unnecessary, given O 26.
• Offers of Compromise:
o INCENTIVE TO SETTLE;
o Rationale espoused by Court of Appeal (NSW) in Maitland Hospital v Fisher (No 2): The objects of the rule include 1) to encourage the saving of private costs and the avoidance of the inherent risks, delays and uncertainties of litigation, 2) to save public costs incurred in litigation, and 3) to indemnity the party who has made the reasonable offer of compromise against costs thereafter incurred;
o Procedure: - Step 1 Offer:
- Party (P/D) may serve on the other an offer of compromise (r 26.02(1)); - Serve in courtroom;
- It shall be in writing and contain a statement that it is served in accordance with O 26 (r 26.02(3) (a),(b));
- It may be served at any time before verdict or judgment (r 26.03(1)). Can be made during trial (Baxter v Mule);
- A party can serve more than one (r 26.03(2));
- It may be expressed to be limited as to the time the offer is open to be accepted after service, but not less than 14 days (r 26.03(3)). BUT it shall not be withdrawn during the time it is open, unless Court otherwise orders (r 26.03(5)). IE second offer does not withdraw first offer until time expires (Baxter v Mule);
- It’s an offer of compromise made without prejudice, unless otherwise provides (r 26.04). IE no mention of it made until all questions of liability and relief to be granted have been determined (r 26.05). So DO NOT FILE in court.
- Step 2 Acceptance:
- A party on whom an offer of compromise is served shall within 3 days after service serve a written acknowledgement of service on the party serving the offer (r 26.03(3.1));
- If the party on whom an offer is served wants to accept the offer, they serve notice of acceptance in writing before (a) the expiration of the time specified or, if no time specified, within 14 days, or (b) verdict or judgment- whichever event is sooner (r 26.03(4)). Can still accept even if during that period that party makes an offer of compromise (r 26.03(6));
- Upon acceptance of an offer of compromise, D shall pay the costs of P in respect of the claim up to and including the day the offer was served, unless the Court otherwise orders (r 26.03(7)). Any term in offer that purports to negative or limit this shall be of no effect (r 26.03(8)); - If offer provides for payment of money to P, it shall be paid within 14 days unless otherwise
- Step 3 Enforcement:
- Where a party to an accepted offer of compromise fails to comply with terms, then, unless for special cause the Court shall otherwise order, the other party shall be entitled, as that party may elect, to (a) judgment in the terms of the accepted offer; or (b) judgment (if P, by dismissing proceeding, or if D by striking out defence) (r 26.07(1)).
o Failure to accept: - Plaintiff
- r 26.08(2): If P’s offer is rejected, and P gets judgment ≥ amount offered, then:
(a) If claim concerns death or bodily injury, P gets costs taxed on an indemnity basis33; OR
(b) Otherwise, P gets costs up to and including day of offer on party and party basis34
and thereafter on an indemnity basis. - Defendant
- r 26.08(3): If D’s offer is rejected, and P gets judgment ≤ amount offered, then:
(a) D pays P’s costs on party/party basis up to the day the offer was served; AND
(b) P pays D’s costs after that date on party/party basis. - Discretionary;
- (2) and (3) shall not apply unless Court is satisfied that the party serving the offer of
compromise was at all material times willing and able to carry out the party’s part of what was proposed in the offer (r 26.08(7)).
o Multiple defendants
Where Ds are jointly or jointly and severally liable P may only offer to settle with all, and a D may offer to settle the action against all (and where offer is made by 2 or more Ds, the Ds are jointly or jointly and severally liable to P for the whole amount of the offer). Offers which do not comply with these conditions do not attract cost penalties if not accepted (r 26.09).
4. Abandonment
Informal
33 INDEMNITY COSTS: All costs incurred except insofar as they are of unreasonable amount or have been unreasonably incurred (r 63.30.1).
34 PARTY AND PARTY COSTS: All costs necessary or proper for the attainment of justice or for enforcing or defending the rights of the party whose costs are being taxed (r 63.29).
• P and D just do nothing.
Discontinuance
• Formal ending; • r 25.02:
Plaintiff may discontinue:
- (2) A proceeding or withdraw any part of it (a) before the close of pleadings; OR (b) at any time, by leave of the Court or with the consent of all other parties; or
- (4) A defence to counterclaim.35 Defendant may discontinue:
- (3) A counterclaim or withdraw any part of it (a) before the close of pleadings; or (b) at any time, by leave of the Court or with the consent of all other parties to the counterclaim; or
- (4) A defence53; or
- (6) A claim made against a third party by the third party notice or any part of it by leave of the Court or consent of the third party.
• Party who discontinues has to pay everyone’s costs up until point of discontinuance (r 25.05).
35r 25.02(5): Cannot withdraw an admission or any other matter operating for the benefit of another party without the consent of that party or the leave of the Court.