A joint offer of compromise may impact your costs order
In Hobson v Northern Sydney Local Health District [2017] NSWSC 704 (5 June 2017) (Hobson) his Honour Justice Harrison decided that an offer of compromise directed to all defendants jointly rather than to each defendant individually did not entitle the plaintiff to an award of costs on the indemnity basis.
Mr Hobson commenced proceedings against four defendants. He obtained judgment on his claim that was no less favourable than the terms of his offer. He sought an order for the payment of his costs on an indemnity basis based upon an offer of compromise he directed to all of the defendants.
His Honour Justice Harrison applied the Court of Appeal decision in Vieira v O'Shea (No 2) [2012] NSWCA 121 (Vieira). In Vieira, an offer of compromise was not capable of being accepted by one respondent on behalf of all of the others, so it was not unreasonable for that respondent not to accept the offer.
The situation was the same in Hobson. There was no common interest among the defendants, and no defendant could bind another in a settlement. In the circumstances, it not unreasonable for two of the defendants to not to accept the offer.
His Honour declined to make an award of costs on the indemnity basis.
Principal at Herman Legal
7 年Yes, issuing individual offers will often be a better way to go. However, imagine a joint offer of compromise is issued to a sole director of a company in her personal capacity (first respondent) and to the company (second respondent). In that circumstance, there would be a common interest among the respondents, and the first respondent can bind the second respondent in a settlement. That could be enough to distinguish the case from Hobson.
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7 年Interesting. So I take it that the lesson here is to make a separate compromise offer to each defendant, right?