Offers of compromise and Calderbank offers in the Supreme Court of Tasmania and costs ramifications

Calderbank offers

Where a party has unreasonably failed to accept a Calderbank offer, the letter of offer may be tendered in support of an application for costs and, in particular, any application for indemnity costs. For a party who chooses to make a Calderbank offer, the offer should be expressed to be such. In this jurisdiction the usual practice is to head the letter "Without prejudice save as to costs".

Offers of compromise

Pursuant to r.280 of the Supreme Court Rules 2000 ("SCR"), parties may make an offer of compromise by offering to:

Pay/Accept a nominated sum of money. Plaintiffs may do so after giving credit to the defendant for any set-off or counterclaim raised by the defendant against the plaintiff, stating whether the offer requires the defendant to pay the whole, or a stated proportion, of the plaintiff's costs. Accept/Concede a percentage of the claim. Give/Accept any relief that it is contended is sufficient to dispose of the whole action or one or more causes of action. Pursuant to r.281, an offer of compromise must be in writing and is to contain the following:

The title of the proceeding. The name of the party making the offer and the name of the party to whom the offer is made. A statement that it is served in accordance with Part 9 of the SCR. The cause(s) of action to which the offer relates Whether or not the offer is made in addition to any payment into Court previously made by the offerer under Part 8 of the SCR. The offer of compromise may also include an offer to pay/accept costs on a specified scale. Typically an offer of compromise includes provision for payment of costs as agreed or taxed.

An offer of compromise remains open for at least 14 days after service (r.280(7) and r.283) and must be made before trial (r.280(6)).

If there are multiple defendants alleged to be jointly/severally liable and a right of contribution or indemnity is alleged to exist between them, then in order to be protected by the costs consequences under the SCR the offer of compromise must be made so as to resolve the claim against all defendants (r.290). If the offer is made by multiple defendants, then the defendants are jointly/severally liable to the plaintiff for the whole amount of the offer (r.290).

Costs ramifications

The power to award costs is discretionary pursuant to r.57 of the SCR and s.12 of the Supreme Court Civil Procedure Act 1932. A successful litigant is generally entitled to an award of costs (Oshlack v Richmond...