New South Wales Consolidated Acts

LEGAL PROFESSION ACT 2004 - SECT 340

340 Costs can be awarded on indemnity basis for costs incurred after failure to accept offer of compromise

(1) If a party to a claim for personal injury damages makes a reasonable offer of compromise on the claim that is not accepted, this Division does not prevent the awarding of costs against another party to be assessed on an indemnity basis in respect of legal services provided after the offer is made.

(2) An offer of compromise on a claim by a party is reasonable if the court determines or makes an order or award on the claim in terms that are no less favourable to the party than the terms of the offer.

(3) The regulations may make provision for or with respect to requiring disclosure by a law practice to the practice’s client of information in relation to the operation of this section in respect of any refusal by the client to accept an offer of compromise.

(4) If it appears to the court in which proceedings are taken on a claim for personal injury damages that a law practice has failed to comply with any provision of the regulations under this section, and that the client of the practice has incurred an increased liability for costs as a result of refusing a reasonable offer of compromise in connection with the claim concerned, the court may of its own motion or on the application of the client make either or both of the following orders:

(a) an order directing the law practice to repay to the client the whole or any part of those increased costs that the client has been ordered to pay to any other party,

(b) an order directing the law practice to indemnify any party other than the client against the whole or any part of the costs payable by the party indemnified in respect of legal services provided after the offer is refused.