An important part of running Court cases is maximising the chances of your opponent paying your legal costs.
Recovery of legal costs
A successful party to litigation, in NSW, generally only recovers, at best, 60% to 70% of their incurred legal costs.
However outlined below is one method that, if employed correctly, can enable a successful party to recover up to 100% of their legal costs.
The Court Rules in NSW state that if an offer is made by a plaintiff, but not accepted by the defendant, and the plaintiff obtains an outcome no less favourable to the plaintiff than the terms of the offer, the plaintiff is entitled to an order against the defendant for the plaintiff’s costs assessed on an indemnity basis from when the offer was made (Rule 42.14 of the Uniform Civil Procedure Rules 2005).
If a defendant makes an offer but it is not accepted by the plaintiff, and the plaintiff obtain an order or judgment no more favourable to the plaintiff than the terms of the offer, the defendant is entitled to an order for the defendant’s costs assessed on the indemnity basis from when the offer was made (Rule 42.15 of the Uniform Civil Procedure Rules 2005).
The offer needs to be carefully expressed and in the correct form otherwise the offer may not invoke the relevant provisions in the Rules.
From a tactical viewpoint, a carefully made offer can:
- Place maximum pressure on the opposing party because the opposing party will be concerned that if they do not achieve a better result at trial, they will, most likely, be ordered to pay all your legal costs; and
- Result in your opponent paying all your legal costs following the trial.
The Rules concerning how offers need to be made are highly technical and experienced legal advice is paramount.
A skilful offer, made at the right time, can change the course of litigation.
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