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Duncan Basheer Hannon

- 18 Mar 2015
  • Personal Injury

A warning about rejecting settlement offers

A recent case in the South Australian District Court has highlighted how costly it can be to reject a settlement offer and go to trial.

In the case of De Poi v Advertiser – News Weekend Publishing Company Pty Ltd, Ms De Poi sued the publisher of “The Sunday Mail”, seeking an award of compensation for defamation.

Unfortunately for Ms De Poi, the trial judge dismissed her claim. She received no compensation.

Usually when someone loses a case in Court, they will be ordered to pay some of the other side’s legal costs.

However, in Ms De Poi’s case, “The Sunday Mail” had made a number of settlement offers to her, before the trial.

She rejected those offers and pursued her case in the Court.

At the end of the trial, the judge decided that “The Sunday Mail’s” settlement offers were reasonable, and that Ms De Poi’s decision to reject those offers was unreasonable.

As a result, Ms De Poi was ordered to pay more than the usual level of legal costs to “The Sunday Mail”. She was subject to a special penalty costs order, known as “indemnity costs”.

Pursuing a claim to trial in any Court is an expensive business.

Losing a case and being ordered to pay the other side’s legal costs would be a financial disaster for most people.

The result is even worse if you are ordered to pay “indemnity costs” to the other side.

Although each case is different, the lesson to be learned from the matter of De Poi is that great care should be taken when deciding to reject settlement offers in the lead up to trial.

(Duncan Basheer Hannon understands that the De Poi case may be subject to an appeal).