Costs orders and litigation – beware unpredictable outcomes and always take settlement offers seriously

I was recently involved in a case where someone was offered half a million dollars as settlement, declined that offer, lost his case in the Supreme Court and had a costs order made against him. He subsequently decided to make an application to the Court of Appeal, but he also lost the appeal and had another costs order made against him.

The costs of the two proceedings together are likely to equate to at least $250,000. This person has gone from potentially gaining half a million dollars to losing a quarter of a million.

"No win no fee" arrangements can lead to overlooking risk of adverse costs orders

The solicitors who ran this case ran it on a no win no fee basis. This means that if the client does not win the case, the solicitors do not charge any professional fees.