It is often said that the issue of costs is of primary
importance in litigation. However, 2012 saw the issue of costs
become one of increasing uncertainty for litigants in New South
Wales (NSW). This is in large part due to differing judicial
opinions on the application of rule 20.26 of the Uniform Civil
Procedure Rules 2005 (NSW). This rule relates to offers of
compromise and provides, in general terms, that such offers must be
"exclusive of costs".
In Old v McInnes and Hodgkinson [2011] NSWCA 410
(Old), the NSW Court of Appeal found that the relevant
offers were not "exclusive of costs" because they
provided that the offeror would also pay the offeree's costs.
In that way, rather than being "exclusive of costs", the
offers included an offer to pay costs. Such a "plus
costs" offer was therefore invalid.
