Reject A Genuine Settlement Offer And Risk Paying The Price

Can a party who successfully sues another party, having rejected a settlement offer, be liable for some of the other party's costs? Potentially yes.

THE USUAL RULE

The usual rule in litigation is that costs follow the event, i.e. the losing party pays the winning party's costs. However, the courts can depart from this rule in certain circumstances. For example, in cases where it is not possible to make a lodgement/tender, the court can, where it considers it fair to do so, have regard to the terms of any settlement offer made by the losing party (whether made on an open basis or without prejudice save as to costs). If the settlement offer would, if accepted, have resolved the dispute and avoided the need for a court hearing, the court may take the view that the losing party should be allowed to recover at least some of its costs from the winning party.