Offers of compromise: Multiple defendants

Hobson v Northern Sydney Local Health District [2017] NSWSC 704 highlights the challenges of framing an offer of compromise for service on multiple defendants.

At [9] – [11] the court said:

  1. In the present case, there was no common interest among all of the defendants or between any two of them beyond successfully defending Mr Hobson’s claim. Two of the defendants were released from the proceedings during the hearing, although on different terms. None of the defendants was ever able to bind the others in a settlement. There were no cross-claims filed by any defendant against any other defendant. There is no evidence to suggest, and Mr Hobson in any event did not submit, that any single defendant was able to bind the other defendants with respect to considering or accepting the offer of compromise or in any way at all. It follows in my view, in accordance with authority, that it was not unreasonable for the second and fourth defendants not to accept the offer.
  2. There may be other reasons for this conclusion. The litigation was not without some complexity. The significant and competing expert opinions on the question of the defendants’ respective liabilities all bear witness to this fact. The offer of compromise was also served only five days before the commencement of the trial and at a time when the parties’ respective legal advisers might have been expected to be in the final stages of preparation for the case. The two defendants who were ultimately released from the proceedings were still parties at that stage. The offer was in terms open for acceptance by no later than the morning of the first day of the hearing, even though the letter accompanying the offer indicated that if more time were required, the solicitor for Mr Hobson would “seek instructions”.
  3. I consider that this is a case in which it was not unreasonable for the second and fourth defendants not to accept Mr Hobson’s offer of compromise. It follows that Mr Hobson’s application for indemnity costs should be rejected.

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