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Workers’ compensation changes to affect contribution claims

Workers’ compensation changes to affect contribution claims

Workers Compensation Qld – Workers Compensation Legislation Qld – Workers Compensation Lawyers Brisbane – Workers Compensation Law – Workers Compensation and Rehabilitation Act – Workers Compensation Insurance – Workers Compensation Scheme – Contractual Obligations – Contractual Indemnities – What is an indemnity clause? – Contractual Interpretation Australia – Contractual Indemnification – Contractual Disputes – Workers Compensation Regulator

On 14 June 2016, the Queensland Parliament introduced the Workers’ Compensation and Rehabilitation (National Injury Insurance Scheme) Amendment Bill 2016 (Qld) (Bill).

On 31 August, the Bill was passed (with amendments) that will constrain contractual indemnity clauses in workers’ compensation claims.

The Bill

The Bill is part of a broader social reform which includes the establishment of the National Injury Insurance Scheme for Queenslanders.

The Bill set out to restore the original policy intent of the Workers’ Compensation and Rehabilitation Act 2003 (Qld) (WCRA) and provide certainty to stakeholders after recent Court decisions interpreted certain provisions of the WCRA in ways that could adversely affect the operation of the scheme.

The Amendment

Clause 31: which will amend Chapter 5 of the WCRA states as follows:

‘236B Liability of contributors

(1) This section applies to an agreement between an employer and another person under which the employer indemnifies the other person for any legal liability of the person to pay damages for injury sustained by a worker.

(2) The agreement does not prevent the insurer from adding the other person as a contributor under section 278A in relation to the employer’s liability or the insurer’s liability for the worker’s injury. 

(3) The agreement is void to the extent it provides for the employer, or has the effect of requiring the employer, to indemnify the other person for any contribution claim made by the insurer against the other person.

(4) In this section-

damages includes damages under a legal liability existing independently of this Act, whether or not within the meaning of section 10.’

The Bill also proposed to amend the definition of damages under section 10 of the WCRA, however, a motion in the parliament to change the definition was defeated.

For Parties 

This amendment will mean that if:

  • a common law claim has been made against an employer; and,
  • the employer agreed to indemnify another party for that party’s legal liability; and,
  • WorkCover Queensland brings a contribution claim against that party,

the party joined to the claim will be unable to enforce their contractual indemnity clause to neutralise the contribution claim.

In many claims, the addition of section 236B(3) will allow contribution claims to be made by WorkCover, with third parties constrained in their ability to enforce indemnities against employers. However, the application of section 236B in a claim will depend upon:

  • who the parties to the relevant agreement are; and
  • the wording of the indemnity.

For instance, in an agreement where:

  • the parent company of an employer grants indemnity to a party; and
  • the agreement was not between the ’employer’ and the other party,

but the employer is referred to as part of a ‘contractor group’ or otherwise in the agreement, then section 236B may not apply to the agreement. In such a case, an entity related to the employer (such as a parent company) may remain liable for the indemnity granted to the other party.

Otherwise, the new Section 236B(3) may not operate to defeat actions in contract against employers by other parties (e.g. for breach of warranty or, for breach of an obligation to insure).

Once enacted, the amendment will apply to existing claims; if a settlement for damages has not been agreed or, a trial has not commenced.

To read the Bill in full, click here. To read the Queensland Parliament’s third reading speech, click here.

BOOK A FREE CONSULTATION for advice and information about your rights and obligations in a workers’ compensation matter, by calling (07) 3067 3025 or contact us online.

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Kate DenningWorkers’ compensation changes to affect contribution claims
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Workers’ compensation changes to affect contractual indemnities

Workers’ compensation changes to affect contractual indemnities

Workers Compensation Qld – Workers Compensation Legislation Qld – Workers Compensation Lawyers Brisbane – Workers Compensation Law – Workers Compensation and Rehabilitation Act – Workers Compensation Insurance – Workers Compensation Scheme – Contractual Obligations – Contractual Indemnities – Contractual Interpretation Australia – Contractual Indemnification – Contractual Disputes – Workers Compensation Regulator

 

On 14 June 2016, the Queensland Parliament introduced the Workers’ Compensation and Rehabilitation (National Injury Insurance Scheme) Amendment Bill 2016 (Qld) (Bill).

The Bill

The Bill is part of a broader social reform which includes the establishment of the National Injury Insurance Scheme for Queenslanders, to commence from 1 July 2016.

The Bill proposes to restore the original policy intent of the Workers’ Compensation and Rehabilitation Act 2003 (Qld) (WCRA) and provide certainty to stakeholders after recent Court decisions have interpreted certain provisions of the WCRA in ways that could adversely affect the operation of the scheme.

If passed, the legislation will prevent employers from securing cover under their workers’ compensation insurance policies for contractual indemnities they have given to third parties for damages payable to workers. In the first reading speech for the Bill, the Minister for Employment and Industrial Relations said:

‘The Bill prevents the contractual transfer of liability for injury costs from principal contractors or host employers to employers with a workers’ compensation insurance policy such as subcontractors or labour hire employers and clarifies that an insurer will not be liable to indemnify an employer for a liability to pay damages incurred by a third party contractor under a contractual arrangement.’

The Amendments

The relevant sections of the Bill that will impact contractual liabilities are:

  • Clause 5: which proposes to amend the ‘Meaning of Damages’ in Section 10 of the WCRA to say:

‘(4) Further, a reference in subsection (1) to the liability of an employer does not include a liability to pay damages, for injury sustained by a worker, arising from an indemnity granted by the employer to another person for the other person’s legal liability to pay damages to the worker for the injury.’

  • And Clause 31: which will amend Chapter 5 of the WCRA as follows:

‘236B Liability of contributors

(1) This section applies to an agreement between an employer and another person under which the employer indemnifies the other person for any legal liability of the person to pay damages for injury sustained by a worker.

(2) The agreement does not prevent the insurer from adding the other person as a contributor under section 278A in relation to the employer’s liability or the insurer’s liability for the worker’s injury. 

(3) The agreement is void to the extent it provides for the employer, or has the effect of requiring the employer, to indemnify the other person for any contribution claim made by the insurer against the other person.

(4) In this section-

damages includes damages under a legal liability existing independently of this Act, whether or not within the meaning of section 10.’

For Employers

These amendments will mean that WorkCover Queensland will only be liable to indemnify an employer to the extent of the employer’s legal liability to the worker for damages under the WCRA. So, if an employer agrees to indemnify another party for damages beyond its legal liability under the WCRA, the workers’ compensation policy will not extend to cover those damages.

The changes may result in some employers exposed to liabilities for which they hold no insurance. However, in many claims, the addition of Section 236B(3) will allow contribution claims to be made by WorkCover, with third parties constrained in their ability to enforce indemnities against employers. What is unclear from the Bill and the WCRA, is whether an employer could secure cover for their liability to indemnify another party for ‘compensation’ under the WCRA (as opposed to ‘damages’). Also, the new Section 236B(3) may not operate to defeat actions in contract against employers by third parties (e.g. for breach of warranty or, for breach of an obligation to insure).

The industries that are most likely to be affected by the changes include: construction; mining; resources; and, transport. With these amendments, and the extension of the unfair contract terms regime to small businesses later this year, employers may wish to consider updating their service agreements to limit the risks to their business and follow current developments in the law.

The changes may see a rise in the number of employers requiring independent legal representation in common law claims. An employer who has agreed to indemnify another party may require independent legal advice about their contractual obligations, rights under the WCRA, the worker’s entitlements to damages under multiple regimes, apportionment and costs.

The Parliament has nominated the Finance and Administration Committee to consider the Bill.  To read the Bill in full, click here.  To read the Queensland Parliament’s first reading speech, click here.

BOOK A FREE CONSULTATION for advice and information about a workers’ compensation or contractual indemnity dispute, by calling (07) 3067 3025 or contact us online.

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Kate DenningWorkers’ compensation changes to affect contractual indemnities
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Back injury answering work mobile arose ‘in the course of employment’

Back injury answering work mobile arose ‘in the course of employment’

Injury in the course of employment – Injury during the course of employment – Injury working from home – Injury working remotely – Workers Compensation Lawyers for Employers – Workers Compensation Lawyers Qld

Ziebarth v Simon Blackwood (Workers’ Compensation Regulator) [2015] QIRC 121

The Queensland Industrial Relations Commission (QIRC) has upheld an appeal of a worker for acceptance of his claim for a back injury suffered while running to answer a work call on his mobile phone.

Facts

Mr Robert Ziebarth (worker) was employed as the Fleet Service Manager at Blenners Transport Pty Ltd (employer). He was responsible for maintenance repair issues associated with the employer’s fleet of trucks. The worker was required to work for at least 55 hours per week. He was also required to make himself available to work additional hours if required and was required to be on-call from time to time. He was supplied with a work telephone for the purpose of performing his duties. Importantly, it was agreed that at all material times the worker was ‘on-call’.

The worker had been chastised on a number of occasions by his superior in the past for not answering his mobile phone. At 10:00 pm his mobile rang with a distinctive ring tone for a work related call, while he was in the shower. He got out of the shower and slipped on the wet tiles, injuring his back.

Issue

The main issue for determination was whether the injury arose out of or in the course of the worker’s employment for the purposes of the Workers’ Compensation and Rehabilitation Act 2003 (Qld).

Determination

In a judgment delivered on 23 June 2015, O’Connor J, Deputy President of the QIRC determined the injury was suffered in the course of employment’ because:

  1. It was a term of the contract of employment that the worker make himself available to be on call from time to time.
  2. He was supplied a work telephone for the purpose of carrying out his employment duties, including those employment duties required of him whilst he was on call.
  3. He was on-call at the time of the incident.
  4. He was induced or encouraged to engage in the activity that he did.

The QIRC found that the work related injury was not, as submitted by the Workers’ Compensation Regulator, the running. The activity to be considered was the answering of the work mobile phone.

Considerations

With an increased demand for flexible work arrangements, this decision may be of interest to those in human resources and management.  Critical to this decision was the fact that the worker was ‘on-call’ and that the worker felt a need to answer the call because of ‘driver safety and the public safety’. A different outcome may occur in similar circumstances where staff elect to do work remotely but are not actually ‘on-call’.

BOOK A FREE CONSULTATION for advice and information about a personal injury matter by calling (07) 3067 3025 or contact us online.

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Kate DenningBack injury answering work mobile arose ‘in the course of employment’
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Bill to remove threshold to access damages in workers’ compensation claims

Bill to remove threshold to access damages in workers’ compensation claims

On 15 July 2015, the Queensland parliament introduced the Workers’ Compensation and Other Legislation Amendment Bill 2015 (Qld) (Bill).

If passed, workers who suffered an injury from 31 January 2015 onwards that have an accepted claim for compensation under the Workers’ Compensation and Rehabilitation Act 2003 (Qld), will be entitled to seek common law damages against their employer, regardless of how minor the injury may be.

For workers with injuries during the period 15 October 2013 to 30 January 2015 resulting in a Degree of Permanent Impairment (DPI) of 5% or less, the Bill provides for ‘additional lump sum compensation’ to be paid.

This legislation is likely to see a significant rise in the number of common law claims made against employers.

However, these changes will be welcomed by parties to claims regulated by the Personal Injuries Proceedings Act 2002 (Qld), who otherwise would have had no contribution from WorkCover (or self-insurers) in claims caught by the threshold.

The Bill also proposes to remove the ability of prospective employers to request the workers’ compensation claims history of job applicants.

The Bill does not address the Supreme Court decision of Byrne v People Resourcing (Qld) Pty Ltd & Ors

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Kate DenningBill to remove threshold to access damages in workers’ compensation claims
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Responding to a request for a Compulsory Conference

Responding to a request for a Compulsory Conference

by Kate Denning Google+

Compulsory Conference PIPA – Compulsory Conference Queensland – Compulsory Conference WorkCover Qld – Compulsory Conference Personal Injury

In claims regulated by the Personal Injuries Proceedings Act 2002 (Qld) (PIPA), Workers’ Compensation and Rehabilitation Act 2003 (Qld) (WCRA) and the Motor Accident Insurance Act 1994 (Qld) (MAIA) any party may ‘call’ a Compulsory Conference (conference).

So, you’ve been involved in a matter for some time now and another party calls a conference. What do you do?

Here’s our list of suggested ‘do’s’ and ‘don’ts’:

The Don’ts

Ignore the request

If a request for a conference is made, a response should be given within a reasonable timeframe. What’s ‘reasonable’ will vary for each matter, the number of parties involved and the time of year. For instance, if it’s October and parties are trying to arrange a mediated conference in a multi-party dispute for December, it would be helpful for all the parties to provide their availability within a day or two, to lock down a date.

Whenever a request for a conference is made, we should consider it possible that all communications exchanged between the parties thereafter could end up annexed to an affidavit in a Court application. If there’s a gaping whole in a chronology showing no response to a request from one party – that party should expect embarrassment at the hearing of the application.

Immediately agree to the request

Unless you have instructions from your client, intimate knowledge of the matter and you are confident that all outstanding steps, information and documents will be taken or gathered before a conference – do not just jump in and commit to a conference. Don’t agree to a conference just because there’s pressure from another party to provide an immediate response. This can be a trap that early career lawyers fall into and this kind of reactive advocacy could impact upon the outcome of the matter and the relationship with a client.

Cause unreasonable delay

If there are outstanding steps or investigations that should have been completed and they haven’t – don’t refuse to agree to a conference because that work hasn’t been done. A common object of each of the pre-court regimes is the early resolution of personal injury claims. Of course, we are all human (especially lawyers) and at times, some matters demand our attention over others.

A better approach could be to explain to the other party that you will need certain information or material in order to actively participate in a conference, sign a Certificate of Readiness or make a meaningful Mandatory Final Offer (MFO). Otherwise, consider suggesting a tentative date for a conference, proposing the matter proceed by way of informal conference or that a date for conference be scheduled within a defined timeframe.

The Do’s

Review the matter

The exchange of MFOs, Certificates of Readiness and the cost consequences that flow from MFOs, make holding a conference a step with serious consequences for clients and lawyers.

A Certificate of Readiness under the PIPA and WCRA, certifies that the lawyer (or the party) considers the party to be, in all respects, ready for the conference. In claims regulated by the MAIA – the legislation is more onerous – with the lawyer required to certify that ‘the party is in all respects ready for trial.

Some of the things to consider when reviewing a matter are whether:

  • all outstanding steps have been undertaken under the legislation.
  • all factual investigations and instructions from the client have been obtained.
  • adequate responses have been received from the Claimant, other parties or non-parties to all requests for information and documentation.
  • all necessary expert evidence has been provided.
  • the parties have undertaken disclosure.
  • all parties with a liability in contract, tort or under a policy of insurance have been joined to the claim.

Consider mediation

For multi-party disputes, it may be appropriate for a conference to proceed by way of mediation. A conference can proceed by way of mediation, ‘if .. the parties agree’. Parties are sometimes reluctant to suggest mediation. Perhaps this is because they’re concerned the other party/ies may think they really want the matter resolved or perhaps they’re concerned it could be seen as a concession of liability or risk exposure.

There can also be disputes about the contributions towards a mediator’s fee. Often a party who considers itself with no exposure will resist agreeing to meet their share of the cost of a mediator. This position might be justified, for instance, where one party is owed a contractual indemnity by another. However, these disputes can end up costing clients more in solicitor’s fees than the actual share of the mediator’s fee, so it’s best to stick to the real issues in dispute. Instead, make your attitude towards the claim known through Contribution Notices, liability responses or requests for particulars.

Of course, it’s not always appropriate to mediate. If the parties know that a matter is unlikely to settle at conference, it may be a cost that they’d prefer to avoid and reserve mediation for the litigated stage. Conversely, if the parties think a matter can be resolved because the parties are on the same page, then mediation may not be necessary.

Informal conferences

Informal conferencing can be useful where a party is not ready to participate in a conference under the legislation. The parties can agree to participate in an informal conference and agree to dispose with the requirement for a conference under the legislation to be held if the matter does not settle.

With this approach, parties don’t have the pressure of MFOs and Certificates of Readiness weighing upon the negotiations. Also, if the matter fails to resolve, they needn’t incur the legal costs of a conference at a later date.

Set a tentative date

In a multi-party dispute it’s a good idea for the parties to tentatively schedule a conference early in the matter to give the everyone a date to work towards. This is practical in multi-party disputes where claims may be regulated by two or more pieces of legislation. Also, with a date scheduled months in advance, it makes it difficult for one party to wriggle out with excuses. Medical examinations, factual investigations, requests to parties and requests to non-parties can all be worked into an agreed timetable.

Comments

The object of a conference is for a claim to be settled at an early stage, without the need for litigation. There’s no point in agreeing to a conference if the parties won’t be ready but one party should not cause unreasonable delay for the others.

For advice on insurance law matters, please contact us. Keep up to date with the latest news and developments in insurance law, by subscribing to our blog, InDefence.

BOOK A FREE CONSULTATION for advice and information about a personal injury matter by calling (07) 3067 3025 or contact us online.

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Kate DenningResponding to a request for a Compulsory Conference
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‘Actively Participating’ in a Compulsory Conference

‘Actively Participating’ in a Compulsory Conference

Compulsory Conference PIPA – Compulsory Conference Queensland – Compulsory Conference WorkCover Qld – Compulsory Conference Personal Injury

Parties to a Queensland personal injury claim are required to attend a Compulsory Conference (conference) and ‘actively participate’ in an attempt to resolve the claim, before proceedings can be started in a Court.

An exception is made for a party, that has a ‘reasonable excuse’ not to do so.

A variety of methods are used by parties and their lawyers to try to get the most out of a conference and it’s interesting to see how the meaning of ‘active participation’ is interpreted in practice.

Some of the methods that we see arise are:

1. Passive

In a multi-party dispute, it’s usually easy to identify the party who’s taking a passive role before the matter gets to a conference. The party may be non-communicative or just generally indifferent about the progress of the matter.

The idea that a party could be passive at conference is at odds with the requirement under the legislation for parties to ‘actively participate’. However, in certain circumstances, it’s appropriate for a party to adopt that position – they may have a ‘reasonable excuse’. For example, where a Respondent or Contributor has a reasonable suspicion of fraud.

For the remaining parties, it’s important that the passive party is identified prior to the conference and advice is provided to respective clients about the likely attitude of that party in negotiations.

If other parties see a significant exposure for the party taking a passive role, it could be useful to have some pre-conference discussions about liability, contribution or any other relevant issues. If you don’t, you might be surprised to find that a conference is a waste of time and money.

2. Aggressive

The Australian Solicitors Conduct Rules require solicitors to be, ‘courteous in all dealings in the course of legal practice’. So its unfortunate when aggression (as opposed to robust debate) is seen at conferences. Perhaps it’s an attempt to rattle the other person or, perhaps it’s because the aggressor isn’t familiar enough with the matter.

For those on the receiving end, it can feel like a personal attack and there’s simply no valid reason for this kind of conduct. It does nothing to facilitate the negotiation process. Complaints to regulating bodies may be a consideration depending on the circumstances.

3. Measured

Most conferences proceed with numerous offers exchanged, with those offers moving gradually towards an acceptable position. The advantage of this ‘death by a thousand cuts’ method of negotiation is that the client may feel as though they have remained in control throughout the negotiation process and have gotten the ‘best deal’, where a settlement is achieved. Of course, it’s possible that this approach may frustrate some opponents or their representatives, who are seasoned negotiators and believe that it’s best to just move the negotiations along more quickly.

4. Conservative

When information remains outstanding at a conference, one or more parties may decide it’s best to, ‘keep their powder dry’ and to make few concessions in the negotiations. When MFOs are ultimately exchanged, they may be far apart, with parties hoping to achieve a better outcome through a litigated mediation.

This approach might be appropriate in a case where, for example, neither party has obtained expert medical evidence about a subsequent injury. In such a scenario, the parties know that more evidence will need to be gathered prior to a trial but do not know if that evidence will help or hurt their case.

This approach is less likely to arise in a claim that is regulated only by the Workers’ Compensation and Rehabilitation Act 2003 (Qld), where orders about costs flow only from MFOs. In workers’ compensation claims, the parties are under pressure to make their ‘best offer’ at conference.

Where claims are regulated by the Personal Injuries Proceedings Act 2002 (Qld) and the Motor Accident Insurance Act 1994 (Qld), parties may feel that they can hold out for a better offer at a litigated mediation.

5. Surprise!

If you have ever been at a conference where surveillance has been revealed, you’ll understand this technique perfectly. Of course, documents and information that are required to be disclosed, should be provided on an ongoing basis in accordance with the legislation. Some innocent examples of late disclosure that arise may include providing file notes from telephone attendances with medical experts or witnesses just prior to, or, at conference (where late investigations cannot be avoided). If late disclosure obstructs the negotiations, then it may be appropriate for the party at a disadvantage to propose that the conference be adjourned and re-convened at a later date. Intentional deception of an opponent by a lawyer can amount to professional misconduct. 

6. Efficient

‘Can we cut to the chase?’

‘Can we split the difference’?

If you’re in a conference where opposing parties or their representatives are on the same page, then it’s likely that someone will try and move the negotiations along with questions like these. The difficulty with agreeing to this type of request, is that you won’t necessarily know if you could have achieved a better outcome by continuing to negotiate, by the exchange of more offers.

An efficient negotiator might also call for MFOs early in the negotiations. This may be done in response to slow movement in offers by the other party, to force the other party to make a significant concession. Where a claim is capable of resolution at conference, this technique may totally obstruct negotiations and actually backfire on the person calling for MFOs. It should not be done to bluff the opponent/s and of course, only upon instructions from the client.

Comments

‘Active participation’ can mean many very different things at a conference. It’s a good idea to tailor your approach for conference to your matter, your client, your opponent/s and for the advantages to be gained under the legislation regulating the claim.

To keep up to date with the latest news and developments in insurance and personal injury law, subscribe to our blog InDefence.

BOOK A FREE CONSULTATION for advice and information about a personal injury matter by calling (07) 3067 3025 or contact us online.

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Kate Denning‘Actively Participating’ in a Compulsory Conference
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Making a Mandatory Final Offer in Queensland

Making a Mandatory Final Offer in Queensland

Compulsory Conference PIPA – Compulsory Conference Queensland – Compulsory Conference WorkCover Qld – Compulsory Conference Personal Injury

by Kate Denning Google+

Introduction

In Queensland, parties to a personal injury claim are required to make a ‘mandatory final offer‘ or ‘written final offer‘ (MFO). An MFO is made at the end of an unsuccessful pre-court Compulsory Conference in claims regulated by the:

Here are just some of the irregularities that can arise with MFOs in Queensland claims:

No Mandatory Final Offer

Cost consequences flow from an MFO. Any cost orders ultimately made will depend on: the amount of the offers compared with any judgment; the legislation regulating the claim; offers made during the litigation (except in WCRA claims); and, in limited circumstances, case building that occurs once the matter is litigated. To avoid the potential for adverse cost consequences, a party may agree to participate in settlement negotiations on an informal basis only, so that they are not required to exchange MFOs (or provide a Certificate of Readiness). In multi-party disputes, this strategy may be appropriate for a PIPA Respondent that has been joined to a claim late in the piece. Otherwise, a refusal by one party to have a level playing field with the others for no valid reason, is likely to impact settlement negotiations.

Offers inclusive of costs

Under the PIPA and MAIA, where an offer is at or below the ‘upper offer limit‘, parties are required to make offers which are exclusive of costs. Otherwise, parties are permitted to make MFOs which are inclusive of costs.  These types of MFOs should be made with caution.  Offers which are inclusive of costs have received unfavourable treatment by the courts. The difficulty with these types of offers, is that there’s no way for a court to identify from the MFO the amounts allowed for damages and costs.

Offers fixing an amount for costs

A Respondent may make an offer which fixes an amount for costs. The advantage of doing so is that, if accepted, the Claimant has agreed to an amount for costs and no further negotiations are necessary. However, where an offer fixes costs and that offer is rejected – a question might arise later on about whether the Claimant was justified in rejecting it because the allowance for costs was too low. As with offers which are inclusive of costs, these types of offers should be made with caution.

Offers between Contributor and Respondent

Under the PIPA, parties to a contribution claim are not required to exchange MFOs. However, under the WCRA, both Contributors and Respondents are required to make MFOs. The result of this is that for claims regulated by both the WCRA and PIPA, PIPA Contributors may choose to make no offer towards settlement during pre-court negotiations, as a matter of strategy. It may be in the interests of a PIPA Contributor to take a passive role in the claim and see if the other parties will reach a compromise without any offer from them towards a settlement. However, in a claim where a PIPA Contributor has significant exposure, this approach may simply compel the parties to litigate.

Joint MFOs

For claims regulated by the WCRA, costs only flow from the MFO. So, where a claim is regulated by the WCRA and PIPA, the Respondent and Contributor/s in the WCRA claim will be reluctant to make an MFO of $nil. The result is that at Compulsory Conferences there is more pressure on the WCRA parties, than the PIPA parties, to make an appealing MFO to a Claimant. Conversely, if a WCRA party has made reasonable attempts to resolve a matter during the pre-court stage, then they may be reluctant to co-operate with a PIPA party that is keen to negotiate well into the litigation.

Attaching a Release and Cost clauses

Care should be taken when drafting the MFO. If the MFO refers to a Release and a copy of that Release is not attached to the MFO, that may affect the validity of the offer. For claims under the PIPA and MAIA, where a Release is attached and there is otherwise no obligation upon a Claimant to sign a Release, a question may arise about whether the terms of the Release affected the acceptability of the Respondent’s offer. Consideration should also be given to the wording of any clause about costs in the MFO. Particularly if the MFO refers to costs being payable in anyway other than ‘in accordance with the’ relevant legislation regulating the claim.

Clash of the MFOs

MFOs are ‘exchanged’ and so parties do not usually know what offer/s will be made by their opponent/s. In rare circumstances, two parties may make MFOs to each other which are less favourable than the offers put to them.  For instance, Company X offers to settle a Claimant’s claim for $100,000 but the Claimant offers to settle her claim for just $80,000. Parties may attempt to address this by adding a clause to the MFO to the effect that the document serves as an acceptance of any offer that is less/more than the offer made by their opponent.

Expiring limitation period

A Claimant must commence proceedings within 60 days of a Compulsory Conference and cannot start those proceedings while the MFOs are open. MFOs must stay open for 14 days (10 business days for WCRA claims). There is no discretion under the legislation for that time to be abridged. So, for claims regulated by the PIPA and MAIA, a Compulsory Conference must be held no later than 10 business days prior to the expiration of a limitation period, to allow the MFOs to expire and the Claimant to commence proceedings.

Getting it right

There’s no set formula for getting your MFO ‘right’. However, each piece of legislation has its own nuances. It’s important to be familiar with the legislation that regulates both your claim AND your opponent’s. Adequate preparation before a Compulsory Conference will facilitate negotiations and prevent confusion between parties and their legal representatives when MFOs are exchanged.

For the latest news in insurance and personal injuries law, subscribe to our blog, InDefence.

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Kate DenningMaking a Mandatory Final Offer in Queensland
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InDefence covers legal and technical issues in a general way. Changes in circumstances or the law may affect the completeness or accuracy of the information published. InDefence is not designed to express opinions on specific cases, to provide legal advice or to establish a relationship of client and lawyer between Denning Insurance Law and the reader, or any third party. No person should act or refrain from acting solely on the basis of this publication. You should seek legal advice particular to your circumstances before taking action on any issue dealt with in this blog.