Jones v Bradley (No 2)

The case of Jones v Bradley (No 2) concerned an application for costs following settlement negotiations. The dispute involved the appellant and the respondent, with the court being asked to determine the appropriate basis for awarding costs, specifically in light of an offer of compromise made by the respondent.

The central legal issue before the court was the effect of a *Calderbank* offer on the court's discretion in awarding costs. Specifically, the court had to consider two differing lines of authority: one that suggested a prima facie presumption that a party rejecting an unaccepted offer, and subsequently receiving a less favourable outcome, should pay the other party's costs on an indemnity basis from the date of the offer; and another line of authority that rejected this presumption, holding that the exercise of discretion depends on all relevant circumstances of the case.

The court's reasoning favoured the approach that all circumstances must be considered when determining costs following a *Calderbank* offer. It was held that while the making of an offer and a less favourable outcome for the offeree are matters to which the court may have regard, they do not automatically lead to an order for costs on an indemnity basis. The court emphasised that the policy behind *Calderbank* offers is the promotion of settlement, and an offeree can reasonably refuse an offer without necessarily suffering adverse cost consequences. The ultimate question is whether the offeree's failure to accept the offer, in all the circumstances, warrants a departure from the ordinary rule as to costs.

The court ordered that the respondent pay the appellant's costs on a party/party basis for a specified period, and thereafter on an indemnity basis for the costs of the appeal from a later date.