Rail Corporation NSW v Vero Insurance Ltd (No 2)

In the case of Rail Corporation NSW v Vero Insurance Ltd (No 2), the primary dispute was over indemnity costs, specifically whether the defendant, Vero Insurance Ltd, was entitled to indemnity costs for failing to accept two offers made by the plaintiff, Rail Corporation NSW. The matter was heard in the Supreme Court of New South Wales. The plaintiff had made two offers, the first of which was a Calderbank offer, and the second was an offer of compromise. The defendant did not accept either offer, and the plaintiff ultimately achieved a better outcome than the offers suggested. The central legal issues were whether the defendant's failure to accept the offers was unreasonable and whether the offers complied with the relevant provisions of the Uniform Civil Procedure Rules 2005 (NSW).

The court found that while the first offer was a Calderbank offer, the absence of any reference to it being such or being "without prejudice" did not necessarily make the defendant's refusal unreasonable, given the sophisticated nature of the parties involved and the complexity of the interest calculations required within a short timeframe. The court further examined whether the second offer was a complying offer of compromise under the UCPR. Despite divergent authorities on the interpretation of the statutory provisions, the court determined that the offer was indeed a complying offer of compromise, explicitly mentioning costs. In the alternative, the court considered whether the offer could be analogous to a Calderbank offer, finding it to be a genuine informal offer to settle. Consequently, the court concluded that it was not unreasonable for the defendant not to accept the offer, and indemnity costs were awarded to the plaintiff.