Tarres v Rozelle Carriers Pty Ltd (No 2)

In Tarres v Rozelle Carriers Pty Ltd (No 2), the plaintiff, Tarres, sought damages for injuries sustained in a motor vehicle accident. The defendants were Rozelle Carriers and two insurers, which provided the defence for the proceedings. The plaintiff's original claim included a negligence claim and a claim under the Occupational Health and Safety Act 2000 (NSW). The plaintiff abandoned the claim under the Occupational Health and Safety Act, leaving only the Motor Accidents Compensation Act 1999 (NSW) claim. The second insurer contested the proceedings on the basis that the cause of action travelled outside the scope of the Motor Accidents Compensation Act, leading to it being treated as a separate party in the trial.

The court was required to determine whether the second insurer was liable for costs incurred by the plaintiff and the first insurer. The legal issues included whether the additional pleading by the second insurer warranted additional costs, whether the second insurer's approach was unduly restrictive and unnecessary, and whether there were opportunities for sensible negotiations to develop a cost-effective defence. The court had to consider whether the second insurer's actions led to an increase in costs and whether it was reasonable for it to be held liable for those costs.

The court found that the additional pleading by the second insurer did not necessitate additional investigation or evidence, and its approach was unduly restrictive and unnecessary. The second insurer did not engage in sensible negotiations to develop a cost-effective defence, leading to an increase in costs. The court held that the second insurer was liable for the plaintiff's costs and the costs of the first insurer for the period the first insurer indemnified the defendants. The second insurer was ordered to pay the plaintiff's costs and the costs of the first insurer for the period the first insurer indemnified the defendants.