Offer of Compromise (Form 11)

Under rule 89 of the Magistrates Court (Civil Division) Rules 1998 (Tas), a party may file and serve an offer of compromise on any other party at any time before final judgment. The offer may be subject to conditions and may relate to liability, quantum, issues in the proceeding or any order or relief sought (r 89(2)-(3)). It must say whether it includes costs and interest, or the amount offered for costs and interest up to the date of the offer (r 89(4)); if it does not, it is taken to refer only to the money claimed and the accepting party may apply for costs and interest on top (r 89(5)). Offers matter for costs: if a claimant's final judgment is equal to or less than the defendant's offer, unless the Court orders otherwise the claimant only gets costs up to 14 days after service of the offer and the defendant gets costs after that (r 141(2)). The magistrate hearing the trial is not told about the offer before final judgment (r 96(2)).

When you need it

• You are a defendant and want to put a realistic offer on the record to protect yourself on costs.
• You are a claimant and want to make a formal offer to accept a sum to settle.
• Informal negotiations have stalled and you want an offer the other side can accept by having judgment entered.

1. 1

   Heading and addressee

   Enter the registry, its address, the action number, the claimant and defendant, and in 'To' the party the offer is made to.

2. 2

   Who offers and to whom

   Name the party making the offer and tick whether they are the claimant, defendant or third party; then name and tick the party whose claim the offer is to settle.

3. 3

   Amount

   Insert the sum offered in full and final settlement.

4. 4

   Interest and costs

   Delete either 'includes' or 'does not include' interest and costs. Rule 89(4) requires the offer to say this or state the amount for costs and interest.

5. 5

   Conditions

   Set out any conditions, such as a time for payment. Keep them clear; conditions are allowed (r 89(2)).

6. 6

   Date, sign and footer

   Date and sign the offer and complete the 'filed by' footer with your address for service.

• File the offer at the registry and serve it on the party it is made to, before final judgment (r 89(1)).
• It is not an originating process, so rule 40(3) service methods are available, such as ordinary prepaid post to the address for service. A posted document is taken to be served 2 business days after posting (r 41(1)(c)).
• To accept, the other party can file and serve a judgment in the terms of the accepted offer, or ask a registrar to enter judgment in those terms (r 91).
• An offer not yet accepted can be withdrawn or varied with Form 12 (r 90).

• Do not attach the offer to documents going to the trial magistrate; its existence is kept from the magistrate until after final judgment (r 96(2)).
• If you withdraw the offer, the costs consequences in rule 141(2) do not apply (r 141(3)).
• Rule 142 can also cut the costs a party recovers where no offer was filed, or where final judgment is for 200% or more of an offer made on the operative date. Read the rule if costs are significant.