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Plaintiff beats MFO at trial and seeks indemnity costs


18 December 2013

On 5 December 2013, Judge Kingham in the District Court of Queensland at Mackay, considered the appropriate costs order to be made in a case where the plaintiff was awarded $126,035.61 in damages which was only slightly more than his mandatory final offer under the Motor Accident Insurance Act 1994 (Qld) (MAIA) of $120,000.

The plaintiff sought costs on an indemnity basis (all costs and outlays incurred except where unreasonable in amount) because the judgment sum exceeded his mandatory final offer made under section 51C of the MAIA.

The second defendant insurer argued that although the judgment was more favourable to the plaintiff than his mandatory final offer of $120,000, it was only marginally so and the amount awarded also fell within the jurisdiction of the Magistrates Court (ie awards under $150,000 at the time proceedings filed) not the District Court.

Judge Kingham noted that the second defendant insurer had not alerted her to any substantial change in the plaintiff’s case between the making of the mandatory final offer and the hearing which could support an argument that indemnity costs should not be made. Her Honour also made the point that the plaintiff had made no argument as to why costs should be assessed on the District Court rather than the Magistrates Court scale.

Judge Kingham therefore ordered that the second defendant pay the plaintiff’s costs of and incidental to the proceedings assessed on an indemnity basis but (importantly for the insurer) calculated on the Magistrates Court scale.