Case update: The Indemnity Games

The recent decision of Neubauer v Amaca Pty Ltd [2026] QSC 64 (‘Neubauer’) highlights the difficulties parties may face when attempting to displace r 360(2) of the Uniform Civil Procedure Rules (‘UCPR’) in relation to indemnity costs.

Facts

On 19 December 2025, the plaintiff made an offer pursuant to r 353 of the UCPR to settle his action for the sum of $1M plus costs. This offer was rejected by the defendant.

On 26 February 2026, judgment was entered in favour of the plaintiff against the defendant in the sum of $1,111,200.

The plaintiff subsequently sought an order under r 360(2) of the UCPR that the defendant pay the plaintiff’s costs on a standard basis up to 19 December 2025 and on an indemnity basis from 20 December 2025.

Rule 360 of the UCPR

Rule 360(2) provides that unless the defendant shows that another order for costs is appropriate in the circumstances, the Court must order the defendant pay the plaintiff’s costs on a standard basis up to and include the day of service of the offer, and on an indemnity basis thereafter.

In issue

The defendant submitted that another order for costs was appropriate in the circumstances under r 360(2) of the UCPR on the basis that:

• (a) The plaintiff served six further expert reports that were not delivered until after the offer was made
• (b) The plaintiff was certified as medically unfit to be cross examined at trial
• (c) The ultimate outcome achieved by the plaintiff was not significantly more than the offer.

Court’s decision

The Court considered the above factors but was not convinced that another order for costs was appropriate in the circumstances, as contemplated by R360(2) of the UCPR.

In reaching this decision, the Court noted:

• While there was a point to be made concerning the changing life expectancy evidence and its impact upon quantum assessment, the Court did not consider it so significant that the defendant could not have taken that uncertainty into account. The Court also weighed that given this matter was a jury trial, precision of assessment was less likely.
• While the Defendant was substantially disadvantaged by the unavailability of the plaintiff for cross examination, the defendant was well aware of this possibility as the condition suffered by the plaintiff could cause changes to heath and capacity at very short notice. Further, the admission of evidence without the plaintiff being available for cross examination is adequately addressed by s 92 of the Evidence Act 1977 (Qld).
• The wording of r 360(2) provides that “an order no less favourable than the offer”, which suggests that even truly marginally better offers still, prima facie, invoke the rule.

Practical tips

This case highlights the need for defendants to give serious consideration to offers made, with the common knowledge that litigation is “inescapably chancy”.

Most significantly the defendant argued that the subsequent expert evidence served, addressing the plaintiff’s life expectancy, impacted upon the Court’s award for damages and care and assistance. However, it is not always possible to know exactly what effect any evidence will have at trial and defendants must weigh this uncertainty when considering any offers made.

Further, even in circumstances where rejection of an offer of settlement is reasonable, it will not displace r 360(2) of the UCPR. If is for defendants to seriously consider offers weighing the proper compromise of litigation, the vigors and uncertainties of trial and the (oftentimes) competing private and public interests of litigation.

^{The information in this publication is provided for general purposes only. It is not to be relied on as a substitute for legal advice. Crown Law and the Department of Justice accept no liability for losses caused by reliance on the material in this publication. Formal legal advice should be obtained for particular matters.}

^{Authors: Elizabeth Walker and Katrina Mawer}