Rejected settlement offer costs employer dearly …

In a recent Personal Grievance case, the ERA awarded an employee of less than 3 months around $20,500, plus interest, in compensation.  Unfortunately for the employer, the employee, through her lawyer, had offered to settle the grievance for a lot less – but the employer had refused!

To add insult to injury, the settlement offer was contained in “without prejudice save as to costs” correspondence.  Normally without prejudice material is not able to be disclosed to the ERA, and awards for costs are set at certain levels.  Where a without prejudice save as to costs offer is made however, the normally “without prejudice” material can be used to show that more than the normal level of costs should be awarded.

In this case, instead of set costs for a half day hearing of $1,750, the ERA ordered the employer to pay the employee’s actual Legal Aid costs of $2,797.

If the employer had taken advice on the employee’s settlement offer, not only would the compensation paid to the employee have been much less, it wouldn’t have suffered the additional penalty of increased costs.