What determines whether costs under an offer of compromise can include costs in the offer made?

The determination of whether costs under an offer of compromise can include costs hinges on the specifics of the claim regarding costs. If a claim states an amount for costs, this affects the legitimacy of the offer. In New South Wales, for costs to be included in the offer, the claim must not explicitly state an amount for costs. This is to ensure clarity and to avoid any ambiguity surrounding how costs are treated in the context of the offer. The rationale is to ensure that parties are negotiating with a clear understanding of the terms, without pre-determined costs influencing the offer. By requiring that costs not be specified, the law aims to facilitate genuine negotiation and settlement discussions.

Other options do not accurately address this fundamental aspect of making an effective offer of compromise. While the timing of an offer (such as two months before trial) or court approval may influence procedural aspects, they are not central to the requirement concerning whether costs can be included based on the statement of the claim. Furthermore, the inclusion of costs separately is not a precondition; rather, the focus is on whether costs are stated in the claim at all. This distinction is crucial in understanding the framework of offers of compromise within the procedural law in New South Wales.