A missing explanatory statement did not unmake the insurer’s mandatory final offer under s 55F(2)

In a Queensland CTP claim the costs risk is largely set long before trial, at the compulsory conference, where the parties exchange their mandatory final offers. Each side files a copy at the court later, in a sealed envelope the court does not open until it has decided the claim. Under the Motor Accident Insurance Act 1994 (Qld), where the court awards an amount at or below the upper offer limit, those offers largely determine who pays the costs of the proceeding, subject to the qualifications the Act itself contains. They do not reach the costs of an appeal.

The rule that does the work is s 55F(2). Where a court awards an amount equal to the lower offer limit or less, the court must apply the principles in that subsection, and has no discretion about it. If the award also comes in at or below the insurer’s mandatory final offer, the insurer gets its costs on the standard basis from the day the proceeding started.

McMillan v Trad (No 2) [2026] QSC 219 asks what happens when the insurer’s own offer was procedurally defective. The Regulation requires an insurer making a settlement offer to a claimant who has no lawyer to attach an approved explanatory statement. In this case the insurer did not attach one. It raised the point itself and asked the Court to hold that its own non-compliance made no difference to s 55F(2). McCafferty J agreed.

What the Court decided

The decision is a costs judgment of the Supreme Court of Queensland, Trial Division, delivered on 15 September 2026 and heard on the papers. It follows an assessment of damages in the same proceeding on 8 June 2026, reported as McMillan v Trad [2026] QSC 108.

A note on the citation, because the sources disagree. The coversheet gives [2026] QSC 219. AustLII publishes the same reasons under the heading [2026] QSC 21 and carries nothing at 219. The court’s own number is the better one, since judgments delivered either side of it sit in the 216 to 217 range. Practitioners searching for it may need both.

The facts are short. The parties held a compulsory conference on 17 November 2021. The claimant was not legally represented and the claim did not settle. Both sides made mandatory final offers, the insurer’s being the lower of the two, and the proceeding was commenced on 31 January 2022. When damages were assessed, the award fell below the lower offer limit and also below the insurer’s offer. The orders were that the claimant pay the insurer’s costs of the proceeding on the standard basis from 31 January 2022, to be assessed if not agreed, and that those costs be set off against the judgment amount.

One feature of the case shapes everything that follows. The claimant appeared for himself and filed an affidavit and four exhibits, but, as the Court recorded, “the affidavit advances no positive submission on costs and does not address the second defendant’s submissions”. The explanatory statement point was not his argument. It was raised by the insurer, which disclosed its own non-compliance and submitted that the omission did not affect the operation of s 55F(2).

The two thresholds that do the work

Section 55F is often described loosely as the provision that penalises a claimant who beats nothing. It is more particular than that, because two separate comparisons have to be made before paragraph (c) is reached.

The first is against the statutory limits. Section 55F(1) brings the section into play where the court awards an amount equal to the upper offer limit or less, and it does not apply to the costs of an appellate proceeding. Section 55F(2) then applies only where the award is equal to the lower offer limit or less. An award between the two limits falls into s 55F(3), which produces a different and less severe set of outcomes.

The second is against the offers themselves. Once s 55F(2) is engaged, where the award sits relative to the two mandatory final offers selects the paragraph:

In each case no award is made for costs incurred up to the date the proceeding started. The claimant in this case landed in the third row, and the Court made both comparisons expressly, recording that the judgment amount was less than the lower offer limit “and also less than the second defendant’s mandatory final offer”.

One qualification belongs with all of this. Where an award is affected by factors that were not reasonably foreseeable by a party when it made its mandatory final offer, s 55F(7) lets the court, if satisfied it is just to do so, make the costs order under s 55F(2) or s 55F(3) as though the reference to a mandatory final offer were a reference to a later offer made in the light of those factors. The offers exchanged at the conference are the usual measure, not an invariable one.

The limits are not fixed figures. Section 4 defines both offer limits as the amounts fixed by the Minister under s 100A, and s 100A requires a notice before each financial year starts fixing them for that year. The current instrument is the Motor Accident Insurance Indexation Notice 2026 (Qld). The limit that matters is the one applicable to the case, not the current one, so the year has to be checked rather than assumed.

The explanatory statement, and why its absence did not matter

Section 20(1) of the Motor Accident Insurance Regulation 2018 (Qld) provides that an offer of settlement made by an insurer to a claimant must, if the claimant is not represented by a lawyer, be accompanied by an explanatory statement in a form approved by the commission. The Court set out the approved wording. It tells the claimant that acceptance “will finalise your claim and you will not be able to make any further claim or receive any further payment”, and suggests obtaining independent advice.

The insurer did not provide it, and the Court gave two reasons for holding that this made no difference. The first is the absence of any stated consequence. As the Court put it, “neither the Act nor the Regulation prescribes a consequence for failing to accompany an offer with the explanatory statement”, and in particular neither says that non-compliance invalidates the offer.

The second reason is purposive, and it is the one that decides the point. The approved statement speaks only to what happens if the claimant accepts. It says nothing about what happens if the claimant refuses and then does worse at trial. The Court drew the distinction directly, holding that s 20 “is directed to ensuring that an unrepresented claimant understands the finality of accepting an offer, not to warning the claimant of the possible costs consequences of rejecting it”. The omission therefore did not prevent the insurer’s offer “from constituting a mandatory final offer for the purposes of s 55F(2)”.

Section 55F(2)(c) then applied. The Court held that the section “is expressed in mandatory terms and confers no discretion”, with the consequence that the claimant’s possible impecuniosity, which the Court was prepared to infer from his lack of representation and a granted application to reduce the filing fee, was irrelevant. Costs were also ordered to be set off against the judgment amount, the Court finding that the insurer’s recoverable costs and outlays were likely to exceed it.

What the decision does not decide

The holding is narrower than a summary of the result suggests. It decides that a s 20 omission does not stop an offer being a mandatory final offer for the purposes of s 55F(2). Those are the Court’s words and they confine the conclusion. Whether a breach of s 20 might matter for some other purpose was not considered.

Nor does the judgment decide what consequence a s 20 breach does attract. It holds only what the omission does not prevent. Notably, the reasons do not mention s 55F(4), which provides that despite the limitations imposed by the section, a court may award costs to compensate a party for costs resulting from another party’s failure to comply with procedural obligations under the part. That is the provision in which an argument about an insurer’s procedural default would naturally be located, and it was neither argued nor addressed.

The no-discretion finding should also be read for what it says. The Court held that s 55F(2) confers no discretion. It did not hold that no power anywhere could give an insurer’s default weight.

Finally, this is a decision of a single judge at first instance, determined on the papers, on the insurer’s own framing of a point the claimant did not argue. It does not bind another judge of the Court. That said, the reasons at paragraphs [12] and [13] are expressed categorically rather than as a product of the absence of a contradictor.

What this means in practice

For anyone advising a claimant, the practical effect is that the costs calculus at a compulsory conference cannot be run on the assumption that a missing explanatory statement will take the insurer’s offer out of contention. On this decision an offer that breaches s 20 is still the number against which the award will be measured, for the purposes of s 55F(2). Whether some other procedural defect might produce a different answer is not a question this judgment reaches.

The decision also exposes a real gap in the scheme, and it is the most interesting thing about the case. The approved statement exists to protect unrepresented claimants, and the protection it gives is a warning about finality on acceptance. The serious exposure runs the other way, in the costs consequence of refusing. On the Court’s reasoning the statement was never designed to address it, and the Court was plainly right about what the form says. Whether the form should say more is a question for the Motor Accident Insurance Commission rather than the courts.

Where an insurer’s failure to attach the statement is to be given weight, this decision closes one route to it, the validity of the offer for the purposes of s 55F(2), and leaves the rest alone. Section 55F(4) is the obvious place to look next, and this judgment says nothing about it.

Published 16 September 2026.

Where this leaves the costs rule

The rule the case states is a narrow one and it is worth stating accurately. Where a CTP award lands at or below the lower offer limit and at or below the insurer’s mandatory final offer, s 55F(2)(c) applies and the insurer takes its costs on the standard basis from the start of the proceeding, and a failure by the insurer to attach the approved explanatory statement to its offer does not disturb that result. What the decision does not do is settle what such a failure does produce, and the provision in which such an argument would most naturally be located was not before the Court.

Related reading

• Greenall v Amaca (No 2), costs and the 2025 Regulation
• How personal injury costs work in Queensland
• CTP claims in Queensland: the complete guide
• Contact Fraser Lawyers

Source: McMillan v Trad (No 2) [2026] QSC 219, Supreme Court of Queensland, McCafferty J, 15 September 2026, published by AustLII as [2026] QSC 21. The provisions discussed are in the Motor Accident Insurance Act 1994 (Qld) s 55F and the Motor Accident Insurance Regulation 2018 (Qld) s 20.

This article is general information only and is not legal advice. Queensland law and the figures referred to can change, and every situation turns on its own facts. Contact Fraser Lawyers for advice specific to your circumstances.

If you would like to discuss your matter, you can book a consultation or call (07) 5554 6116.