13.10.2014Lictor Anstalt v Mir Steel UK Ltd.; Libala Ltd.  EWHC 3316 (Ch)
Key areas: relief from sanction; High Court
This was a judgment following a 9-day liability trial, and an application to rely on evidence served out-of-time.
After the end of day 7 of the trial, the Claimant issued an application to rely on a witness statement; or to rely on related documents under the s. 9 Civil Evidence Act 1995; or for relief from sanction.
The evidence related to incorporation within Liechtenstein, and over whether another party in the claim had authority to sign documentation, and the Claimant did not suggest that the new witness had to be cross-examined.
The Court held that the evidence should have been served 19 months ago, and disclosure at this stage was disruptive. It also held that the error was entirely down to the Claimant, but was unintentional.
As a result, the Claimant was unable to rely on the statement.
The Court then turned to the related documentation. It held that the documents were of a Public Register, and so s. 9 was not relevant, but they too should have been served 19 months ago.
However, the Judge did grant relief from sanction, and that the documents could be dealt with in written submissions or on oral closing statements. He ruled this after taking into account all the facts, including efficient conduct and justice to the parties, and that the evidence related to a “very limited” issue.
10.10.2014Weatherford Global Products Ltd. v Hydropath Holdings Ltd.; Clearwell International Ltd.; MSL Oilfield Services Ltd.; Clark; Lauretti; Stefanini  EWHC 3243 (TCC)
Key areas: non-party costs orders; party’s conduct; High Court
This was a hearing to determine applications for non-party costs orders against the Seventh Party (Stefanini).
The First and Second Defendants had been ordered to pay the Claimant’s costs of its claim on the Standard Basis; and the costs of the Claimant, Fourth, Fifth and Sixth Parties on the Indemnity Basis in relation to their own counter-claim. Interim costs payments totalling £975,000 were also ordered, but had not been paid.
The Court held that the Seventh Party was the “controlling mind” of the First and Second Defendants, based upon their company accounts, including a £800,000 loan he made during the claim; shareholdings; and his own witness evidence. It also held that he would personally benefit from the claims; and that it was “positively unlikely” he would have acted differently had he been warned that a costs order could be made against him.
The Court also held that the counter-claims were “speculative”, and had no real analysis.
As a result, the Court held that the Seventh Party personally pay the costs of the counter-claims, but ruled against ordering him to also pay the costs of the claim.
10.10.2014OOO Abbott; Chasmer v Design & Display Ltd.; Eureka Display Ltd.  EWHC 3234 (IPEC)
Key areas: Part 36 offer; Patents Court
This was a hearing to determine damages in the Intellectual Property & Enterprise Court.
The claim against the First Defendant settled for £488,173.
At trial it was held that the Second Defendant had infringed, with the Claimants seeking an account of profits. After a CMC on the account issue, the Claimants accepted the Second Defendant’s Part 36 offer. The Second Defendant later told the Claimant that they had sold about 6-7 times more than thought when making the Part 36 offer, and so agreed to set-aside its acceptance.
Under CPR 63.17A, damages are capped at £500,000, and so the total settlement was clearly in excess of this sum.
The Claimants submitted that the cap related to amount payable by individual Defendants, not the total due.
The Court considered that based upon its wording, the cap applied to the total, as a Claimant has an option of issuing or transferring the proceedings to the High Court, where the cap does not apply; or could issue separate IPEC proceedings against each Defendant, whereby each claim would be limited to £500,000.
It also held that at this stage, given that the Claimants suggested they would apply to transfer the proceedings against the Second defendant, it could not make a further ruling on the claim against the First Defendant.
The Court also noted that the Claimants had beaten their own Part 36 offer at trial. The First Defendant submitted that the “additional amount” due under CPR 36.14(3)(d) would also be impacted by the £500,000 cap. The Court rejected this, ruling that it exists as an “incentive” for settlement, and so Claimants should not be penalised for doing so, as it would be unjust. As a result, it held it could not on this either pending the overall outcome.
08.10.2014Evans v Royal Wolverhampton Hospitals NHS Foundation Trust  EWHC 3185 (QB)
Key areas: Part 36 offer; withdrawn offer; High Court
This was a hearing to determine whether or not a Defendant had validly withdrawn a Part 36 offer before it was accepted.
On 3rd July 2014 the Defendant made a Part 36 offer for £325,000. On 23rd July 2014 at 11:25 the Defendant served a fax withdrawing the offer. Just over an hour later the Claimant served a fax accepting the offer. Both the acceptance and withdrawal were within the 21-day acceptance period, but under CPR 36.3(5) a Part 36 offer can only be withdrawn before it expires if the Court gives permission.
On 24th July 2014, the Defendant issued an application to withdraw its offer, without advising the Claimant.
On 28th July 2014 the Claimant sought permission that the offer would be paid within 14 days. The Defendant would not confirm this, and the Claimant issued an application for a declaration that it was validly accepted.
The Defendant’s application was granted, without the Claimant being aware of the hearing or the grounds on which the Defendant relied.
On 14th August 2014 the Claimant issued an application to set-aside the Defendant’s Order. At this hearing, the Defendant did not disclose the grounds on which it relied to either the Court or Claimant. However, when faced with caselaw relating to open justice, it asked for an adjournment, but this was rejected.
The Court held that it was “wrong in principle” for the Claimant not to be given notice of the Defendant’s application, and that it was a “denial of justice”.
The Court then turned to the Defendant’s reasons for withdrawing, and as none were provided, held that the Claimant’s acceptance was valid.
03.10.2014Northrop Grumman Mission Systems Europe Ltd. v BAE Systems (Al Diriyah C4I) Ltd. (No 2)  EWHC 3148 (TCC)
Key areas: mediation; unreasonable conduct; parties’ offers; High Court
This was a hearing to determine costs arising from a set of Part 8 proceedings, that the Court resolved in the Defendant’s favour.
The Claimant accepted that it was liable for the Defendant’s costs, but that they should be reduced by 50% due to its refusal of mediation. The Defendant’s position was that it was entitled to all of its costs.
The Claimant submitted that even though the case was a construction dispute, there was no reason why a skilled mediator would not be able to consider the parties’ positions; that it was not an “all or nothing” dispute; that the Defendant did not give any reasons for its refusal to mediate.
The Defendant submitted that it simply sought information about the Claimant’s case, instead of refusing to mediate; that it made a “drop hands” offer; that the costs would not be much less that the eventual trial; and that it was confident in its case after having the contract reviewed by internal and external lawyers.
The Court held that the dispute could have involved a skilled mediator, but that the Defendant reasonably believed it had a strong case; that the Defendant’s offer was better than the Claimant’s outcome; that the costs of mediating would have reduced costs overall; and that there were “reasonable prospects” of mediation being successful.
Overall, the Court held that it was unreasonable for the Defendant to refuse to mediate, but that its “drop hands” offer was relevant in relation to costs.
As a result, the Court awarded the Defendant all of its costs on the Standard Basis.
02.10.2014Coward v Phaestos Ltd.; Mindimaxnox LLP; IKOS CIF Ltd.; IKOS Asset Managment Ltd.  EWCA Civ 1256
Key areas: parties’ offers; rejection of offers; without prejudice offer; Court of Appeal
This was an appeal against an order for costs arising from a software copyright dispute.
At first instance the claim was dismissed, and the Defendants were mostly successful in their counter-claim. The Defendants were therefore awarded 85% of their costs, with the reduction to reflect the loss of the counter-claim.
The Claimant submitted that his Calderbank/ without prejudice offer of 30th July 2012 was “substantially” what the Defendants achieved, and that it contained an undertaking as opposed to the Defendants award of an injunction. The offer also contained a financial settlement of £50,000, which was much greater that the Defendants’ award of £1000; and an offer to deliver-up the offending material. The Defendants sought clarification, but the Claimant stated that the offer was clear and capable of being accepted.
On appeal, the Claimant submitted that the Judge did not consider the overall outcome, and that her ruling was erroneous.
The Court held that the undertaking had no real difference from the injunction; that the counter-claim sought a specific injunction on the terms on which one was awarded; that the undertaking would have only partially resolved the issue; and that the undertaking only related the copies of the items in the Claimant’s possession at that time, not other copies that he may come across in the future, which the injunction also covered.
As for the financial aspect of the offer, the Claimant submitted that acceptance would entitle the Defendants to all of its costs to that date, as opposed to the award of 85%. The Court held that the Judge would have taken this into account.
As a result, the Court held that the Defendants had achieved much more than what was offered, and the original order was upheld.
The Claimant also submitted that his Calderbank/ without prejudice offer should have the effect of CPR 36 under CPR 44. The Court rejected this, saying that CPR 36 was “self-contained” and the offer did not comply with its requirements, and so CPR 36 does not apply to Calderbank/without prejudice offers.
02.10.2014Gorgeous Beauty Ltd. v Liu; Liu; Register of Companies; Gold Wealth LLP (Costs)  EWHC 3093 (Ch)
Key areas: Basis of assessment; party’s conduct; High Court
The main action was a dispute over land in Taiwan. The Claimant successfully obtained a declaration that a Declaration of Trust was invalid and that the Register of Companies be rectified in its favour.
The Claimant submitted that it should be entitled to all of its costs. It also submitted that its costs should be assessed on the Indemnity Basis due to the First and Second Defendants’ conduct, and findings of fraud and dishonesty against them.
The First and Second Defendants submitted that because they won on some issues, they should only have to pay 85% of the Claimant’s costs, which should be assessed on the Standard Basis.
The Court noted that the Claimant’s expert costs were less than what was expected, and their overall success justified an award of 90% of their costs.
As for the basis of assessment, the Court considered that the finding of “fraud” was only on the balance of probabilities; and that their conduct only led to a minimal amount of extra costs being incurred.
As a result, the Claimant’s costs were awarded on the Standard Basis.
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