29.06.2012Ted Baker Plc; No Ordinary Designer Label Ltd. v AXA Insurance UK Plc; Fusion Insurance Services Ltd.; Tokio Marine Europe Insurance Ltd.  EWHC 1779 (Comm)
Key areas: split trial; preliminary issues; Part 36 offer; High Court
This was a hearing to determine costs arising from the Claimants’ win on a number of preliminary issues.
The Defendants submitted that costs should be reserved until the final determination of the case. The Court rejected this saying that there were 3 distinct issues, and that it was always open for the Defendant to concede any one issue. It also held that the Claimants are entitled to those costs in principle, even if they ultimately lose the case.
However, the Defendants then submitted that costs could only be determined at the end of the case, given the possibility of Part 36 offers. The Court noted that there was a “real problem” with how Part 36 applies in this situation. As a result, the Court agreed that it could not make an Order for costs.
Overall, the Court held that the costs of the preliminary issue were reserved until the end of the case.
22.06.2012F & C Alternative Investments (Holdings) Ltd. & Ors v Barthelemy & Anor  EWCA Civ 843
Key areas: Basis of assessment; both parties win some issues; interest on costs; Court of Appeal
This was an appeal against an order for indemnity costs in a main action.
At first instance the Claimants/Appellants were ordered to pay 70% of the Defendants’ costs, with the Indemnity Basis to apply from 16th January 2010, including 40% interest up to 21st December 2010 and 22% interest thereafter. Costs on the Standard Basis were awarded interest at 3%.
The Respondents cross-appealed that they were only allowed 70% of their costs and 3% interest.
On 24th December 2009 the Defendants made a non-Part 36 offer to settle for £5.87 million plus costs, and was stated as being open until 15th January 2010. The offer was not accepted and was withdrawn on 21st May 2010 and replaced with an offer for £7.83 million plus costs. Four days later the Claimant offered to settle for £2.5 million, including costs.
At trial costs were awarded on the Indemnity Basis because the Defendant beat their own offer and the letter “mimicked” the wording of Part 36. He awarded 3% interest because that was the sum usually allowed for small businesses.
On the reduction of costs the Respondent accepted that 15% of the costs related to an issue on which they failed, but that should the amount that they should be reduced by, not 30%. However, the Court held that the judge had been correct to limit them to 70% on the facts.
The Court held that the Judge could not award Indemnity Basis costs by analogy, especially given that the offer itself stated that it was not a Part 36 offer, and so Standard Basis costs should apply.
The Court upheld the award of 3% interest on the Standard Basis costs.
15.06.2012Te Hsing Maritime SA v CertAsig SA & Anor  EWHC B16 (Comm)
Key areas: Security for costs; High Court
The Defendants made an application for security for costs against two Claimants who are based in Taiwan.
The First Claimant had been dissolved, but both Claimants were covered by an ATE policy. In addition, the Second Claimant had substantial assets, and had accepted that it would be bound by any final ruling.
The Court noted that although there is no agreement between the UK and Taiwan to recognise each other’s court rulings, Courts in both countries had previously enforced the other’s decisions.
In addition, it was held that the costs of enforcing in Taiwan would be recoverable in addition to the main costs of the action themselves, and would be unlikely to exceed £20,000.00.
As a result, the High Court refused the Defendants’ application.
15.06.2012Braganza v BP Shipping Ltd.; BP Maritime Services (Singapore) Pte Ltd.  EWHC 1612 (Admlty)
Key areas: both parties win some issues; High Court
This was a ruling on costs resulting from the main action.
The Claimant won a contractual claim for US$230,256 + 5.25% interest, but lost a tort claim under the Fatal Accidents Act 1976 for US$1,325,945.
As a result she submitted that she was entitled to 80% of her total costs. The Defendants accepted that they were liable for the Claimant’s costs in the contract claim until 25th March 2011, but that they should be entitled to all of their costs in the tort claim and all of their costs in the contractual claim from 25th March 2011.
The Claimant’s Solicitors acted in a CFA with a 100% success fee and served a costs estimate for £2,639,399, while the Defendants’ costs were estimated at £420,000.
The Defendants made 6 non-Part 36 settlement offers, 5 of which had to be taken into account because they were better than the Claimant’s damages.
On 25th March 2011 the Defendants offered US$230,256 plus costs & any success fee up to 25%. This was rejected. It was withdrawn on 8th July 2011.
On 23rd September 2011, the Defendants offered US$230,256 + interest with the parties to bear their own costs.
On 17th February 2012, the Defendants offered US$232,000 plus costs.
On 6th March 2012, the Defendants made 2 offers which were alternatives to each other: of US$232,000 for the contract claim plus costs, with the tort claim to be discontinued; the other of US$232,000 for both claims and £340,000 for costs.
On 9th March 2012, the Claimant made a Part 36 offer for US$750,000.
The total sum awarded for the contractual claim exceeds the Defendants’ offers.
The Court noted that the Defendants had attempted to settle the claim, while the Claimant had not; and the tort claim increased the trial from 3 to 8 days, which it stated “added significantly to the costs”.
The Claimant submitted that the Defendants were to blame for extra costs due to issues with disclosure; the Court rejected this, and noted that the Claimant relied on unsustainable and abandoned arguments.
The Court held that, given the work done in both parts of the claim, the Defendants should pay 45% of the Claimant’s costs.
12.06.2012Hemming (t/a Simply Pleasure Ltd.); James Alan Poulton (t/a Soho Original Book); Harmony Ltd.; Gatisle Ltd (t/a Janus); Winart Publications Ltd.; Darker Enterprises Ltd.; Swish Publications Ltd. v Westminster City Council  EWHC 1582 (Admin)
Key areas: Part 36; basis of acceptance; Indemnity Basis; High Court
This was a ruling over costs resulting from a successful claim over licensing regulations.
The Claimants made a Part 36 offer which expired before they issued proceedings, which the Council rejected.
At trial it was held that the Claimants had achieved a result which “at least as advantageous” as their offer.
The Defendant submitted that costs should only be awarded on the Standard Basis because to accept the offer would mean that they would not be able to inspect any sex shops in Soho; which was “too important a principle” for them to concede. The Court rejected this stating that any acceptance would only show that the Council is willing to resolve disputes.
As a result, Indemnity Basis costs were awarded from the date that the offer expired, at the rate of 10% above base rate.
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