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Coward v Phaestos Ltd & Ors [2014] EWCA Civ 1256 - 02/10/14


The Claimant sought to resist a costs order against him at the conclusion of an intellectual property dispute before Asplin J in the Chancery Division of the High Court. Though he had substantially been the unsuccessful party, it was argued on his behalf that the Defendants were offered all that they substantially achieved at trial by an earlier Calderbank offer, a without prejudice offer save as to costs (Calderbank v Calderbank [1976] Fam 93). By reason of their failure to accept that offer, it was submitted that an order should be made under CPR Part 44 providing for the Defendants to pay the Claimant's costs incurred since the date of the offer. The Claimant was unsuccessful in arguing this point before Asplin J at first instance. An appeal was brought against her decision on costs to the Court of Appeal.

The key legal point arising before the Court of Appeal was whether the effect of a Calderbank offer should be assessed by analogy with the terms of CPR 36.14(1A). CPR 36.14(1A) defines the meaning of "more advantageous" for the purposes of CPR 36.1 where a claimant fails to obtain a judgment more advantageous than a defendant's Part 36 offer, or judgment against a defendant is at least as advantageous as the proposals contained in a claimant's Part 36 offer. It provides that "in relation to any money claim or money element of a claim, "more advantageous" means "better in money terms by any amount, however small, and "at least as advantageous" shall be construed accordingly".

The majority decision of the Court of Appeal was given by Richards J with whom Moore-Bick and Ryder LJJ agreed. In arriving at his decision, he highlighted the provisions of CPR 36 as comprising a self-contained code. He proceeded to hold at paragraphs 101 and 102: "I accept the broad terms in which the discretion conferred by Part 44 is expressed comes at a price of some uncertainty and some scope for argument as to costs. It is in the nature of a discretionary remedy dependent on the particular circumstances of the case that there is more uncertainty than exists where there is a rigid rule. But courts are well accustomed to dealing with those cases where it is arguable that the just result is not simply that the unsuccessful party pays the costs of the successful party in full. In any event, a strict approach to offers would reduce uncertainty only as regards one of the many factors which may be relevant to the exercise of the discretion.....For these reasons, I am satisfied that it would be contrary to the express terms of Part 44 to read across into it a rigid approach drawn by analogy from CPR 36.14(1A)".

The Court of Appeal therefore clarified that the effect of a Calderbank offer in the Court's assessment of costs under CPR 44.2 should not be construed in accordance with CPR Part 36.14(1A). The Claimant's appeal was in any case dismissed.