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Victor Kermit Kiam II v MGM Limited, Court of Appeal, 12 February 2002

12 February 2002
The issues

Costs – Without Prejudice – costs consequences.

The facts

The party in whose favour an Order for costs had been made on Appeal sought the costs of that Appeal on an indemnity basis. The successful Respondent to the Appeal had won £105,000.00 in a libel action. They offered to accept without prejudice £75,000.00 when the Appellants appealed. That offer was ignored. The Respondents sought costs on an indemnity basis under Part 44.

The decision

1. In Reid Minty -v- Taylor, the Court of Appeal decided that conduct (falling short of miss-conduct) could be so unreasonable as to justify an Order against the guilty party on the indemnity basis. There is a distinction between an Indemnity Costs Order made under Part 36 and one made under Part 44. The latter was penal in nature.

2. To refuse a settlement offer would very rarely attract an Order for costs on an indemnity basis under Part 44.

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