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Dyson Limited v Hoover Limited, Chancery Division

30 October 2002
The issues

Costs – Part 36 Offer – Claimant accepting Part 36 Payment more advantageous than previous Part 36 Offer made by Claimant – indemnity costs.

The facts

The Claimant had made a Part 36 Offer in this infringement of patent case, which was worth about £1.5 million. The Defendant had subsequently made a Part 36 Payment of £4.0 million which was accepted. The Claimant argued that pursuant to Civil Procedure Rules 36.21 it was entitled to its costs on an indemnity basis until the date of its acceptance of the Part 36 Payment.

The decision

1. Where a Claimant accepted a Part 36 Payment, the Court had no discretion as to the basis of costs. See Part 36.13 (4). Even if the Court had a discretion, which it did not, it was not a discretion which could ever be properly exercised, since it was impossible to determine the reasonableness of the rejection by the Defendant of the initial Part 36 Offer without going behind the parties’ settlement.

Comments

This might prove rather a useful case in those difficult circumstances where indemnity costs loom!

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