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Islam v Ali, Court of Appeal, 26 March 2003

31 March 2003
The issues

Costs – offer – offer to settle.

The facts

The claim related to an action for recovery of fees by a Chartered Accountant. He claimed that he had an agreement that in due course he would purchase the business and in the meanwhile that he would run the business and collect the profits. He claimed £156,000.00 or £80,000.00, taking into account amounts he had already received. The other party offered in negotiations £45,000.00. When it went to Trial, he received under £13,000.00 and was awarded costs. The Defendant appealed on the basis that there was such a disparity between the claim and what had been awarded, that it was not fair to say that the Claimant had “won”.

The decision

1. The general rule was that the successful party received costs from the unsuccessful party.

2. The Trial Judge always had a discretion.

3. In exercising discretion, he had to have regard to all the circumstances, including conduct, success on part or all of the case, payments into court and offers to settle.

4. The Judge had found for the Claimant on significant issues as a result of which the award was of relative insignificance in comparison to the claim.

5. The Judge failed to have due regard for the fact that the Defendant had won in principle. The Judge’s Order would be set aside and substituted with no Order as to costs.

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