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Codent Limited v Lyson Limited, Court of Appeal, 8 December 2005

6 January 2006
The issues

Costs – Part 36 Offer – Crouch v Kings Healthcare – Trustees of Stokes Pension Fund v Western Power Distribution

The facts

The Defendant was sued for breach of contract. He issued a counter claim. It made a written offer to pay £100,000.00 in full and final settlement and to waive its counter claim and to pay the costs of the action. The offer was refused. The Claimant was successful but failed to beat the offer at Trial. The Claimant argued that the offer was ineffective as it could have been supported by a Payment into Court. The Judge agreed. The Defendant appealed.

The decision

The Judge had relied on Crouch v Kings Healthcare and did not have the benefit of the decision in Trustees of Stokes Pension Fund. He had decided the issue on the basis that the offer either was effective or had no effect at all. He did not consider the issue raised in Stokes as to whether some position in the middle was possible. As a result his decision was wrong in principle. The costs order was clearly unjust to the Defendant. However, the Court would take account of the fact that the offer had not been made more than 21 days before Trial and had not been left open for 21 days. In the circumstances the right order was that the Claimant should have 70% of its costs of the action up to the first day of Trial and the Defendant its costs thereafter.

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