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Hooper v Biddle Company, Chancery Division, 11 October 2006

17 October 2006
The issues

Costs – exaggerated claim – cost consequences.

The facts

The Applicants looked for an Order that the Respondent firm pay their costs following an action in which they had sought damages from that firm. They had initially stated that the claim was £3.75 million. Draft Particulars of Claim were served, in which that figure appeared. When the Particulars of Claim were finally served the claim had diminished to £350,000.00. A joint expert put the loss at £38,000.00. A Part 36 offer was made in that sum by the Respondent, which was rejected. The Respondent then made an offer of £38,000.00 without prejudice and with no Order for costs attached. That was also rejected. The next offer was an open offer of £38,000.00 with no interest but with a provision for the Court to determine costs. That offer was accepted. The Applicant argued that they had “won” the litigation and should get back all their costs. The Respondent argued that the claim had been grossly inflated and that the Applicant should not receive all or any of their costs.

The decision

The Court could consider a party’s conduct when assessing costs (see CPR Rule 44.3(2)(b)). It could not be concluded that the Applicant had won because they had not recovered a way of settlement what they might have recovered had the case gone to Trial. They had accepted an offer representing only 10% of the pleaded claim. The Applicant had taken a costs risk when deciding to accept a settlement that did not include costs as an automatic provision. The claim had been exaggerated throughout. Relying on Painting v University of Oxford the Claimant’s Application for costs would be refused and no Order would be made.

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