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Beware of leaving costs in settled cases to the court to decide

24 July 2014

The recent case of RG Spiller Ltd v Derhalli highlights the dangers of leaving the issue of costs to the court when the substantive issues have been resolved.

The claimant had previously sought and obtained a limited injunction against the defendant. The parties eventually settled and the consent order included a provision giving the parties liberty to apply if they were unable to agree costs. No agreement was reached and so the claimant applied for its costs asserting that, because it was the successful party, the usual costs order under CPR 44.2(2) should apply.

The judge commented that if parties settle all issues except costs, they take the risk that the court will not be prepared to make any determination other than no order as to costs. The judge considered that an injunction had been applied for prematurely as some notice should have been given. The court could take into account the behaviour of the parties and the appropriate order was therefore no order for costs.

So parties beware! Costs do not necessarily follow the event as the claimant failed to obtain its costs of the action and was also ordered to pay the costs of the costs application.

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