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You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> Rotam Agrochemical Company Ltd & Anor v GAT Microencapsulation GmbH [2018] EWHC 3006 (Comm) (08 November 2018) URL: http://www.bailii.org/ew/cases/EWHC/Comm/2018/3006.html Cite as: [2018] EWHC 3006 (Comm), [2018] 6 Costs LR 1365 |
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QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Strand, London, WC2A 2LL |
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B e f o r e :
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(1) ROTAM AGROCHEMICAL COMPANY LIMITED (2) ROTAM AGROCHEM INTERNATIONAL COMPANY LIMITED |
Claimants |
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- and - |
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GAT MICROENCAPSULATION GMBH (FORMERLY GAT MICROENCAPSULATION AG) |
Defendant |
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Hugo Cuddigan QC and Chris Aikens (instructed by Waterfront Solicitors LLP) for the Defendant
Hearing date: 31 October 2018
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Crown Copyright ©
Mr Justice Butcher:
Introduction
The parties' positions
CPR 44.2
44.2 (1) The court has discretion as to-(a) whether costs are payable by one party to another;(b) the amount of those costs; and(c) when they are to be paid.(2) If the court decides to make an order about costs-
(a) the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party; but(b) the court may make a different order.
(4) In deciding what order (if any) to make about costs, the court will have regard to all the circumstances, including
(a) the conduct of all the parties;(b) whether a party has succeeded on part of its case, even if that party has not been wholly successful; and(c) any admissible offer to settle made by a party which is drawn to the court's attention, and which is not an offer to which costs consequences under Part 36 apply.(5) The conduct of the parties includes-
(a) conduct before, as well as during, the proceedings(b) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;(c) the manner in which a party has pursued or defended its case or a particular allegation or issue; and(d) whether a claimant who has succeeded in the claim, in whole or in part, exaggerated its claim.(6) The orders which the court may make under this rule include an order that a party must pay-
(a) a proportion of another party's costs;(b) a stated amount in respect of another party's costs;(c) costs from or until a certain date only;(d) costs incurred before proceedings have begun;(e) costs relating to particular steps taken in the proceedings;(f) costs relating only to a distinct part of the proceedings; and(g) interest on costs from or until a certain date, including a date before judgment.(7) Before the court considers making an order under paragraph 6(f), it will consider whether it is practicable to make an order under paragraph 6(a) or (c) instead.
Authorities referred to by the parties
"Has the plaintiff won anything of value which he could not have won without fighting the action through to the finish? Has the defendant substantially denied the plaintiff the prize which the plaintiff fought the action to win?"
"In this line of cases, where the plaintiff only recovers between 1% and 3% of his original claim (sometimes, but not always, after a late amendment) the court is entitled to ask itself: 'Who was essentially the winning party?' It will not be distracted from making a just order as to costs by the absence of a payment into court which the plaintiff would obviously not have accepted or where the defendants did not have a proper opportunity to make a payment into court which obviously would not have been accepted Although all these cases are different, in the present case the substantive lis between the parties on the trial of the preliminary issues related to the big claim on which the plaintiff wholly failed."
"[46] A not uncommon scenario is that both parties turn out to have been over-optimistic in their Part 36 offers. The claimant recovers more than the defendant has previously offered to pay, but less than the claimant has previously offered to accept. In such a case the claimant should normally be regarded as 'the successful party' within rule 44.3(2). The claimant has been forced to bring proceedings in order to recover the sum awarded. He has done so and his claim has been vindicated to that extent.
[62] There has been a growing and unwelcome tendency by first instance courts and, dare I say it, this court as well to depart from the starting point set out in rule 44.3(2)(a) too far and too often. Such an approach may strive for perfect justice in the individual case, but at huge additional cost to the parties and at huge costs to other litigants because of the uncertainty which such an approach generates.
[63] In the context of personal injury litigation where the claimant has a strong case on liability but quantum is inflated, the defendant's remedy is to make a modest Part 36 offer. If the defendant fails to make a sufficient Part 36 offer at the first opportunity, it cannot expect to secure costs protection. "
"For our part we prefer the AL Barnes, Day and Fox approach. At a time when the court has no desire or resource for further rounds of the 'costs wars' it has the virtue of clarity and simplicity. Concerns over conduct, partial success etc can be addressed in any event when looking at whether there are reasons to depart from this starting point "
Discussion and Decision
(1) Its denial of any entitlement on the part of Rotam even to recover the amount which it had received added to the rancour which was evident in this dispute. GAT supported that denial by its case on the Letters of Access agreement, which I rejected, but which involved an investigation of a range of documents and was explored at some length with the witnesses.
(2) The issue of Austrian law led to both parties incurring significant costs. Rotam's best estimate was that the proportion of their costs attributable to this issue was some 15%. If I had made an issues-based costs order, Rotam would have been entitled to an order for those costs, and, as it is, I will take them into account in making an order under 44.2(6)(a).
(3) The argument based on the Confidentiality Agreement was put at the forefront of GAT's submissions and took time to deal with in argument.