Coward v Phaestos Ltd & Ors [2014] EWCA Civ 1256

James Abrahams acted for the defendants, the IKOS group of companies, in this appeal relating to costs in computer copyright litigation. The total costs were of the order of £20 million.
The central issue was a ‘Calderbank’ offer to settle, made at an earlier stage by the claimant, Mr Coward. At first instance, Mrs Justice Asplin held that IKOS had obtained more relief than had been offered, and that Mr Coward should therefore be liable for IKOS’s costs (subject to a 15% reduction).
The Court of Appeal agreed, finding that there were three relevant material improvements on the offer achieved at trial and the Judge had therefore exercised her discretion as to costs appropriately. The 15% reduction was held to be an appropriate reflection for dropping part of the Counterclaim. The appeal was dismissed.
It was said (obiter) that the rigid approach of rule 36.14(1A) only applied to offers within Part 36 CPR, and that the more flexible approach of Part 44 CPR applied to other sorts of offers to settle.
James Abrahams was instructed by Herbert Smith.