Danger of Making Order for Costs after Settlement without Judgment ; WEDNE SDAY LAW REPORT 3 MAY 2006 Promar International Ltd V Clarke ([2006] EWCA Civ 332) Court of Appeal, Civil Division (Lady Justice Halett and Mr Justice Bennett) 4 April 2006

Article excerpt

Trial judges should be aware of the dangers of being persuaded to decide issues of costs when all issues apart from costs had been settled, orresolved without its being necessary to give a judgment.

The Court of Appeal dismissed the appeal of Promar International Ltd against a decision to make no order for costs after it had abandoned its claim for damages against Philip Clarke following his undertaking to the court in lieu of an injunction.

Promar International Ltd, which provided consultancy services to farms and rural businesses, employed Philip Clarke as a senior consultant under a contract which contained a restrictive covenant preventing him, for a period of six months after the end of the contract, from dealing with anyone who, at the date of termination or in a period of 12 months before termination, was a client of Promar or had been in the habit of dealing with Promar and with whom Mr Clarke had had personal contact or had dealt.

Mr Clarke terminated his contract with Promar and entered into a contract of employment with another company. Promar commenced proceedings against Mr Clarke, alleging that he had breached the restrictive covenant, and claiming an injunction, damages and costs.

In the course of Promar's counsel's opening at the trial, Mr Clarke made an unconditional offer to give an undertakingto the court in lieu of an injunction. Promar thereafter abandoned its claim for damages, leavingonly the issueof costs unresolved. The parties were unable to resolve the issue of costs and asked the judge to determine the issue He ordered Mr Clarke to pay 75 per cent of Promar's costs.

After the judge had given his decision, counsel for Mr Clarke discovered from further research the decision of the Court of Appeal in BCT Software Solutions Ltd v C Bmver & Sons Ltd[2003]EWCA Civ 939. …