Late last year Judge Hacon handed down a judgment which looked at the interplay between Part 36 offers and the rules on costs at the Intellectual Property Enterprise Court (IPEC), with the former trumping the latter.

The dispute involved a claim by Phonographic Performance Limited (PPL) against a Mr Hagan (Mr H) for copyright infringement of sound recording, by the playing of those recordings in public at two bars in London without a licence from the claimant.

Judgment in default was given against Mr H after his defence was struck out. He then tried (and failed) to claim that he had previously accepted the claimant’s Part 36 offer, providing evidence which the court described as having been ‘fabricated in a clumsy manner’. Mr H was ordered to pay additional damages, interest on those damages and interest on costs, an order which he tried (and also failed) to appeal.

The interesting part of the decision was the tension between the cost caps and the amount to be award to the claimant. After some discussion, the Court found that the caps at IPEC do not apply to an award of costs under Part 36 and made an award of costs in excess of the cap. Even though this case was considered under the older part 36 provision, there is nothing to suggest that the same outcome would not have been reached under the newer, revised rule.

This decision serves as a useful reminder to always think carefully about offering or accepting/refusing Part 36 offers, as the consequences of failing to accept can be serious.