Great result definitely, well done for sticking to what you knew was right Phil
Just to clarify the difference between UK and US law -
Claims for penal damages are not accepted by UK courts under the common law. Liquidated damages for the breach of contract are fine (and in this case the amount of damages was clear as £700 unless the OP had suffered other losses as a direct result of the breach) but courts will not award other damages to punish the respondent.
The only additional amount a claimant could receive would be an award of costs. In this case where the respondent had offered to pay the full liquidated damages before any hearing then it would be extremely unlikely that a judge would consider the additional costs of the action as reasonable.
Tempting as it may be to launch a claim in a fit of pique it's always advisable to try and reach an agreement with the other party before going to court. There is precedence for all costs to be awarded against one side (regardless of how the claim is decided) where the judge has felt that they haven't made an effort to settle the dispute before trial.