"Now we are Six" - The Small Claims Track's Sixth Anniversary

Interior of the Royal Courts of Justice

Author Aurelien Guichard
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Jane Lambert

Just over 6 years ago the Patents County Court Small Claims Track was launched (see my article Soon there will be a Remedy if Someone steals your Idea  19 Sept 2012 NIPC Inventors Club). I was very enthusiastic about the new court and wrote a lot about it as you can see from the bibliography in Small IP Claims 31 Jan 2017 NIPC News). 

The reason for my enthusiasm was that it seemed to make IP litigation affordable for thousands of start-ups and other small businesses that felt that the law provided no effective protection for their investments in branding, design, technology and creativity because enforcement of their rights was too expensive and too uncertain.  Before the Civil Procedure Rules came into force in 1999 claims often began with an application for interim injunctive relief.  Most settled when an interim injunction was either granted or refused (if not before) . If the unsuccessful party paid anything at all to the successful party by way of damages or costs the amount rarely exceeded a few thousand pounds.  As such sums fell well within the Small Claims Track's jurisdiction and as Part 27 of the Civil Procedure Rules provided a much simpler procedure and far less risk than the Multitrack, I expected a surge of litigation in the new court.

That has not happened and I think there are several reasons for that.  One reason is that trials (known as "hearings") are limited to a day.  There is nothing in Parts 27 or 63 , their respective practice directions or the Guide to the Intellectual Property Small Claims Track that limits hearings to a day, but if a case raises issues of any complexity the court will be inclined to transfer it of its own initiative even if the parties want it to say in the Small Claims Track.

That restricts the sort of cases that can be heard on the Small Claims Track.  According to Sheona Burrow, the vast majority of claims brought before the court were copyright cases followed by trade marks, passing off and unregistered design rights (see Burrow Research Blog Series: Assessing the IP Small Claims Track 23 Feb 2018 CREATe).  Presenting the conclusions of a project to assess the IP Small Claims track, she observed:
"The key findings of the project were that the court appeared popular for copyright claims, particularly concerning online infringement of artistic works. Photographers were a large user group, bringing over 40% of claims during the sampled period. While some other businesses in the creative industries were litigants, the court was also used by non-creative business, particularly those in retail and manufacturing. The majority of court users were micro businesses or SMEs. There was also a ‘gender gap’, with the majority of court users being male. The majority of claims were under half of the permitted small claims limit, which increased to £10,000 in April 2013, the mean value being just around £3,800."
In a speech to Melbouorne Law School, Sir Colin Birss confirmed that photographers were the main users of the Small Claims Track (see The University of Melbourne To boldly reform IP dispute resolution: Experience in the Intellectual Property Enterprise Court YouTube).

Another reason is that the substantive law in the Small Claims Track is the same as in any other court. Although the procedure is simplified, many of the provisions of Part 63 apply.  It is possible for an intelligent individual to represent him or herself in the Small Claims Track (as it is in any other court or tribunal) but it is not easy. More than a few litigants in person have been driven to seek professional advice and representation when they encounter difficulty.

Yet another reason is that cases on patents, registered and unregistered Community designs, plant varieties and semiconductor topographies are automatically excluded from the Small Claims Track no matter how simple the point or modest the claim.  Patent disputes often turn on points of construction and the question whether a design has been infringed is a matter of impression.

That is not to say that the Small Claims Track has been unsuccessful.  According to Christian Helmers and others, the Small Claims Track is seen as a "useful option" by corporate litigants,  "particularly for individuals and small enterprises that previously may not have attempted to litigate" (see page 12 of Helmers and others Evaluation of the Reforms of the Intellectual Property Enterprise Court 2010-2013 22 June 2015).

I have now gained a fair degree of experience of the Small Claims Track including a trial, several preliminary hearings from which I have drawn the following conclusions:

• The case must be one that can be tried comfortably in a day.   If there is a counterclaim, more than a few witnesses, complex facts or point of law the action will be transferred elsewhere.
• Statements of case, witness statements, experts reports and other documents used in the litigation should be as short and simple as possible.
• Nevertheless, particulars of claim must state whether the claimant has complied with paragraph 6 of the Practice Direction - Pre-Action Conduct and that claimant wishes the case to be allocated to the Small Claims Track.
• Even though the Small Claims Track has been designed for litigants in person, it probably pays to instruct a lawyer to draft a letter before claim and statements of case notwithstanding that you will recover no more than a fraction of your costs at the end of the litigation. 
• All the provisions of Parts 27 and 63, their practice directions and the Guide must be complied with.

Anyone wishing to discuss this article, or small claims litigation generally should call me on 020 7404 5252 during regular office hours or send me a message through my contact form.