Costs - Lutec (UK) Ltd v Cascade Holdings Ltd


 




Jane Lambert

Intellectual Property Enterprise Court  (Mr David Stone) Lutec (UK) Ltd and others v Cascade Holdings Ltd and another (Costs) [2021] EWHC 2259 (IPEC) (13 Aug 2021)

In Lutec (UK) Ltd and others v Cascade Holdings Ltd and another [2021] EWHC 1936 (IPEC) (09 July 2021), Mr David Stone found that the defendants had infringed the third claimant's registered designs. I discussed the case in Registered Designs - Lutec (UK) Ltd v Cascade Holdings Ltd on 2 Aug 2021.  The learned deputy judge awarded the third claimant its costs, to be assessed if not agreed. The parties were unable to agree on those costs so they asked Mr Stone to assess them.

Costs in Ithe Patents County Court

In New Patents County Court Rules (31 Oct 2021 NIPC Law), I discussed changes to Part 45 of the Civil Procedure Rules and the Part 45 Practice Direction which limited the costs that could be recovered in the Patents County Court.  Essentially, those costs were limited to a scale set out in Table A and Table B  of the Part 45 Practice Direction. The overall costs were limited by CPR Part 45.31 (1)  to £50,000 for a trial on liability and £25,000 for an account of profits or inquiry as to damages.

Westwood v Knight

His Honour Judge Birss QC (as he then was) considered those costs caps in Westwood v Knight [2011] EWPCC 11, [2011] 4 Costs LR 654, [2011] FSR 37:

"Approach to the assessment of costs in the Patents County Court

[21] The first question will always be the one contemplated by CPR Pt 44.3 (1) (a) – whether costs are payable by one party to another. The usual rules applicable under the CPR apply to that. The general rule is that the unsuccessful party will be ordered to pay the costs of the successful party but the court may make a different order. In some cases an issue based approach and set off may be appropriate just as in the High Court.
[22] The next matter to address is then the amount of costs, which will be arrived at using the summary assessment procedure. In order to conduct the assessment the party seeking costs will need to provide information about its costs broken down by stages corresponding to the stages in Table A (for a liability trial). In the present case the claimant's solicitors prepared Statements of Costs for each stage and a summary schedule setting out the totals for all the stages. The detail in each Statement needs to be set out somewhere and it is an important formality that the solicitor signs each Statement to confirm its accuracy. I wonder if it might be possible to prepare a single Statement of Costs setting out each stage without doing too much violence to the form but that is a minor matter.
[23]The summary schedule was a useful document and I commend the idea to other litigants in future.
[24] The approach to costs assessment in the Patents County Court, being a hybrid of the normal summary assessment procedure and the stage limits, involves considering each stage separately. In my judgment the correct approach is as follows. For each stage the party's costs at that stage should be subject to summary assessment. That will produce schedule of figures for each stage. In the PCC the amount of the costs awarded by the court will depend on the nature and complexity of the claim (r 45.42 (4)). The point in the analysis at which this provision can be best applied is this stage. The sum which might emerge from a summary assessment at this stage in the PCC may well be lower than the sum which might emerge from the same process conducted in proceedings before the High Court. In a simple claim with modest sums at stake the sum is very likely to be lower. Section 5 of the Final Report of the IPCUC's Working Group specifically makes the point that in some cases, such as simpler trade mark disputes, there is no reason why the costs spent or awarded should necessarily be as high as the particular stage limits.
[25] Provided the summary assessment has been approached on the right basis (i.e. as a PCC summary assessment) then in my judgment if the assessed figure for a given stage is less than the limit for that stage then nothing further need be done, and if the summarily assessed sum is more than the limit for a given stage, then the limit is very likely to be the right figure.
[25] Finally the overall limit should be considered. The maximum recoverable is £50,000. If the total is lower then nothing more is required. If the total approached in this way turns out to exceed £50,000 then, provided the summary assessment was approached on the right basis in the first place, then the limit is very likely to be the right figure."

Launch of IPEC

On 1 Oct 2013, the Patents County Court was abolished and a new Intellectual Property Enterprise Court ("IPEC") was established.  The rules that used to apply to the Patents County Court including Part 45 and the Part 45 Practice Direction were applied to IPEC.  I discussed the legislation that abolished the Patents Court and established IPEC in What does the Intellectual Property Enterprise Court mean for Litigants in the North West? on 13 Oct 2013 in IP Northwest.

The Claim

The third claimant claimed the following amounts:

Stage of Claim

Total (actual)

Stage Cap

First Interim application

£1,833.50

£3,000.00

Second Interim application

£6,885.00

£3,000.00

Preparing for and attending trial and judgment

£14,080.00

£16,000.00

TOTAL

£22,798.50

£28,000.00

TOTAL CLAIMED

£18,913.50

£28,000.00


The Objections

The defendants objected to the claim on the grounds that the third claimant was not liable to its solicitors for any costs and that it had failed to provide the court with the materials that it needed to assess costs. They also injected to the stage claims.

Whether the Third Claimant was Liable for Costs

The defendants argued that the third claimant was not liable for any costs because it had been joined to the action after the case management conference, it had not taken an active role in the proceedings and it was not paying any legal fees.   That argument was squashed by a document signed by the third claimant's solicitor in the following terms:

“The costs stated above do not exceed the costs which the Third Claimant is liable to pay in respect of the work which this statement covers. Counsel's fees and other expenses have been incurred in the amounts stated above and will be paid to the persons stated.”

Although not made in a witness statement or verified by a statement of truth it was good enough for Mr Stone.

Whether the Third Claimant had provided the Court with the Materials it needed to assess Costs

The defendants submitted that the third claimant had not complied with paras 9.5 (1) and (2) of the Part 44 Practice Direction in that it had failed to provide a written statement of costs on Form N260 setting out details of the number of hours claimed, the hourly rates, the grade of relevant fee earners and so forth Instead it had provided a summary schedule that set out the total claimed for each stage for solicitors’ fees, counsel’s fees, and disbursements.

A similar summary had been submitted in Westwood v Knight which Judge Birss QC had described at para [23]of his judgment as a "useful document".   He commended the idea to litigants in the future.

That schedule,  like the third claimant's solicitor's statement as to his client's liability for costs, was good enough for Mr Stone.  He said at para [11] of his judgment:

"The document provided in this case (signed by the Third Defendant’s solicitor) shows solicitors’ fees, counsel’s fees and disbursements. The amounts are, even within the scheme of IPEC litigation, small, with two of the three claimed stages falling within the IPEC stage cap. Whilst it would have been preferable for the full details to have been provided, in the circumstances of this case and on the basis of all the facts available to me from having heard the trial, I do not consider it appropriate to deny the Third Claimant its costs or to reduce the award of those costs, on the basis of its failure to provide a more detailed schedule. In this case, I do not consider that this disadvantages the Defendants in any way: their counsel has been able to provide detailed written submissions on each stage claimed, to which I turn next."

First Interim Application - Costs of Amending the Particulars of Claim

The third claimant applied for permission to be added to the proceedings and for the particulars of claim to be amendedThe defendants resisted the application.   Permission was granted in interlocutory proceedings that cost the third claimant £1,833.50.  The third claimant sought to recover that sum from the defendants.   

The defendants objected on the ground that a party that wishes to amend its statement of case should pay the costs of the amendment including the costs of the other side.  

Mr Stone agreed that that was the general rule and that it should have been followed had the defendants consented to the amendment.  Throughout the proceedings, the defendants had sought to avoid liability on the basis that the registered design owner was not party to the proceedings. When the claimants applied to out that right the defendants continued their resistance. Mr Stone allowed the third claimant the costs of the application in the full amount claimed.

Second Interim Application - Unsuccessful Strike out Application

The defendants applied unsuccessfully to strike out the claim and summary judgment.  In resisting the application the third claimant incurred costs of £6,885.  It sought to recover some of those costs. 

The defendants had two objections.  The first was that their application had not been completely unsuccessful in that they had forced the claimants to provide disclosure and evidence on various licensing issues and that a fair outcome would be for each side to pay its own costs. The second objection was that Table A of the Part 45 Practice Direction limited the recoverable costs to £3,000. 

Mr Stone saw no merit in the first objection.  He said at para [13]:

 "The Claimants were completely successful in resisting the application for strike out and summary judgment, and went on to win the infringement proceedings. The Third Claimant should have its costs."

However, there was no answer to the second.  He limited those costs to £3,000.

Costs of the Trial

The defendants complained of unhelpful conduct on the part of the claimants of which no details appear in the transcript.   Mr Stone disregarded those complaints at para [3] of his judgment.

Outcome

The deputy judge awarded the defendants their claim in full.   He added at para [18] of his judgment:

"It is important in IPEC proceedings that costs assessment not become unnecessary satellite litigation the costs of which are at risk of exceeding the amounts in dispute."

Anyone wishing to discuss this case may call me on 020 7404 5252 during office hours or send me a message through my contact form.

Comments

Popular posts from this blog

Copyright - Ashley Wilde Group Ltd. v BCPL Limited

Copyright in Photographs: Temple Island Collections and Creation Records

What to do about the new Practice Direction - Pre-Action Conduct