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How we get paid- Costs!

Written by Michael Coyle on 01 March 2014

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Legal costs in the Intellectual Property Enterprise Court can be significantly curtalied if offers to settle prior to or after the claim form has been issued have been ignored.

In a recent case concerning offers to settle Judge Hacon said:-

"The IPEC has made a significant contribution to access to justice in intellectual property matters and has enabled cases to be brought which would not have been possible before. That is partly because of the limited costs regime. The object of this court is, not only to decide cases more efficiently and cheaply but also to help SMEs resolve disputes without the need for a trial. Quite often, the biggest obstacle to early resolution in such cases is costs. Legal costs are so large these days that they can run into many of thousands of pounds, even for a small case at an early stage. It is important for this court to be careful not to encourage disputes to continue which are, in essence, only about costs, where one side or the other has essentially given in. SMEs should be encouraged to concede points early, if they do not have a good case and to do so early. One of the ways in which this court can achieve this aim is to take account of reasonable admissible offers made to settle a case at an early stage of proceedings......................one of the purposes of IPEC is to ensure so far as possible that cases are not about costs in the way they can become in other fora..............[in the] IPEC, it is important that settlement should be encouraged and that there should be "rewards" for making settlement offers. It is in my judgment therefore right to take significant account of such offers".

FACTORS

Factors that the Intellectual Property Enterprise Court considers when considering costs were contained in the case of Westwood v. Knight [2011] EWPCC 11. However the Civil Procedure Rules ('CPR') contain all that is required when considering costs.

CPR Rule 44.2 provides, amongst other things:

(1) The court has discretion as to –

(a) whether costs are payable by one party to another;

(b) the amount of those costs; and

(c) when they are to be paid.

(2) If the court decides to make an order about costs –

(a) the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party; but

(b) the court may make a different order.

(4) In deciding what order (if any) to make about costs, the court will have regard to all the circumstances, including –

(a) the conduct of all the parties;

(b) whether a party has succeeded on part of its case, even if that party has not been wholly successful; and

(c) any admissible offer to settle made by a party which is drawn to the court's attention, and which is not an offer to which costs consequences under Part 36 apply.

(5) The conduct of the parties includes –

(a) conduct before, as well as during, the proceedings and in particular the extent to which the parties followed the Practice Direction – Pre-Action Conduct or any relevant pre-action protocol;

(b) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;

(c) the manner in which a party has pursued or defended its case or a particular allegation or issue; and

(d) whether a claimant who has succeeded in the claim, in whole or in part, exaggerated its claim.

10. CPR Rule 44.4 provides inter alia:

(1) The court will have regard to all the circumstances in deciding whether costs were –

(a) if it is assessing costs on the standard basis –

(i) proportionately and reasonably incurred; or

(ii) proportionate and reasonable in amount, or

(b) if it is assessing costs on the indemnity basis –

(i) unreasonably incurred; or

(ii) unreasonable in amount.

(2) In particular, the court will give effect to any orders which have already been made.

(3) The court will also have regard to –

(a) the conduct of all the parties, including in particular –

(i) conduct before, as well as during, the proceedings; and

(ii) the efforts made, if any, before and during the proceedings in order to try to resolve the dispute;

(b) the amount or value of any money or property involved;

(c) the importance of the matter to all the parties;

(d) the particular complexity of the matter or the difficulty or novelty of the q uestions raised;

(e) the skill, effort, specialised knowledge and responsibility involved;

(f) the time spent on the case;

MJC

If you'd like to know more about this article please send an email to Michael Coyle quoting the article title and any questions you might have, alternatively call the office number on 02380 235 979 or send an enquiry through our contact form.

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