Mars UK Ltd v Teknowledge Ltd
| Jurisdiction | England & Wales |
| Judge | MR. JUSTICE JACOB |
| Judgment Date | 11 June 1999 |
| Judgment citation (vLex) | [1999] EWHC J0611-10 |
| Court | Queen's Bench Division (Administrative Court) |
| Date | 11 June 1999 |
[1999] EWHC J0611-10
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Mr. Justice Jacob
MR. SILVERLEAF, Q.C. and MR. R. ARNOLD (instructed by Messrs. Clifford Chance, London, EC1A 4JJ) appeared for the Claimants.
MR. MARK VANHEGAN (instructed by Messrs. Blakesley Rice MacDonald, Chesterfield) appeared for the Defendants.
I have, following judgment in the action, a considerable dispute about the costs. All the other remaining matters, save for one to be considered next, have been agreed.
What happened in the action was that the Claimants succeeded in their claims for infringement of copyright and like rights but failed in their action for breach of confidence. They accept that so far as the latter is concerned they should not recover any costs. They do not accept that they should pay the costs of the Defendant who won on that issue. Both sides have agreed that, whatever else I do, there should be an apportionment if (which is disputed) there is to be a payment of costs by the Defendant at all. So the first issue I have to decide is what should be done about the Defendant's claim for their costs for the breach of confidence issue.
The next issue is whether or not there should be an amount payable on account before the costs are assessed pursuant to the provisions of CPR 44.3(8). This in part raises a general question and in part a question specific to this case. The general question is what the normal rule should be after a full trial. Before the CPR, if costs were sent off to taxation there was no power to order interim payment. But now there is such a power. Should the court normally order an interim payment? The question peculiar to this case is this: if the general rule is that there should be an interim amount ordered, should that rule be departed from here? The final issue relates to quantum. I have an affidavit from Miss Marsland, a partner in Clifford Chance, the Claimant's solicitors, who indicated that Mars' costs of this action had been over £550,000 on a full solicitor/client basis. That to my mind is an extraordinarily large amount.
Under CPR 44.4(1) when the court is assessing costs the court will not allow costs "which have been unreasonably incurred or are unreasonable in amount." So if I order an amount paid on account, I have to form a rough view as to the ultimate amount of assessed costs in respect of which an interim payment is to be made.
I turn to the first question, whether or not the Defendants should get their costs of the issue of breach of confidence. Mr. Silverleaf says that the test must be whether or not the claim was unreasonably advanced. He points to CPR Part 44.3(4) and (5). (4) reads:
"In deciding what order (if any) to make about costs, the court must have regard to all the circumstances, including —
(a) the conduct of all the parties;
(b) whether a party has succeeded on part of his case, even if he has not been wholly successful; and
(c) any payment into court or admissible offer to settle made by a party which is drawn to the court's attention (whether or not made in accordance with Part 36)."
(5) requires the court in assessing the conduct of the parties to consider things which it did not do under the previous rules. Necessarily applications about costs are likely to take more time. Nonetheless that may achieve more overall justice. The conduct of the parties under rule (5) includes the following:
"(a) conduct before, as well as during, the proceedings, and in particular the extent to which the parties followed 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 his case or a particular allegation or issue;
(d) whether a claimant who has succeeded in his claim, in whole or in part, exaggerated his claim."
What Mr. Silverleaf says is that I should take into account the fact that the Claimants won and got an order stopping the Defendant doing what it was doing. The fact that one of the reasons he advanced for getting that order failed does not mean that they did not basically win. So I should say that it was reasonable for them to raise, pursue or contest the particular allegation or issue, namely the action for breach of confidence. I take that into account, but I think the claim was only barely reasonable. Yes, it was to some extent arguable, but I cannot see how the Claimants could have thought they could have won the action under the law of confidence if they had lost on their copyright claim. It was an unnecessary allegation and I think it should not have been run for that reason too. I think accordingly the Defendants should be given credit for their costs of that issue.
I now turn to the second issue, whether or not there should be an order for interim payment. The first thing to do is to consider what the general rule should be, interim payment or not. There is no guidance given in the Rules other than that the court may order a payment on account. There is no guidance in the Practice Direction. So I approach the matter as a question of principle. Where a party has won and has got an order for costs the only reason that he does not get the money straightaway is because of the need for a detailed assessment. Nobody knows how much it should be. If the detailed assessment were carried out instantly he would get the order instantly. So the successful party is entitled to the money. In principle he ought to get it as soon as possible. It does not seem to me to be a good reason for keeping him out of some of his costs that you need time to work out the total amount. A payment of some lesser amount which he will almost certainly collect is a closer approximation to justice. So I hold that where a party is successful the court should on a rough and ready basis also normally order an amount to be paid on account, the amount being a lesser sum than the likely full amount.
This is likely to have practical advantages in another way. The motive for trying to prolong a detailed assessment, namely putting off the evil day when payment has to be made, will be considerably reduced when he who has to pay can only put off the evil day in respect of a considerably reduced sum. Moreover the whole point of the detailed assessment as a commercial matter may become less important with the result that there will be less detailed assessments than there used to be of taxations of costs. Thus I start from the proposition that there should be an interim payment in general. However, the court has a discretion. In exercising that discretion the court must take into account all the circumstances of the particular case. One of those is that the Defendant may wish to appeal. Another is dealing with the case in a way which is proportionate to the financial position of each party, one of the matters which one must consider in allowing the overriding objective of enabling the court to deal with the cases justly. The overriding objective applies as much to the exercise of the costs discretion as to any other discretion given under the...
To continue reading
Request your trial
-
Excalibur Ventures LLC v Texas Keystone Inc. and Others
...e.g. Beach v Smirnov [2007] EWHC, 3499 or similar expressions. Several of the cases were decided before the rule changed. In Mars UK Limited v Teknowledge Limited [2000] SFR 138, Jacob J, as he then was, said that, "a payment of some lesser amount, which he will almost certainly collect was......