Analysis of Cost Assessment and Part 36 Offers in Equisafety Limited v Battle Case

Citation: [2024] EWHC 283 (IPEC)
Judgment on

Introduction

The case of Equisafety Limited v Battle, Hayward and Bower Limited & Anor [2024] EWHC 283 (IPEC) concerns legal disputes over trade mark infringement and passing off. This article analyses the case law, focusing on the key topics addressed in the proceedings within the Intellectual Property Enterprise Court (IPEC). The legal principles involved are articulated, with references to the relevant parts of the case law summary.

Key Facts

In the Equisafety Limited v Battle, Hayward and Bower Limited & Anor case, liability for both trade mark infringement and passing off was established against the First Defendant by Deputy Judge Nicholas Caddick KC. Whilst the Second Defendant was not found personally liable, various forms of relief were ordered, including an injunction and a declaration. The costs of the trial were reserved, and subsequently, an account of profits was pursued by the Claimant. The Quantum trial concluded with a judgment handed down by Recorder Amanda Michaels, which addressed the profits, interest, and costs incurred.

  1. Costs Assessment and Award:

    • Costs were assessed based on the IPEC stage costs caps, which limit the recoverable costs in IPEC proceedings to ensure proportionality.
    • The Claimant’s director’s own costs were not added to the Claimant’s legal costs due to insufficient clarity on whether these costs were incurred pre-representation.
    • An accord was reached whereby the Claimant’s costs of the Liability trial were assessed after a 10% discount due to issues lost at trial, which is a common practice in legal cost assessments.
    • Offsetting costs awarded to one party against the costs owed to the opposing party is a standard procedure to arrive at the net amount due.

  2. Part 36 Offers:

    • The case applied Civil Procedure Rule (CPR) 36 principles regarding offers to settle, where the First Defendant was entitled to its costs after the expiration of its Part 36 offer due to the Claimant not obtaining a judgment more advantageous than the offer.
    • Under CPR 36.17(3)(b), interest on those costs would typically be awarded. However, pursuant to Martin v Kogan (No.2) [2017] EWHC 3266, the IPEC stage costs cap cannot be exceeded to add interest, demonstrating the precedence of the cost caps in IPEC.

  3. Interest on Costs:

    • Interest can be awarded on costs, but IPEC costs caps remain authoritative. The case referenced Marathon Asset Management LLP v Seddon [2017] 2 Costs LR 255 for the calculation of interest from the date costs were incurred.

  4. Exceptional Circumstances for Lifting IPEC Caps:

    • Lifting of the IPEC cap may occur in exceptional cases or where there is abusive process (as detailed in Westwood v Knight [2011] EWPCC 11 and Azumi Ltd v Zuma’s Choice Pet Products Ltd [2017] EWHC 45), but the instant case did not meet the threshold for such.

Outcomes

The case concluded with a detailed breakdown of the financial remedies:

  • The First Defendant was required to pay £12,568 in profits and £2,140.92 in interest.
  • The Claimant’s costs for the Liability trial were set at £33,763.15 but were reduced after offsets to £22,263.15.
  • The First Defendant’s costs post-Part 36 offer expiration were ordered as £23,000, set off against the Claimant’s costs entitlement for the initial Quantum proceedings stages.
  • There was no addition of interest on costs from the First Defendant due to the IPEC costs cap application.
  • Additional costs awarded to the First Defendant amounted to £2,000 in relation to a late application adjournment, bringing total costs for the Quantum proceedings to £25,000.

Conclusion

Equisafety Limited v Battle, Hayward and Bower Limited demonstrates the intricacies and complexities of resolving costs in intellectual property litigation, especially within the parameters of the IPEC costs regime. The application of Part 36 offers serves to encourage settlement and can significantly impact the ultimate distribution of costs. The sovereignty of IPEC cost caps, even when considering additional charges as interest, underscores the Court’s commitment to maintaining accessible and proportionate legal costs for litigants. The judgment also sheds light on the standards that must be met to lift the IPEC cap, a measure that preserves the integrity of the court’s streamlined process for smaller or less complex cases.