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. As the claimant rightly submits, in 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.
Impact on the present case
In my judgment, in this case, it would be right to take the following approach.
First, the claimant should have 100% its costs relatively generously assessed (by IPEC standards) down to the date of the Defendants' offer in December 2012. Second, the Claimant should have a reasonable proportion of its costs, but not all of them, after the date of that offer. In my judgment, in all the circumstances, they should have 50% of their costs from that date. Third, the Claimant should not have to bear any of the Defendants' costs. There is an element of roughness about that percentage figure but it is intended to reflect a wide range of factors in this case. They include the following.
First, that the claim was meritorious and had been indicated to be so at the CMC. The Claimant's had put forward a well reasoned case in the Particulars of Claim.
Second, that the Defendants had made a reasonable offer covering substantially all of the relief realistically obtainable at a relatively early stage before significant costs had been incurred, shortly after the Particulars of Claim.
Third, that, following that offer, the case had essentially become largely about costs.
Fourth, that despite the offer, the Defendants were continuing to deny liability, making it impossible for the Claimant to take a cheaper, summary route of obtaining judgment on admissions.
Fifth, that in August 2012 the Claimant noted the changes which had been made by the Defendants from "Boca" to "Bica" but alleged that the changes were not enough to avoid liability, an allegation which was not pursued at the trial and is an issue on which the Claimant has not succeeded. The impact of this is that the Defandants would have had a reason to continue the case in order to show that they were able to continue using the mark to which they had changed which ultimately the Claimant has not sought, at the moment, to prevent.
Sixth, generally in cases of this kind in this court it is right that claimants should know that if they litigate claims all the way to trial where what is in issue after service of the Particulars of Claim is not substantive relief but only a modest amount of costs, they should not expect to recover their full costs of so doing. Equally, defendants should know that if they do not offer a reasonable sum by way of costs at an early stage as part of a settlement proposal which seeks in effect to give in, they will be likely to have to bear a significant proportion of the costs of trial.
That strikes a reasonable balance between providing a fair level of recovery of costs for meritorious claimants while encouraging early resolution of proceedings without a trial.
Finally, the Claimant contends that I should have regard to the conduct of the Defendants in (a) not informing the Claimant about their actual re-branding and the alteration in who was running the café and the status of the company/who was running the new business (b) failing to turn up to the hearing on time (c) failing to provide costs submissions in time. I agree with the Claimant that these matters have, to some extent, increased the costs and the incentive or need for the Claimant to incur them, partly because it is indicative that the Defendants were approaching the case in a manner making harder to resolve at an earlier stage. I have therefore taken them into account in reaching the figure.
I have also taken that into account and do so specifically in certain individual assessments to which I turn.
The parties' contentions
The approach I am taking therefore somewhere between the parties' contentions neither of which I accept in their entirety.
I am not persuaded by the Claimant's argument that it should receive indemnity costs from the date on which HHJ Birss gave his indication on the CMC. It might be said that, following that indication, the Defendants should have made a further approach and offered to pay a significant contribution by way of costs but, in reality, it did not change the position significantly since the Defendants had already proposed changing well before the CMC. Nor am I particularly impressed by the point that the Defendants did not actually tell the Claimant that they had re-branded since this would have been obvious, although in my view, the fact that there was such limited communication by the Defendants had the effect of increasing the Claimant's need to devote time and energy to the case.
I agree with the Claimant's general argument that, in some cases, a preliminary indication can be of importance in the costs evaluation. In particular, if an offer has been made which does not provide for costs, following an indication that the claim is likely to succeed, it is more incumbent on a defendant to make a sensible offer which includes costs if they are to avoid payment of a substantial sum. I have therefore taken that into account in the percentage figure.
It is not, in my judgment, quite correct to say that this is a case in which the Claimants was "forced…to continue the litigation to trial" as is submitted in its skeleton. It is true that it was forced to do so in order to recover any of its costs. But, in the light of the offer, it was not forced to do so to obtain substantially all of the relief it was seeking. That said, I do not think this court should be too critical of claimants who seek to recover reasonable and proportionate costs of well-founded claims. It hardly contributes to access to justice if a claimant which is vindicated in its legal position nonetheless ends up very significantly worse off financially because of the costs it has had to incur to secure its rights.
I therefore do not think, in the circumstances, it would be correct in this case to award the Defendants their costs from the date of that offer (which were modest in any event) as they submit, given that they did not make any proposal at all as to costs at that stage. In this case, it is right that they should bear their own costs throughout. Nor do I think it would be right for there to be no order as to costs. That would not do justice to the fact that the Claimant did have a meritorious claim which it needed to prepare.
Finally, it has been said that there was some further without prejudice save as to costs correspondence from the Claimant in May and August referred to in its skeleton but I was not supplied copies of it and it is not suggested that it is of particular relevance either way. The Defendants did not in any event respond to it and I think the only relevance of it is that it indicates an unhelpful degree of disengagement on the part of the Defendants. Again, I have sought to reflect that in a general way in the percentage figure.
A further without prejudice save as to costs offer was made by the Claimant almost on the eve of trial after most of the costs had been incurred. The Defendants did not disagree with it substantively, save as to costs. I do not think that it takes matters further except that it highlights that the case, by the time of trial, was really only about costs.
The amount of costs
The Defendants submit that the amount of costs claimed are unreasonable and disproportionate, and draw attention to the provisions of CPR 44.3.
The Defendants contend that the hourly rates are excessive and that the assistant solicitors' hourly rate should have been £165, with the involvement of senior fee earners disallowed. The Defendants also contend that substantial reductions should be made for the letters of claim, preparing particulars (as to which they propose £1000 as reasonable). It is said that the sum claimed for general advice is excessive and that 3 hours at £165 should have sufficed. They reject the claim for photocopying and contend that this is not an exceptional case. They contend that the time for dealing with the response to the defence was excessive and that the CMC preparation was unnecessarily costly. Finally they contend that the trial costs were too large and that 12 hours cannot have been required in preparation for the case.
In the context of proceedings in IPEC I think it is right to have regard to a further point. If a party knows that its opponent is not contesting a case and has substantively given in, that affects what it is reasonable and proportionate to do by way of preparation. I also take into account that the rules require a high degree of early preparation. Particulars of Claim include legal argument and an explanation of the justification for the case as well as a significant amount of evidence. Because of that, there is greater justification for looking critically at costs incurred at a later stage which involve an element of duplication of work already undertaken.
I will take this into account, in assessing the costs for the various stages of the case.
Particulars of claim and commencement of action
The costs claimed up to an including service of the particulars of claim are £5868.96. These include photocopying charges of £861.46.
I am satisfied that there is no basis for making an exceptional allowance for photocopying (cf. CPR PD47). There were limited documents which required copying in this case at that stage, indeed the whole trial bundle was about 1 lever arch file and the annexes to the Particulars of Claim considerably less.
However, I do not accept the Defendants' submissions as to the unreasonableness of hourly rate or staffing. It seems to me that relatively junior, albeit experienced, solicitors were employed at appropriate rates for the area, who were properly subject to light partner supervision, given the significant involvement of counsel. That seems to me reasonable, although I think that the fee for general advice and preparing the claim form is somewhat too high and should be reduced somewhat. I therefore award a rounded sum which amounts to about 90% of the claimed costs (excluding photocopying).
Subject to those points, I therefore substantially accept the Claimant's submissions in its reply skeleton as to reasonableness and proportionality of costs under this head and consider that the sum of £4500 should be allowed under this head. This is within the relevant IPEC limit for this stage and does not require further capping.
The offer referred to was made before the following steps were undertaken.
Defence and reply to the defence
The costs claimed are £748. This is not unreasonable or disproportionate and the time spent on considering it seems modest. I propose to round it down to £700. It is within the limit. Having regard to my decision above, I award 50% of this namely £350.
The costs relating to the reply claimed are £1953. In my view, this would have required limited preparation time and I allow £1200. Again this is within the limit. 50% of this is £600.
Case management conference
The total costs claimed for the case management conference are £3087.68 which is above the costs limit for this stage of £2500. 50% of these capped costs is £1250.
Witness statement preparation
There was very limited witness statement evidence but the sum claimed in respect of it is £2709.00. In my judgment, this is more than it is reasonable or proportionate in the circumstances, especially given the work already done on the Particulars of Claim. The only witness statement was very short (4 pages long) and would have required limited lawyers' input. A reasonable sum would be no more than £1000. This is within the limit. 50% is £500.
The total trial costs claimed are £9681.84 including £1707.34 photocopying which I disallow for the reasons given above. So the total trial costs which are recoverable in principle are somewhat less than £8000. Solicitors' preparation and attendance is claimed at £3754.50. Counsel's brief fee claimed is £4000 and the main burden of solicitors' trial preparation was undertaken by an assistant solicitor (some 8 hours pre-trial preparation with an estimate of 7 hours attendance at trial). In my judgment, this figure is too high, given the nature of what was by then at stake and what could have been anticipated in terms of length of trial (c.1/2 day) and resistance to the case. In the event, however, the legal representatives had to spend much of the day at court because the Defendants did not attend at 10.30am.
Although no specific criticism is made of counsel's brief fee and, by the standards of many cases it is relatively modest, it is in my judgment somewhat too high for a ½ day case requiring probably ½ day additional preparation, having regard to (a) what was at stake (b) the prior involvement of counsel and (c) what had already been done by way of preparation on the Particulars of Claim. The trial skeleton was rightly brief and I do not criticize that. However I think that should be reflected in costs. Indeed, the argument about costs has been more lengthy than the argument at trial (there a sum of £500 is claimed for written submissions).
In simple cases in IPEC, if the pleadings are sufficiently detailed, it is not necessary to duplicate points made in the pleadings in the skeleton arguments. Such documents can and should often be very brief, cross-referencing the pleadings or they can say that the pleadings will stand as the skeleton argument, with appropriate additional comments on points which have arisen since then. I have been unable to detect anything of substance said in the documents prepared for trial which was not said in the initial pleadings. That has an impact on the costs which it is reasonable to expect other parties to bear in respect of trial preparation. That said, where it is unclear what line an opposing party (or witness) is going to take, which remained unclear in this case until a late stage, a litigant necessarily has to over-prepare to take account of various possibilities. That necessarily increases the costs and is one reason why trial preparation time is unavoidably significant in almost every case.
It would therefore have been necessary to review the material and prepare for contingencies. Taking all those factors into account, I think that the reasonable and proportionate sums, in all the circumstances, are £3000 by way of counsel's fee and £2500 by way of solicitors' preparation and attendance, making a total of £5500. That is within the limit for this stage.
Again, I will award 50% of that sum, in accordance with the reasoning above, namely £2750, subject to the point made below on conduct.
It is difficult to assess accurately how the Defendants' conduct (and the unsatisfactory submissions as to who was responsible for the café now) have affected costs. Save as regards the costs of arguing about costs, where an additional £500+VAT is claimed, it is not suggested that there was any specific way in which it did. However, in my view the Defendants' approach did have the effect of lengthening the day of trial unnecessarily and, to some extent, the hearing. In my view this had the greatest impact on the actual trial and its aftermath increasing the time both solicitors and counsel have had to spend on the case. It is impossible to be exact about this and I propose to deal with it by increasing the sum I allow for trial costs to take account of this generally and of the costs of arguing about costs by £1000.
For these reasons, the sum I propose to award is as follows
4500 Particulars of Claim.
Costs before December 2012 – Total £4500
350 Considering Defence.
600 Reply to Defence.
1250 Case Management Conference.
300 Witness statements.
3750 Trial and argument on form of order/costs.
Costs after December 2012 – Total £6250
This gives a total of £10,750.
Having reached that conclusion, I step back and consider whether that is a reasonable and proportionate award overall, having regard to the general principles. In my judgment, it is.
For the Claimant, it provides, in effect, generous percentage recovery in respect of costs (ignoring photocopying) from the beginning of the case until the Defendants offered to change the name of their business in the manner discussed above and thereby remove the real cause for complaint. In IPEC, there should be reasonably generous recovery of the modest costs of formulating a sound claim and putting it forward if it is, in substance, accepted. However, it also accords with IPEC's overall approach and ensures that there is a reduced incentive for a claimant to press on to trial after an offer has been made for substantially all of the relief sought at an early stage, even if no offer to pay the costs has been made.
Overall, the sum I am awarding provides a reasonable sum by way of costs to the Claimant (it is about 50% of its total costs ignoring photocopying) but it does not unjustly penalize the Defendant by awarding full costs against it, having regard to their offer. The Defendants for their part will end up paying probably about twice as much as they would have had to pay if they had offered to meet a substantial portion of the Claimant's costs at the end of December 2012 and the claim had been compromised on those terms. This is an illustration of the general principles that there should be a large incentive for a defendant to make a reasonable offer of costs at an early stage if they are giving in and not to put their heads in the sand as regards this aspect.
In my judgment, the sum should be paid within 28 days of the date of this judgment. Each of the Defendants will remain jointly and severally liable for it until it is paid in full.
Since this judgment is provided in writing to the parties, a time will be fixed for handing down in public. The parties need not attend and this judgment need not be treated as confidential in the meantime. The parties should attempt to agree and order with the changes referred to above. I will resolve any wording issues on paper.