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You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Trappit SA & Ors v GBT Travel Services UK Ltd [2024] EWHC 3285 (Ch) (18 December 2024) URL: https://www.bailii.org/ew/cases/EWHC/Ch/2024/3285.html Cite as: [2024] EWHC 3285 (Ch) |
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CHANCERY DIVISION
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INTELLECTUAL PROPERTY LIST
Fetter Lane, London, EC4A 1NL |
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B e f o r e :
____________________
(1) ![]() ![]() (2) ![]() ![]() (3) 2MC GESTION Y CONSULTORIA S.A. |
Claimants |
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- and - |
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GBT TRAVEL SERVICES UK LIMITED |
Defendant |
____________________
George Spalton KC, Benjamin Williams KC and Jaani Riordan (instructed by Eversheds Sutherland (International) LLP for the Defendant
____________________
Crown Copyright ©
CHIEF MASTER SHUMAN:
i) The fifth and sixth witness statements of John McElroy, partner at the claimants' solicitors, dated 24 July 2023 and 17 November 2023.
ii) The seventh witness statement of Mark Howarth, partner at the defendant's solicitors, dated 2 October 2023.
THE LAW
"(1) Unless the court orders otherwise, a claimant who discontinues is liable for the costs which a defendant against whom the claimant discontinues incurred on or before the date on which notice of discontinuance was served on the defendant."
" Under CPR r.38.6 the court has to be persuaded that it is just to depart from the normal rule that the discontinuing party should bear the other party's costs. The burden of satisfying the court that some other consequence should follow, rests on the party discontinuing. Justice would normally lead to the conclusion that a defendant who defended himself at substantial expense against a claimant who changed his mind in the middle of the action for no good reason, other than he had re-evaluated the factors that had remained unchanged, should be compensated for his costs."
"It is clear from the terms of r. 38.6(1) and from the authorities that a claimant who seeks to persuade the court to depart from the normal position has to provide cogent reasons for doing so, and is unlikely to satisfy that requirement, save in unusual circumstances. A claimant who commenced proceedings takes upon himself the risk of the litigation. If he succeeds he can expect to recover his costs, but if he fails, or abandons the claim, at whatever stage in the process, it is normally unjust to make the defendant bear the costs of the proceedings which were forced upon him, and which the claimant is unable or unwilling to carry through to judgment: Brookes v HSBC Plc: Jemitus v Bank of Scotland Plc … [2011] EWCA Civ 354."
"(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;
(d) whether a claimant who has succeeded in the claim, in whole or in part, exaggerated its claim; and
(e) whether a party failed to comply with an order for alternative dispute resolution, or unreasonably failed to engage in alternative dispute resolution."
"i) when a claimant discontinues the proceedings, there is a presumption by reason of CPR 38.6 that the defendant should recover his costs; the burden is on the claimant to show a good reason for departing from that position;
ii) the fact that the claimant would or might well have succeeded at trial is not itself a sufficient reason for doing so;
iii) however, if it is plain that the claim would have failed, that is an additional factor in favour of applying the presumption;
iv) the mere fact that the claimant's decision to discontinue may have been motivated by practical, pragmatic or financial reasons as opposed to a lack of confidence in the merits of the case will not suffice to displace the presumption;
v) if the claimant is to succeed in displacing the presumption he will usually need to show a change of circumstances to which he has not himself contributed;
vi) however, no change in circumstances is likely to suffice unless it has been brought about by some form of unreasonable conduct on the part of the defendant which in all the circumstances provides a good reason for departing from the rule."
"It is clear, therefore, from the terms of the rule itself and from the authorities that a claimant who seeks to persuade the court to depart from the normal position must provide cogent reasons for doing so and is unlikely to satisfy that requirement save in unusual circumstances. The reason was well expressed by Proudman J. in Maini v Maini: a claimant who commences proceedings takes upon himself the risk of the litigation. If he succeeds he can expect to recover his costs, but if he fails or abandons the claim at whatever stage in the process, it is normally unjust to make the defendant bear the costs of proceedings which were forced upon him and which the claimant is unable or unwilling to carry through to judgment. That principle also underlies the decision of this court in Messih v MacMillan Williams. There may be cases in which it can be said that the defendant has brought the litigation on himself, but even that is unlikely to justify a departure from the rule if the claimant discontinues in circumstances which amount to a failure of the claim."
"30. The hurdle to displace the default rule in CPR Part 38.6(1) is also a high one. A claimant who discontinues must (see Moore-Bick LJ's sixth principle in Brookes v HSBC Bank) generally show some form of unreasonable conduct on the part of the defendant which provides a good reason for departing from the rule. The height of this hurdle can be illustrated by two examples.
31. First, the mere fact that a claimant has got all or almost all he could reasonably hope to achieve from the proceedings has been said not to justify a claimant from relying on the avoidance of a trial which would be solely about liability to recover costs as justifying a departure from the default rule: see Patten LJ in Messih v MacMillan Williams [2010] EWCA Civ 844 at [28], [30] and [31]. In Brookes v HSBC Bank, after referring to what Patten LJ stated, Moore-Bick LJ observed (at [10]) that a claimant who seeks to persuade the court to depart from the default rule must provide cogent reasons and is unlikely to be able to satisfy the court that there is good reason to do so save in unusual circumstances. In Messih's case the achievement by the claimant of what he had sought from the proceedings by a settlement with one of a number of defendants did not justify disapplying the rule when he discontinued against other defendants.
32. The second example concerns the position of disputed material. It is clear that once there is to be no trial, it is not the function of the court considering costs to decide whether or not the claim would have succeeded: see Re Walker Wingsail Systems PLC [2006] 1 WLR 2194, per Chadwick LJ at [12], and HHJ Waksman's second principle in Teasdale v HSBC Bank PLC, [2010] EWHC 612 (QB) at [7(2)]. But it is also clear (see Moore-Bick LJ's sixth principle in Brookes v HSBC Bank)) that it is the function of the court to consider whether the unreasonableness of a defendant's conduct provides a good reason for departing from the default rule."
"34. What is the position where the conduct relied on by the claimant as a ground for departing from the default rule is unrelated to the merits of the claim or the defence? Such a scenario may appear far-fetched. But, leaving that aside, to require the claimant to proceed to a trial where the real issue concerns conduct of the defendant unrelated to the pleaded cases seems a waste of scarce court resources and the resources of the parties."
"(1) Where the court is to assess the amount of costs (whether by summary or detailed assessment) it will assess those costs—
(a) on the standard basis; or
(b) on the indemnity basis,
but the court will not in either case allow costs which have been unreasonably incurred or are unreasonable in amount."
Where no basis is indicated in an order the costs will be assessed on the standard basis.
"Where one is dealing with the losing party's conduct, the minimum nature of that conduct required to engage the court's discretion would seem, except in very rare cases, to be a significant level of unreasonableness or otherwise inappropriate conduct in its widest sense in relation to that party's pre-litigation dealings with the winning party or in relation to the commencement or conduct of the litigation itself. …
But in each case in which the costs of the whole litigation are under consideration, the conduct adversely criticised must be looked at in the context of the entire litigation and a view taken as to whether the level of unreasonableness or inappropriateness is in all the circumstances high enough to engage such an order."
"The discretion is a wide one to be determined in the light of all the circumstances of the case. To award costs against an unsuccessful party on an indemnity scale is a departure from the norm. There must, therefore, be something – whether it be the conduct of the claimant or the circumstances of the case – which takes the case outside the norm. It is not necessary that the claimant should be guilty of dishonesty or moral blame. Unreasonableness in the conduct of the proceedings and the raising of particular allegation, or in the manner of raising them may suffice. So may the pursuit of a speculative claim involving a high risk of failure or the making of allegations of dishonesty that turn out to be misconceived, or the conduct of an extensive publicity campaign designed to drive the other party to settlement. The making of a grossly exaggerated claim may also be a ground for indemnity costs."
THE APPLICATIONS
The Background
The Litigation in Spain and England
"In other words, it now appears to redirect the subject matter of the proceedings to another program, different to that which gave rise to the criminal claim and therefore different to LastFare. … the criminal complainant's intention consisting in a modification of the subject matter of the proceedings cannot be admitted. "[9]
"Considering the foregoing, it is not acceptable that, now, the complainant states that this information is irrelevant and attempts to modify the object of the investigation, alleging the existence of alleged crimes of discovery … by the defendants allegedly appropriating the ARPO programme, with the defendants using certain tricks and subterfuges … as said assertions are based on the assumptions and conjectures. There is no indication whatsoever that GBT Spain had access to the ARPO program nor that it was issued with it at any time."
"if there is no res judicata in Spain arising out of the provisional dismissal of the Spanish Proceedings, no issue estoppel can arise in England."
However, he did go on to observe the following points,
"179. So far as purpose is concerned, the Defendants contend that the English Proceedings claims were commenced after five years of fruitless litigation in Spain, claiming substantial but unparticularised damages, and it can be inferred that they are designed to exert leverage upon American Express to reach some form of settlement contrary to the intrinsic merits or true value of the dispute.
180. Those are powerful points and well made.Trappit
Tec has clearly pursued persons associated with the Defendants extensively in the Spanish Proceedings over a considerable period of time, but appears to have got nowhere in establishing the fundamental allegation of plagiarism of the ARPO program at the heart of its complaints.
181. The points made by the Defendants have given me substantial pause for thought. So too has the point that, for reasons that I have explained, the NDA prevents the claims byTrappit SA against AmEx Europe from being litigated in England. Although that factor is not relevant to the analysis under Article 25 for the reasons set out in paragraph 70 above, it does point to unified civil proceedings in Spain as being the most appropriate to resolve all the issues between the parties.
182. As such, I regard the English Proceedings as very close to the margins of an abuse or misuse of the process of the English courts. However, on balance I do not consider that they are sufficiently unfair to the Defendants or risk the administration of public justice in England being brought into disrepute so as to warrant striking them out as an abuse."
"ARE was not copied or derived from ARPO but rather from FarelQ. GBT UK did not write, nor does it have or has it ever had access to or the right to obtain, the source code for ARE."
The Yapta licence was annexed to the defence, albeit in redacted form.
"GBT remains willing, in principle, to exchange this code with your clients, however before it commits to the costs associated with commissioning experts to review source code, please confirm what further purpose the Claimants consider that the exchange of LastFare and ARPO source code would serve at this stage, in particular given Mr Folgado's clear conclusion that LastFare was not plagiarised from ARPO."
Decision
Note 1 White Book paragraph 44.3.9 [Back] Note 2 An assertion that was removed from the re-amended particulars of claim served on 19 November 2021. [Back] Note 3 Mr McElroy’s 5th witness statement, paragraph 7. [Back] Note 4 Paragraph 39 of the amended defence. [Back] Note 5 Press Release dated 27 February 2015. [Back] Note 6 The defendant says 2 June 2015. [Back] Note 7 Mr McEloy refers to GBT Spain. [Back] Note 8 Claimants’ solicitors letter dated 1 September 2022, point 6.4 [Back] Note 10 A summary of the evidence from Mr Gabriel Castro, set out at paragraph 48 of the judgment of Snowden J [ 2021] EWHC 1344 (Ch). It is described by the Crown Prosecution Service as a “realistic prospect of conviction”: https://www.cps.gov.uk/principles-we-follow
[Back] Note 11 Claimants’ skeleton paragraph 58(d). [Back] Note 12 Claimants’ solicitors letter dated 10 May 2022, point 2. [Back] Note 13 Claimants’ skeleton argument paragraph 23. [Back] Note 14 Defendant’s revised costs budget dated 18 July 2022. [Back] Note 15 Paragraph 2 a, by 4pm on 4 August 2022 the insurance cover be no less than £1,459,573.32, comprising 75% of the costs incurred by the defendant and 100% of the costs budgeted for the disclosure phase. Paragraph 2b, by 4pm on 19 November 2022 the level of cover be no less than £2,272,173.32. (extended later to 27 January 2023) Paragraph 2c, by 4pm on 27 October 2023 the cover be no less than £4,808,158.32. [Back]