Phaestos Ltd & Anor. v Peter Ho

Proceedings should be transferred to the Technology and Construction Court where the bulk or preponderance of the issues is technically complex, or where trial by a TCC judge is desirable. The court should take a pragmatic view of the pleaded issues, likely time and cost, judicial expertise, expedition, expert evidence and case management. The fact that proceedings arise from employment does not prevent transfer. The status quo is relevant where the competing venues are substantially equally appropriate, but it need not be preserved where transfer is likely to save time and costs.

The claimants applied to transfer two consolidated Queen’s Bench Division claims to the Technology and Construction Court. The claims arose from the dismissal of two former employees of companies within the IKOS Group and included allegations concerning duties, bonuses, profit shares, confidential information, surveillance, mathematical models and complex computer programs.

The defendants relied on the technical nature of the pleaded allegations and the anticipated need for IT, trading-practice and other expert evidence. The claimants opposed transfer, relying on the employment context, existing interim-relief proceedings, delay and the non-technical elements of the dispute. The central issue was whether transfer was appropriate under the Civil Procedure Rules, Practice Direction 60 and the TCC Guide.

The application was granted and the consolidated claims were transferred from the Queen’s Bench Division to the Technology and Construction Court under CPR 30.5.

1. Under CPR 60.1(3), a claim may be brought in the TCC where it involves technically complex issues or questions, or where trial by a TCC judge is desirable. The examples in paragraph 2.1 of Practice Direction 60 are not exhaustive and must be read with that rule.
2. The transfer discretion requires a pragmatic assessment. The court should consider whether the claim falls within the relevant specialist categories, the financial value and complexity of the claim, the likely effects on cost and expedition, convenience, and where the bulk or preponderance of the issues lies. The approach in Natl Amusements (UK) Ltd v White City (Shepherds Bush) Limited Partnership [2010] 1 WLR 1181 was applied.
3. The status quo will generally favour the existing venue where there is little significant difference between the courts. It does not justify retaining proceedings where the specialist court is materially more appropriate and transfer is likely to save time and costs. The employment context neither required nor prevented transfer.
4. The pleaded disputes concerning mathematical modelling, coding, testing, version control, risk-management systems, causation and lost trading opportunities were central and likely to require substantial technical and expert evidence. The TCC’s experience in IT disputes, disclosure and expert-evidence case management therefore made trial in that court desirable.
5. The pending interim-relief issues before King J did not prevent transfer. Matters arising from that application were to remain reserved to King J, subject to further order and liberty to apply. The delay in seeking transfer did not alter the result because the consolidated pleadings had only recently closed and no step made transfer inappropriate.