Akhtar vBhopal Productions (UK) Ltd & Ors

In IPEC proceedings, costs awarded for unreasonable behaviour under CPR 63.26(2) remain subject to the stage caps in Practice Direction 45. CPR 45.32 places those costs outside the overall total-costs cap, but does not remove the separate stage limits. A single stage cap normally applies collectively where several defendants are represented in the same proceedings. The court retains a general discretion concerning costs, but lifting a stage cap for unreasonable behaviour requires unusually bad conduct. An abuse of process requires more extreme conduct. The claimant’s inadequate pleading and unsuccessful amendment application therefore attracted the maximum applicable stage costs, but not an uncapped award.

The claimant brought copyright proceedings concerning a film and applied to amend inadequate Particulars of Claim. At a hearing on 11 December 2014, the court dismissed the application in the form proposed, while leaving open the possibility of a properly pleaded amendment. The claimant was found to have behaved unreasonably. The judgment determined the consequential costs issues, principally whether CPR 63.26(2), CPR 45.32 and Practice Direction 45 removed or affected the £3,000 stage cap for an IPEC application, whether separate caps applied to different defendants, and whether the conduct amounted to an abuse of process.

1. Stage cap. Costs awarded under CPR 63.26(2) are additional to the overall total costs permitted by CPR 45.31(1), but remain subject to the maximum stage costs in CPR 45.31(3) and Practice Direction 45. The reference in CPR 45.32 to costs awarded under rule 45.31 concerns total costs, not the stage-cost limits. The wording of the rules was too clear to support the defendants’ proposed wider construction.
2. Relationship with earlier decisions. Henderson v All Around The World Recordings Ltd [2013] EWPC 19 and F H Brundle v Perry [2014] EWHC 979 (IPEC) confirmed that the general costs discretion survives the IPEC costs regime, subject to the policy favouring certainty. BOS GmbH & Co KG v Cobra UK Automotive Products Division Ltd [2012] EWPCC 44 concerned the different question of set-off and did not justify rewriting CPR 45.31(3) and CPR 45.32. The assumption in Phonographic Performance Ltd v Hamilton Entertainment Ltd [2013] EWHC 3467 (IPEC) was reconsidered because the point had not been argued.
3. Multiple defendants and discretion. Following Gimex International Groupe Import Export v Chill Bag Company Ltd [2012] EWPCC 34, the defendants shared one stage cap. Separate caps might be appropriate where defendants were required to run distinct, non-overlapping arguments, but that situation did not arise. Lifting the cap required unusually bad behaviour, and the claimant’s conduct did not meet that threshold.
4. Orders. The second to sixth defendants were awarded £3,000, payable within 14 days. The claimant could serve a further draft amended pleading within 21 days, subject to the directions stated in the judgment.