Shazam Productions v Only Fools the Dining Experience & Ors (Costs)

On a contested interim application, costs will ordinarily follow the event, but the court must exercise its discretion under Civil Procedure Rules 1998 r 44.2 having regard to all the circumstances. Relevant considerations include the conduct of the parties, the relative success achieved, the adequacy and timing of evidence, and access to justice. Where incomplete financial evidence causes additional costs, the court may make a proportionate costs award rather than order the successful party’s costs in full. Summary assessment should allow reasonable and proportionate costs, with appropriate reductions for excessive work, unreasonable hourly rates and work relating to a separate issue.

The judgment concerned costs following an earlier decision transferring intellectual property proceedings from the High Court’s Intellectual Property List to the Intellectual Property Enterprise Court. The transfer applications had been made by the Fourth Defendant and by the First, Second, Third and Fifth Defendants. In the earlier judgment, the court had provisionally expressed the view that the costs should be costs in the claim, subject to written submissions.

The defendants sought their costs of the transfer applications, while the claimant argued that costs should remain in the case and challenged aspects of the sums claimed. The Fourth Defendant additionally sought a wasted costs order and compensation for time spent as a litigant in person. The issues were the appropriate costs order, summary assessment, and the recoverable amount of the Fourth Defendant’s personal costs.

1. The court exercised its discretion under Civil Procedure Rules 1998 r 44.2. Although the general rule is that the unsuccessful party pays the successful party’s costs, the court must consider all the circumstances, including party conduct, partial success and admissible settlement offers. That discretion applies to applications, including through Practice Direction 44.

2. The transfer application was a contested, free-standing interim application rather than an ordinary case-management step. Costs could therefore be expected to follow the event. The claimant was not required by the rules to issue the claim in the IPEC, but was required to give consideration to doing so where the likely damages or account of profits were £500,000 or less. The court applied Lifestyle Equities v Sportsdirect.com [2016] EWHC 2092 (Ch) in concluding that the claim became a money claim for the relevant purposes only when an election for damages was made.

3. The financial evidence supporting the transfer was initially incomplete. Further evidence was required, and the claimant was reasonably entitled to scrutinise the defendants’ financial position. Those circumstances justified reducing the costs award. The claimant was ordered to pay 50% of the Brandsmiths Defendants’ costs.

4. On summary assessment, the court reduced the claimed Grade A hourly rate from £500 to £400, allowed the Grade C rates, apportioned 10% of the costs to the claimant’s separate Part 18 application, and allowed £3,000 for reasonable post-judgment work. The Brandsmiths Defendants’ costs were assessed at £20,200, of which 50% was payable.

5. The Fourth Defendant’s application could not be considered in isolation. The same 50% costs order applied. There was no basis for a wasted costs order. Under r 46.5 and Practice Direction 46, the Fourth Defendant’s litigant-in-person costs were assessed at £1,500, in addition to £2,500 for represented work and the £255 application fee. The claimant was ordered to pay £2,127.50 within 14 days.