Granville Technology Group Ltd & Ors v Infineon Technologies AG & Anor

Costs should reflect the work and issues generated by each claim, rather than simply the number of successful or unsuccessful parties. Where common costs are shared, a private allocation agreement does not bind the court in deciding what it is reasonable for an opposing party to pay.

A percentage reduction is generally inappropriate for criticisms of particular charges where detailed assessment will examine their reasonableness and recoverability. Separate representation may be proportionate for competing defendants, but reasonable cooperation is required to minimise duplication. Costs found not reasonably incurred should be excluded. A reasonable payment on account should ordinarily be ordered under the Civil Procedure Rules 1998.

The claimants brought limitation claims against Infineon Technologies AG and Micron Europe Ltd. In the preliminary-issues judgment, the claims of Granville Technology Group Ltd and VMT Ltd were held time-barred, while the claims of OT Computers Ltd were not: [2020] EWHC 415 (Comm).

The parties agreed that the Granville Companies would pay part of the defendants’ costs and that the defendants would pay OTC’s costs of the preliminary-issues trial. The court had to determine the allocation of costs, whether any percentage reduction was appropriate, the basis of assessment, and interim payments.

1. Allocation of costs. The Granville Companies were treated in substance as a single claimant. The fact that two of three claimants’ claims failed did not justify a 66/33 allocation. The proper comparison was the work generated by the Granville Companies’ claims and OTC’s claim. The former involved significant additional issues concerning actual knowledge and disclosure. A 60/40 allocation was therefore appropriate: the Granville Companies were liable for 60% of the defendants’ costs, and 40% of the claimants’ common costs were attributable to OTC.
2. Percentage reduction. A percentage adjustment was not the appropriate method for addressing criticisms of duplication, document selection, proportionality or particular charges, because those matters could be considered on detailed assessment. Separate representation of the competing defendants was justified, but cooperation was required to avoid duplication. The costs judge was directed to scrutinise the extensive press material relied upon. Costs relating to the David Ward issue were not reasonably incurred and were not recoverable.
3. Basis of assessment. Costs payable to OTC were ordered on the standard basis, with liberty to apply after trial for a variation or supplementary order.
4. Payments on account. Applying CPR r 44.2(8), the court ordered interim payments of £350,000 by the Granville Companies to Infineon, £200,000 to Micron, and £300,000 by the defendants to OTC. OTC was required to hold the payment separately while an appeal remained possible. A further condition delaying payment until the Granville Companies paid Micron was refused.

The judgment itself records the earlier preliminary-issues decision, in which the limitation issues were determined: [2020] EWHC 415 (Comm). This judgment determined the consequential costs issues.