Flowcrete UK Limited & Ors v Vebro Polymers UK Limited & Ors

On interim applications, the unsuccessful party will generally pay the successful party’s costs, subject to the court’s discretion and all the circumstances, including conduct. Where an interim injunction is granted merely to hold the ring pending a substantive hearing, costs should generally be reserved. If the application ultimately fails, the applicant is ordinarily liable for the costs of that application.

Springboard relief is an extreme and potentially harmful form of interim relief. It should be granted only where the applicable tests are clearly satisfied. Imaging orders are intrusive and require stringent justification, including a demonstrated paramount need. Disclosure searches must be reasonable and proportionate, with scope and date ranges directed to the issues genuinely requiring investigation.

The claimants, companies supplying industrial and construction chemicals, alleged that the defendants had misappropriated confidential information and breached restrictive covenants. They sought interim orders including delivery up and destruction of documents, imaging orders, restrictions on use of confidential information, springboard relief and preservation measures.

At hearings on 19 April and 21 June 2021, limited interim measures were made or undertaken. Springboard relief and an imaging order were ultimately refused. The costs of both hearings were reserved for determination at the first case management conference, where the issue could not be decided for lack of time. The court also determined disclosure guidance issues under Practice Direction 51U.

1. Costs principles. Under Civil Procedure Rules 1998, rule 44.2, the court has discretion as to costs, subject to the general rule that the unsuccessful party pays the successful party’s costs, while having regard to all the circumstances, including conduct. Costs may be reserved or made costs in the case under Practice Direction 44, paragraph 4.2.
2. Where interim injunctive relief is granted on a balance-of-convenience basis merely to hold the ring pending trial, there are ordinarily no successful or unsuccessful parties and costs should generally be reserved: Desquenne et Girrel UK Ltd v Richardson [2001] FSR 1, at paragraph 15. That principle applied to the April hearing because the limited springboard undertaking was only interim relief pending the June hearing.
3. Springboard relief is an extreme form of interim relief capable of harming legitimate business interests. It should be granted only where the applicable tests are clearly made out. The claimants’ application failed because the evidence concerning the Ti Spreadsheet was imprecise, speculative and insufficient to show current or useful material, or actual use by the defendants. The defendants therefore succeeded on that issue and recovered the relevant costs.
4. Imaging orders are intrusive and should be made only where a paramount need is demonstrated. They are not ordinary commercial litigation orders and the requirements for making them are stringent. The evidence did not satisfy that test, so the imaging application was refused.
5. The defendants recovered 70 per cent of the April hearing costs, with the balance to be reserved or made costs in the case, and 80 per cent of the June hearing costs, reflecting unnecessary costs caused by aspects of the defendants’ conduct.
6. For disclosure, searches must be reasonable and proportionate. The court accepted the principle in Gulati v MGN [2013] EWHC 3392 that a claimant may remain entitled to pursue its case where relevant disclosure is likely to be in the defendant’s hands, unless the prospects of obtaining it are fanciful. The court consequently limited custodians, search terms, data sources and date ranges by reference to the issues requiring disclosure. The parties were required to engage collaboratively with the disclosure process.