Philip Price & Ors v Flitcraft Limited & Ors

Permission to appeal a costs decision requires a real, rather than fanciful, prospect of success or another compelling reason. Where the court has exercised its costs discretion, intervention is justified only if the decision exceeded the generous ambit within which reasonable disagreement is possible.

A stay of costs pending appeal depends on the risk of injustice to each party. Relevant considerations include the risk of irrecoverability, whether the appeal may be stifled, the merits of the appeal and the parties’ financial positions. An interim payment on account should ordinarily be ordered under the Civil Procedure Rules 1998, using the approved costs budget as an appropriate starting point and allowing for uncertainty.

The judgment concerned further applications following earlier liability and costs judgments in patent, copyright and passing-off proceedings. The court determined the claimants’ applications for permission to appeal aspects of the costs orders, both parties’ applications for stays, and the defendants’ application for interim payments on account of costs.

The earlier judgments included [2022] EWHC 3381 (Pat), [2023] EWHC 695 (Pat) and [2023] EWHC 1222 (Pat). The central issues were whether the proposed appeals had a real prospect of success, whether enforcement should be stayed pending appeal, and what sum should be paid on account before detailed assessment.

Permission to appeal. The claimants’ applications were refused. Applying CPR r.52.6(1), the proposed grounds had no real prospect of success and disclosed no other compelling reason for an appeal. The costs decisions reflected the separate nature and differing success of the parties’ patent, copyright and passing-off claims. The indemnity costs order was confined to the failed patent claim and fell within the court’s discretion.

Stays. The defendants’ appeal had a more than fanciful prospect of success, and the evidence showed a very real risk that the second claimant would be unable to repay costs if the appeal succeeded. The claimants provided no comparable evidence of irrecoverability or other injustice. The court therefore ordered a stay of the costs payable by the defendants to the second claimant, pending the defendants’ appeal or further order, but refused a stay of the sums payable by the claimants.

The relevant inquiry under CPR rr.52.16 and 52.7 was whether granting or refusing a stay created a risk of injustice. The parties’ different claims, financial positions and prospects on appeal justified different treatment.

Interim payments. Under CPR r.44.2(8), a reasonable payment on account should generally be ordered unless there is good reason not to do so. The court applied the guidance in Excalibur Ventures LLC v Texas Keystone Inc, taking the approved costs budget as the starting point because the court could not determine the defendants’ application to revise it. CPR r.3.18(b) was not directly applicable to the interim assessment, but confirmed the importance of approved budgets and explaining departures from them.

The first claimant was ordered to pay £178,857 and the second claimant £12,775.50 within 28 days.

This was a first-instance decision on further applications following earlier judgments in the same proceedings:

• High Court (Patents Court): liability determined in [2022] EWHC 3381 (Pat).
• High Court (Patents Court): costs determined in [2023] EWHC 695 (Pat).
• High Court (Patents Court): permission to join the Official Receiver determined in [2023] EWHC 1222 (Pat).
• High Court (Patents Court): the present applications were determined on the papers.