Equisafety Limited v Battle, Hayward and Bower Limited & Anor

Interest awarded under Civil Procedure Rules 1998, rule 36.17(3), does not override the Intellectual Property Enterprise Court stage and overall costs caps. The caps may be lifted only in truly exceptional circumstances or where there has been an abuse of process. Misguided, ill-judged or unfortunate conduct is insufficient without unusually serious behaviour. A late adjournment application may justify an award of costs thrown away, but the resulting award remains subject to the applicable overall cap.

The proceedings concerned trade mark infringement and passing off. The First Defendant had been found liable, and the Claimant subsequently succeeded at an account of profits trial. The court had already determined the profits, interest and most costs issues, including the effect of a Part 36 offer.

This supplemental judgment resolved whether the First Defendant should receive interest on its costs of the account of profits proceedings and whether the Claimant’s post-trial conduct justified costs outside the IPEC caps. It also determined the costs caused by the late adjournment of the form of order hearing.

1. Interest on costs. The court accepted that it would not be unjust to award interest on the First Defendant’s costs under rule 36.17(3) of the Civil Procedure Rules 1998. The costs had been incurred when paid to solicitors, consistently with Marathon Asset Management LLP v Seddon [2017] 2 Costs LR 255.
2. However, Martin v Kogan (No.2) [2017] EWHC 3266, [2018] FSR 10 established that rule 36.17(3) does not override the IPEC stage and overall costs caps. Since the costs awarded were already the maximum permitted for the relevant stages, there was no scope to add interest.
3. Costs outside the cap. The circumstances justifying disapplication of the IPEC caps are limited to truly exceptional cases or abuse of process. Westwood v Knight [2011] EWPCC 11, Azumi Ltd v Zuma’s Choice Pet Products Ltd [2017] EWHC 45 and Link Up Mitaka Ltd (t/a thebigword) v Language Empire Ltd (No.2) [2019] FSR 9 were relied upon for that principle.
4. The Claimant’s conduct after the account of profits judgment, including failures concerning interest calculations and costs schedules, was misguided or unfortunate but did not amount to truly exceptional circumstances, unusually bad behaviour or an abuse of process. No additional costs outside the caps were therefore awarded on that basis.
5. Adjournment costs. The late application to adjourn the form of order hearing caused the First Defendant costs to be thrown away. The court awarded an additional £2,000, but did not lift the overall cap. The First Defendant’s total costs for the Quantum proceedings were thereby increased to £25,000, subject to set-off against the Claimant’s costs.