Shorts International Limited v Google LLC

Where a claim began in a costs-capped specialist court and the agreed costs cap survived its transfer, it remains proceedings in which costs recovery was normally limited at first instance for the purposes of Civil Procedure Rules 1998 rule 52.19. The appellate court must weigh the parties’ means, all the circumstances and the need to facilitate access to justice.

The need for access to justice may justify an appellate costs cap where reliable written evidence shows that, without one, a permitted appeal would probably be abandoned. A cap is nevertheless not automatic and should balance that need against the ordinary deterrent effect of adverse costs. Where security for costs is ordered in an appeal subject to such a cap, security should not exceed the capped recoverable costs.

Shorts International Ltd brought a trade mark infringement claim, initially in the Intellectual Property Enterprise Court. Although the claim was transferred to the Intellectual Property List, the parties agreed that the IPEC costs cap would continue to apply.

Mr Michael Tappin KC dismissed the claim after trial on 31 October 2024. Permission to appeal was granted on a number of grounds. Arnold LJ granted further permission subject to an application concerning security for costs, and directed that that application be heard with Shorts’ application for an appellate costs cap.

The issues were whether rule 52.19 applied after the transfer, whether recoverable appellate costs should be capped, and the appropriate amount of security for costs.

Disposition

1. The court granted Shorts’ application for a costs-capping order. Recoverable costs of the appeal and cross-appeal were capped at £60,000.

2. The court also granted Google security for costs of £60,000, the amount of the cap.

Reasons

Rule 52.19 of the Civil Procedure Rules 1998 applied. The relevant proceedings were the trade mark claim which had begun in IPEC, a forum in which costs were normally capped. The agreed continuation of the IPEC cap meant that transfer to the Intellectual Property List did not alter the fundamental nature of those proceedings. The general power in rule 3.19 was not an alternative means of facilitating access to justice.

In exercising the rule 52.19 discretion, Lewison LJ gave substantial weight to the stated need to facilitate access to justice. Shorts had put forward sufficient written evidence of its means, fundraising efforts, lack of available insurance and the unwillingness or inability of associated persons to finance the appeal. Google was able to fund the appeal and would suffer no material hardship from an irrecoverable shortfall. Refusal of a cap would probably cause the permitted appeal to be abandoned.

The court nevertheless rejected the proposed £20,000 cap. Costs capping on appeal is not automatic, and a higher cap may properly retain some ordinary deterrent against an unsuccessful appeal. The appropriate balance was the £60,000 cap which had applied at first instance.

Under rule 25.15, Shorts’ inability to pay Google’s costs if unsuccessful established the threshold for security. The amount remained discretionary. Since recoverable costs had been capped at £60,000, it would make no sense to order greater security. The court therefore ordered security in that sum.

• Court of Appeal (Civil Division) — In [2025] EWCA Civ 653, the court granted a costs cap and ordered security for costs in the pending appeal and cross-appeal.

• High Court of Justice, Intellectual Property List — Mr Michael Tappin KC dismissed Shorts’ trade mark infringement claim after a seven-day trial on 31 October 2024. The citation is not stated in the judgment.

• Intellectual Property Enterprise Court — The claim began in IPEC and was subsequently transferred on terms that the IPEC costs cap would continue to apply.