Kerry Underwood

IPEC, FIXED COSTS AND REFUSAL TO TRANSFER CASE TO HIGH COURT

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In 77M Ltd v Ordnance Survey Ltd and others [2017] EWHC 1501 (IPEC)

the Intellectual Property and Enterprise Court (IPEC) refused to transfer proceedings to the High Court on the ground that to do so would remove the smaller party’s access to the courts.

Applying the principles set out in

Comic Enterprises Ltd v Twentieth Century Fox Film Corp [2012] EWPCC 13

the judge said that it was clear from the accounts of 77M Ltd that it would be unable to fund litigation if it risked the high costs payable in the High Court.

Ordnance Survey Ltd had not offered any formal undertaking to limit 77M’s costs liability.

The value of the claim carried little weight as 77M had agreed to waive the limit on the maximum amount of damages that could be awarded in the IPEC.

There is a time limit of three days for a trial in the IPEC and the judge thought the matter could be concluded within three days but did not rule out the possibility that the case might still be transferred at the Case Management Conference if it transpired that this would not be possible, even after the issues had been narrowed down.

Comment

This is a potentially important decision given the Fixed Recoverable Cost Pilot now taking place in the Commercial Court in relation to claims up to £250,000.00 and in advance of Lord Justice Jackson’s report on extending Fixed Recoverable Costs, which report which to be published in July 2017.

That pilot, like the IPEC, is voluntary, but it suggests that the courts will be reluctant to transfer matters to the old open costs system.

This makes perfect sense. The whole point of Fixed Recoverable Costs is that it introduces certainty for the parties, who can then make an informed decision as to whether or not to proceed with litigation.

If a party was to start a case on the basis that there would be Fixed Recoverable Costs, but it is then transferred to the open costs regime, then it defeats the point of Fixed Recoverable Costs and effectively amounts to retrospective procedural legislation in relation to that party.

The IPEC has capped, rather than fixed, costs but those costs generally reach the cap and therefore it is akin to a Fixed Costs Scheme.

It is widely regarded as a great success and reinforces the view that although there is great resistance to fixed costs, once lawyers become involved in fixed costs systems they like them.

There is overwhelming evidence that clients want fixed costs.

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Written by kerryunderwood

June 30, 2017 at 9:57 am

Posted in Uncategorized

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