Back in July of this year Birss QC handed, sitting in the Patents County Court, handed down his judgment in the case of Gimex International Groupe Import Export and (1) The Chill Bag Company Limited; (2) Kiki’s Import & Export Limited; (3) David Samuel Turner; (4) Colin David Brand; and (5) David Frederick Brand. For short I will simply refer to this case as the Chill Bag case,
By way of a quick recap for those that missed July’s decision, Gimex claimed that Defendant’s 1 and 2 infringed its Community Registered Design No. 616057-0001. Defendants 3, 4 and 5 were directors of the respective companies and it was argued that they were personally liable for the acts of the companies. Birss ruled that Defendants 1 and 2 had infringed the design and determined that the question of the directors liability be hived off to be decided on later along with an enquiry as to damages (hoping that the parties could settle).
One question therefore remained: costs.
A summary assessment as to costs was made however an issue of principle arose at the hearing. The problem in essence was as follows:
Gimex had incurred costs of approximately £119,000. These had been attributed to one single bill that covered the proceedings as a whole. Birss did make the point (and I would say it is how I deal with multiple defendant matters) that the costs could be split into two portions i.e. ‘genera’ costs attributable to the defendants overall and those attributed to each defendant – or in this case between the two camps (i.e. 1st, 2nd and 3rd defendants were not represented and formed one camp and the 4th and 5th defendants were represented and formed a second camp).
Gimex’s position was that the costs should be split between the camps and accordingly the PCC’s cost cap should be against each camp i.e. Gimex should be able to recover costs up to £50k from each camp (in actual fact Gimex sought £45k from each camp). However Birss decided that:
…this was not the right approach. The defendants as a whole were jointly and severally liable for the claimant’s costs. The claimant’s costs were summarily assessed as a single set of costs for each stage with a single overall cap.
Birss determined that the two principles at battle here were costs orders being compensatory in their nature against the very purpose of the costs cap being as it is to give litigants certainty. Paras 21 and 22 of the judgment gave Birss’ decision:
21. I think the terms of CPR r45.42(1) were drafted with a clear intention behind them. The words are clear. The court will not order a party to pay total costs of more than the capped sum. That means a litigant in the PCC has the security of knowing that, subject to certain exceptions, the costs cap will protect their exposure to the other party’s costs. This interpretation of r45.42(1) facilitates access to justice for smaller and medium sized enterprises. This interpretation cuts against a fully compensatory approach to costs but it does so in a context in which another forum is available with a more compensatory costs regime (the High Court).
22. Accordingly I reject Mr Cuddigan’s key submission. If Gimex had lost this case, even though they were suing two separate camps of defendants, Gimex’s costs liability would have been capped at £50,000 by r45.42(1). Therefore it seems to me there is no justification for allowing Gimex to take the approach it proposes and share out its single costs bill as between two sets of defendants and thereby recover more than £50,000 in costs in these proceedings.
The decision does bring to mind situations where such an application of the costs cap may not be appropriate. For example where where the defendants plead very much different cases or even where the finding of liability differs between the Defendants. Accordingly Birrs did make clear that such concerns would need to be raised at the Case Management Conference.