England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		Rolls Building 7 Rolls Building Fetter Lane London EC4A 1NL
		26 February 2014

HH JUDGE PELLING QC:

1. This is an application by which the defendant, Mr Reed, seeks an order declaring that the claimants, Arsenal Football Club ("Arsenal") has failed to comply with the terms of a consent order made by the Court of Appeal on 7 November 2013 ("the order)). Paragraph 8 of the order gave the parties liberty to apply to the High Court to enforce. This application was started erroneously in the Court of Appeal but was transferred to the Chancery Division by direction of Lord Justice Patten made on 10 December 2013. This hearing takes place pursuant to a direction of Mrs Justice Rose made on 19 December 2013.
2. Although cast in wide terms originally, by the time the hearing before me commenced, Mr Reed was seeking a declaration that Arsenal had breached paragraph 7 of the order, an inquiry as to damages resulting from the alleged breaches and a mandatory order requiring Arsenal to comply with paragraph 7 of the order in the future.
3. The background leading to the making of the order is set out in paragraphs 7 to 9 of the judgment of Lord Justice Aldous given in these proceedings on appeal from a judgment of Mr Justice Laddie. Having described Arsenal as an internationally known football club that, among other things, carried on business selling products bearing the name of the club and/or devices associated with it, each of which was the subject of a registered trade mark, Lord Justice Aldous described Mr Reed and his business in these terms, at paragraph 10 of his judgment:

"Mr Reed is a self-employed proprietor of a wholesale and retail football merchandise business. Amongst the articles that he sells are souvenirs and memorabilia likely to appeal to Arsenal fans. Such include articles bearing the trademarks, 'Arsenal', 'Arsenal Gunners' and the device marks illustrated above. He accepted that he had, without Arsenal's consent, used in the course of trade signs identical to the registered trademarks relied on by Arsenal in relation to the goods for which they were registered. He denied infringement. No positive case was pleaded in the defence but in voluntary Particulars it was made clear that he was asserting that there could be no infringement if the use complained about was not trademark use and his use was not trademark use."

4. The nature of these proceedings was that summarised by Lord Justice Aldous in paragraph 1 of his judgment as being an action commenced by Arsenal in which Arsenal claimed that Mr Reed had infringed their registered trademarks and carried out acts of passing off. Mr Justice Laddie had concluded that passing off had not been established by Arsenal in a judgment handed down on 6 April 2001 but he referred various questions concerning Arsenal's trademarks to be ECJ. Following judgment being delivered by the ECJ, the case was re-listed before Mr Justice Laddie and in a judgment given on 12 December 2002 he concluded that the ECJ had disagreed with his findings of fact, that he was, in consequence, not bound by its conclusions and concluded that infringement had not been made out. It was from that conclusion that Arsenal appealed. The appeal succeeded for the reasons identified by Lord Justice Aldous in paragraphs 48 and 49 of his judgment in terms that I need not set out in full. Mr Reed was refused permission to appeal to the House of Lords but the orders made by the Court of Appeal, consequential upon the appeal succeeding, were stayed pending determination of an application by Mr Reed to the House of Lords for permission to appeal.
5. Negotiations then took place between the parties. Mr Reed alleges that the primary driver of the negotiations and the terms that were agreed was a concern on the part of Arsenal that if permission to appeal to the House of Lords was granted and the appeal succeeded, its business in goods associated with the club would be severely damaged. Arsenal's case was that settlement was driven primarily by the fact that Mr Reed was not good for the costs already incurred and if permission to appeal was granted, further very substantial costs would be incurred by Arsenal which, in all probability, it would not be able to recover.
6. It is worthwhile noting that these negotiations were commenced after the application for permission to appeal had been made to the House of Lords but before it was considered. Had the sole concern been about costs, then I would have expected negotiations to have been commenced but only in the event that permission was granted. There can be no real doubt that a driver of the negotiations was the risk posed by the application but equally, in my judgment, the prospect of incurring more costs in defending the judgment already obtained from the Court of Appeal would have been a factor and likely a powerful factor in Arsenal's consideration of the position to be adopted in the negotiations. Indeed, such was a major consideration for the parties is made apparent by a letter of 23 July 2003 from Mr Reed's solicitors to Arsenal's solicitors. By that letter, Mr Reed's solicitors withdrew an offer to settle on terms that included a payment by Mr Reed of £50,000. It is instructive to note that those solicitors said of this decision:

"We quite appreciate from Mr Meakin's comments that that will not endear our client to Arsenal Football Club (even if there was, which we doubt, any existing affection)."

Those solicitors then made an offer that led ultimately to the order which was in these terms:

"Mr Meakin used one phrase during our conversation, which was reported to our client, i.e. that your clients were looking for 'an overall resolution of the matter'.

With that in mind, our client now puts forward a further and definitive offer. At the present time, our client is of the view that there is every prospect that the House of Lords will hear this petition. The case has attracted a very considerable amount of interest amongst legal academics, the media, the general public, and of course legal practitioners specialising in this area of law. This coupled with the other obvious factors means that Counsel for Mr Reed has advised that there is a likelihood of the petition being heard.

There is therefore, as far as your clients are concerned at this time, uncertainty and we accept that that uncertainty is the bargaining factor on which our client relies.

Our client will therefore agree to abandon his appeal to the House of Lords in return for which your clients will take no further action against him, that both parties will pay their own legal costs, no funds will pass from Mr Reed to Arsenal, and finally Arsenal will agree to supply Mr Reed with authorised products ordered by him at a price comparable to their lowest wholesale price offered to other market traders.

We accept that your client has incurred considerable expense in conducting the litigation but they will now have what they required at the very outset, i.e. certainty as to their position, as of course, the decision in the Court of Appeal will remain the final decision in the action.

Our client will have suffered considerable financial loss himself, which he will have to bear, but he will, from this time forward, be trading effectively on Arsenal's terms, i.e. supplying official merchandise, which will at least allow him to continue with his livelihood."

That offer was accepted by Arsenal's solicitors by a letter dated 5 August 2003. Thereafter, negotiations took place concerning the precise terms of the order.

7. While these discussions continued, commercial relations between the parties resumed. Mr Cohen, then Arsenal's Commercial Executive, wrote to Mr Reed in these terms on 27 August 2003:

"In light of the recent settlement made between yourself and Arsenal Football Club, I can confirm that the Club will be pleased to sell Official merchandise to you at prices comparable to the lowest wholesale prices offered to market traders.

At present, these most favourable rates that can be provided for you on Official Arsenal own-brand products are -

A 50 per cent discount from its published retail price for souvenirs …

A 40 per cent discount from the published price for merchandise …

For the avoidance of doubt, this excludes Nike and other licensed products (in both cases you will need to discuss supply with the licensee concerned - we would be happy to supply you with a list of licensees if required).

Arsenal impose terms and conditions for traders that purchase at wholesale rates, they are presently as follows:

All purchases need to be paid for in advance by cash, credit card ...

A minimum of one week's notice must be provided ... for all orders that are placed …

Ordered items will be issued provided they are in stock.

Orders have to be redeemed from the Arsenal Warehouse.

Arsenal reserve the right to amend its trading policy at any stage in the future whilst continuing to supply goods at prices comparable to the lowest wholesale prices offered to market traders.

We hope the above terms are acceptable to you and we look forward to receiving your first order in due course. Please let me know if you would like a copy of the current Arsenal catalogue."

8. In the course of the negotiations that continued thereafter concerning the terms of the order, Arsenal's solicitors said of these terms, in a letter addressed to Mr Reed's solicitors:

"Our clients also set out basic trading terms in their email to your client. The terms are the same for all traders.

As previously indicated, Arsenal may alter their terms and conditions in the future. We have suggested that these should be more comprehensive. However, any changes will be applied to all transactions with market traders, your client will continue to be sold goods at prices comparable to the lowest wholesale prices offered to market traders and will remain in a competitively advantageous position.

As we explained over the telephone today, the application of our clients' terms and conditions to their trading with third parties is entirely normal and is not a variation of the terms of settlement. The only obligation imposed by the settlement was in respect of the price as set out above."

9. Ultimately, the consent order was agreed in the following terms:

"… it is ordered by consent …

(3) The Defendant be restrained (whether acting by himself, his servants or agents, or any of them or other howsoever) from doing or authorising the doing of the following acts, or any of them, that is to say infringing the Claimant's United Kingdom registered trademarks …

(4) The defendant shall within 28 days after the Effective Date of this Order deliver up to the Claimant all items, articles and other material (including those in electronic form) the manufacture, sale or use of which in the course of trade would be a breach of the foregoing injunction and verify the same in a witness statement …

(6) The Defendant shall within 28 days after the Effective Date of this Order disclose by way of witness statement the names and addresses so far as they are known to the Defendant of all persons or companies responsible for supplying him with or to whom he has supplied articles, the supply of which, if repeated, would be contrary to the foregoing injunction.

(7) The Claimant shall use its reasonable endeavours to supply goods to the Defendant, pursuant to orders made in respect thereof, at prices which are comparable to the lowest wholesale prices charged by the Claimant to other market traders."

This application is concerned at any rate primarily with the true meaning and effect of clause 7 of the order.

10. Following the order, down to May or June 2011, it is common ground that the pattern of trading was as described in paragraph 10 of Mr Reed's first statement. That is:

"Following that Order, until Arsenal ceased supply in February 2012, my trading relationship with Arsenal continued more or less as follows: I would look on the Arsenal website and choose from the merchandise they had available, and then order directly from Arsenal's merchandise supplier. The supplier would then tell Arsenal what items I had ordered and Arsenal would invoice me directly. This worked well. I would then have goods sent directly from the merchandise supplier (in the case of scarves) or would collect them at the Armoury Store (the new name for the shop inside Arsenal's stadium). Some official Arsenal merchandise was not listed on the Arsenal website and only sold from the Arsenal merchandise supplier's marketing list, and sometimes I would also buy from that list. I would place orders for merchandise at various points throughout the football season, usually for a supply that would last about three or four matches at a time, by telephoning or emailing directly with Arsenal's merchandise supplier. Champions League matches/Cup games were an exception, where it is only possible to know what merchandise (and in what quantities) I will require once matches had been set, and so only one match worth of merchandise would be ordered at a time."

11. Mr Reed describes how, in May or June 2011, following the employment as Mr Pass as Arsenal's Multi-Channel Trading Manager, things started to change. Mr Pass agrees that this was so. He says, and there is no evidence that suggests that this is untrue or wrong, that this was the result of him concluding that the then current arrangements were not viable. He says at paragraph 58 of his statement:

" … AFC could not sensibly continue to provide stock to Mr Reed and other market traders and retailers in the way in which it had done in the past. It was not economic for AFC to employ staff to deal with orders of market traders and retailers, acting as 'middle-man' with licensees and suppliers. AFC was taking on a financial and credit risk, administrative burden and was incurring unreimbursed cost for storage and the handling of stock. This was exacerbated by Mr Reed regularly seeking to change his orders with AFC at the last minute (often communicating by texts and answer-machine messages) and wanting to obtain very small quantities of goods at short notice. Given the lengthy lead time required on orders because of manufacture often in the Far East (typically between one and eight months), Mr Reed's changes of orders often came too late to obtain the goods from the licensee and this resulted in AFC supplying Mr Reed out of its own retail stock and foregoing the profit AFC would otherwise have made from selling goods at the retail price."

12. Ultimately, Arsenal decided to withdraw from wholesale supply altogether and Mr Pass wrote to Mr Reed and all other market traders with whom Arsenal had had a commercial relationship on 14 February 2012 in these terms:

"As you will be aware, the way in which Arsenal manages its retail business has changed dramatically over the last 18 months. As part of these changes we will no longer be selling Arsenal merchandise directly to third party UK traders. However, Arsenal merchandise you wish to purchase can be obtained through our official licensees. Our official licensees will be able to provide you with a wider range of products and improved customer service.

I have included a list of licenses showing the product categories they will be able to supply you with and the appropriate contact details.

Furthermore, please note that following the upcoming UEFA Champions League match against AC Milan official friendship scarves will only be available for sale through official Arsenal stores and we will not be selling or licensing such products to any third parties going forward."

13. Prior to this, during 2011, Mr Reed complains that orders for various products, including but not limited to friendship scarves, were placed which were not filled or fill in full by Arsenal. The detail does not matter for present purposes, although it is set out in paragraphs 12 to 23 of Mr Reed's first statement. In summary, these complaints are characterised as:

a. a refusal by Arsenal to supply certain products;

b. an increase in prices caused by the changed arrangements without it being suggested that the prices charged by the third party suppliers to Mr Reed are any different from those charged to other market traders; and

c. a refusal to supply to Mr Reed all the items that Arsenal sells in its own shop.

14. The claimant contends that these acts and omissions constitute a breach of clause 7 of the order and the decision contained in the letter of 14 February 2012 was, itself, a breach of clause 7. Arsenal denies all of this. They submit that there is nothing, either express or implied, within the order that requires Arsenal to continue to operate a wholesale merchandising business. There is nothing either express or implied that requires Arsenal to make available either to all market traders or Mr Reed, in particular, all the products it chooses to market in its own shop. Overall, clause 7 does not achieve and was not intended to achieve anything other than that Mr Reed would always be charged prices for goods in fact supplied by Arsenal to Mr Reed that were comparable to the lowest wholesale prices charged to other market traders. There is a secondary case advanced by Arsenal based on estoppel by convention but that arises only if its case on construction and implication fails.
15. The relevant legal principles applicable to the construction and implication issues that arise in this case are common ground between the parties. In summary, they are as follows:

a. the principles that apply to a consent order are no different from any other commercial contracts - see Sirius International Insurance Company v FIA General Insurance [2004] 1 WLR 3251;

b. the true meaning of the order is the meaning it would have to a reasonable person having all the background knowledge reasonably available to the parties at the time the agreement was entered into - see ICS Limited v West Bromwich Building Society [1998] 1 WLR 896 at 912-3; and

c. what was said in the course of negotiations is excluded from consideration for the purpose of drawing inferences as to what the contract means but it is admissible to establish facts that constitute relevant background information - see Chartbrook Limited v Persimmon Homes Limited [2009] 1 AC 1101 before Lord Hoffman at paragraph 42.

16. It is now necessary for me to identify the relevant factual background before turning to the terms of the order in general and clause 7, in particular. First it is common ground that Arsenal does not manufacture the relevant goods. It purchases them from entities licensed by Arsenal to manufactures the goods concerned.
17. Secondly, at all material times down to February 2012, market traders dealing in Arsenal's merchandising products purchased stock both from Arsenal and from further up the supply chain from licensees licensed by Arsenal to manufacture or supply such products - see paragraph 7 to 8 of Mr Reed's first statement that Mr Pass accepted to be accurate in paragraph 42 of his statement, and see also paragraphs 44 and 45 of Mr Pass' statement. In my judgment, this is significant because it means that both parties knew that products were sourced from third parties as well as from Arsenal at the time when the terms of the consent order were being agreed. There is no mention anywhere within the consent order of anything concerning the relationship between Mr Reed and third party suppliers. In my judgment, this factor provides substantial support for the view that the purpose of clause 7 was not to confer on Mr Reed a more favourable status than other traders in his position but was to provide him with the comfort of knowing that he would not be subject to any form of trade boycott by Arsenal as a result of any ill feeling caused by the facts and matters leading to the commencement of these proceedings and any further ill feeling generated by the way in which these proceedings were conducted and ended. As I explained at the outset of this judgment the order was the means by which very hostile, long drawn out and expensive litigation was brought to an end. At the time it was brought to an end, Mr Reed could not meet the financial claims that Arsenal had against him. Those facts suggest that the relationship between the parties was strained at the time the negotiations commenced and that much is confirmed by the letter of 23 July 2003, the relevant part of which I quoted from earlier in this judgment.
18. Thirdly, market traders were treated by Arsenal as a distinct group of retailers. Not merely is that what Mr Pass says in paragraph 32 of his witness statement but that is supported by the letter from Mr Cohen to Mr Reed dated 27 August 2003, referred to above, and is supported also by what is said concerning that letter by Lawrence Jones in their letter of 29 August 2003, also set out above
19. Fourthly, there is no evidence that any other market trader within the group had been sued, ultimately successfully, in the way that Mr Reed had been sued by Arsenal down top the date when the agreement leading to the order was reached. Thus, on the one hand Mr Reed, who had been accused of trade mark infringement, had been sued and Arsenal had been ultimately successful in the proceedings whereas on the evidence available to me, all the other traders with whom Arsenal had conducted their businesses lawfully and at no cost to Arsenal. This suggests that while Mr Reed might legitimately feel concerned about his ability to trade directly with Arsenal, there is nothing tangible to suggest that Arsenal would be disposed to give Mr Reed more favourable treatment than other market traders they traded and with whom they had had no difficulties as I have described.
20. I now turn to the terms of the order. As I have said, it contains an injunction in unqualified terms coupled with a mandatory order to deliver up infringing items and a further mandatory order requiring Mr Reed to identify those who had supplied or to whom he had supplied infringing items. There is nothing in these provisions that suggest any concern on the part of Arsenal as to the weakness of their position in law. Indeed, the only provision missing from the order that one would expect from a fully successful action is a provision for an account of profits or inquiries as to damages. That absence is explained entirely by the financial difficulties that Mr Reed was experiencing and was the basis on which negotiations were initiated by his solicitors with Arsenal's solicitors. Thus I do not accept that it is to be inferred that Arsenal considered its position to be legally weak. If anything, the fact that the settlement discussions were initiated by Mr Reed suggest that it was he who considered his position to be a weak one bothn legally and financially by reason of the costs orders that had been made against him down to the date when settlement was agreed.
21. The other point of significance is that both parties were fully aware that stock was available to market traders not merely from Arsenal but also from third party licensees who sold not merely to market traders but to Arsenal as well. There is no suggestion anywhere in the evidence that Mr Reed had concerns about the effect of the litigation on his relationship with third party suppliers. The concern was, and was exclusively, about the relationship between Mr Reed and Arsenal arising from the hostility that had been engendered by the litigation as I have described.
22. I now turn to clause 7. The first and most important issue that arises is whether the decision by Arsenal no longer to sell merchandise to market traders constituted a breach of this provision. I am entirely clear that it does not for the following reasons. There is no express provision in the order that requires Arsenal to continue selling merchandise wholesale for ever more. It was suggested on behalf of Mr Reed that this point was entirely without merit because clause 7 was not qualified by any time condition. If it was not read as imposing an obligation to sell merchandise wholesale to at least Mr Reed for ever more, then the agreement could have been defeated at any stage by the simple expedient of Arsenal withdrawing from this particular market and it could have done so as soon as the consent order had been signed.
23. In my judgment, these points are entirely without merit. First, in fact, Arsenal did not withdraw in the manner it is suggested it could have done. Secondly, it is commercially absurd to suggest that Arsenal would have chosen to act in this manner if the wholesale was one which, as a whole, was commercially advantageous for it. Thirdly, any attempt to withdraw from the wholesale market simply for the purpose of frustrating compliance with the order would be met with the almost unanswerable point that the agreement between the parties embodied in the order was subject to an implied term that precluded Arsenal from withdrawing from the wholesale market for reasons that were capricious or arbitrary. Finally and, perhaps most importantly, although Mr Reed alleges in paragraph 1 of the Particulars he gave in reply to Arsenal's solicitors letter of 6 December 2013 that:

"The Claimant is not itself supplying as a wholesaler either to the Defendant or other traders and has placed itself in that position deliberately so as to frustrate compliance with the order."

There is no evidence of any sort that supports that allegation.

24. In my judgment, the effect of clause 7, when read in its relevant context, is limited to ensuring that for so long as Arsenal remained in the wholesale merchandising market selling merchandising products to market traders, it would supply all the goods it offered in that market to market traders generally to Mr Reed and would do so at prices that were comparable to the lowest prices charged to other market trader customers in that market. There was however no obligation, express or implied, that required Arsenal to continue in a market that it wished to withdraw from particularly where as, here, the unanswered evidence is that it wished to do so for justifiable commercial reasons being those as identified Mr Pass as part of his statement set out above.
25. The alternative way in which the point is put that even if the clause does not require Arsenal to continue to sell merchandise wholesale, it nonetheless requires it to do so to Mr Reed even if it does not do so to anyone else. In my judgment, this point is equally mistaken. As I have explained, it is necessary to read the clause as a whole. The purpose of the clause was to protect Mr Reed from trade discrimination by Arsenal. If Arsenal is no longer participating in the relevant market then, by definition, it cannot discriminate against Mr Reed. The phrase, "… charged by the claimant to other market traders…" puts the point beyond doubt. If Arsenal is no longer selling goods to market traders, then the pricing mechanism becomes unworkable. It only makes sense if clause 7 works and was intended to work as I have described.
26. Although it was submitted by Arsenal that the outcome that I have so far identified resulted alternatively from the use of the phrase "reasonable endeavours" I am not persuaded that that is so. That phrase, I think, qualified the obligation to supply in terms of delivery times, location, minimum quantities and so on rather than the question whether the obligation to supply at all has arisen.
27. The next question that arises concerns various matters complained of in the period between May 2011 and February 2012. The evidence from Arsenal which is entirely unanswered is that what occurred was the result either of particular categories of goods never having been made available by Arsenal wholesale whether to the market trade segment of its wholesale business or at all, or of a commercial decision to withdraw such items from being offered for sale wholesale either temporarily or permanently. The common feature of Arsenal's evidence in relation to all these issues is that it did not discriminate against Mr Reed and thus did not breach clause 7 because it treated all market traders in the same way.
28. In my judgment, clause 7 does not require Arsenal to offer ranges of merchandise to Mr Reed that it does not offer to other market traders. As I have said already, the purpose of clause 7 was not to put Mr Reed in a more favourable position than any other market trader but to provide him with the comfort of knowing that he would not be discriminated against. I return again to the phrase, "… at prices which are comparable to the lowest wholesale prices charged by the claimant to market traders". If the product in question is not sold to other market traders, the pricing mechanism cannot work. This is not a lacuna in the clause. It reflects the fact that the clause is of no application other than to goods sold to market traders as a group. There is no evidence that suggests that in relation to any of the matters complained about Mr Reed has been treated any differently from any other market trader.
29. The final point made is that Mr Reed has to pay higher prices than he used to be charged by Arsenal in relation to broadly comparable merchandise. In my judgment, even if true, this is not a breach of clause 7 either. First, I am unpersuaded that clause 7 obliges Arsenal to impose obligations on its licensees as to how to deal with the licensees' customers in general or Mr Reed in particular. As I have said, all parties were fully aware at the date when the order was made, that Mr Reed sourced products from Arsenal's licensees as well as from Arsenal itself. It was not suggested by anyone at the time that Mr Reed was vulnerable to being discriminated against by third party licensees. Irrespective of whether I am right or wrong on that point, however, there is no evidence that Mr Reed has been subjected to discriminatory pricing or, indeed, that he has been charged a price that is any difference from that charged by any other licensees to any other market trader. There is no evidential basis for the assertion that Mr Reed would have been charged less by Arsenal than the licensees had charged had Arsenal had purchased the goods from the licensees and sold them on to Mr  Reed. Aside from my view expressed already that there was no obligation on Arsenal to adopt such a course if either the goods in question were not sold wholesale to market traders generally or after 14 February 2012, when it ceased to sell directly to other traders, logic suggests that any price charged by Arsenal is unlikely to be less than the licensee from whom, on this hypothesis, Arsenal was purchasing.
30. In these circumstances, I conclude that clause 7 of the order does not carry the construction from which Mr Reed contends. In those circumstances, it is unnecessary that I further lengthen this judgment by considering Arsenal's alternative submissions based on estoppel by convention. In the result, therefore, Mr Reed's application fails and is dismissed.
31. There remains the question of Arsenal's application under CPR 3.1(7). I will hear further brief submissions on that issue before deciding whether to give effect to my provisional conclusion that that application ought to be struck on the grounds that, on any view, it had been commenced prematurely.
Costs
32. There is an application for the summary assessment of the successful claimant's costs of and occasioned by this application. I have so far directed that the defendant must pay those costs. I have further directed that they be assessed on a summary basis.
33. So far as summary assessment of costs are concerned, the test that must be applied in arriving when conducting a summary assessment is to arrive a the sum that is reasonable and proportionate in all the circumstances.
34. The rates which have been charged by the claimant's solicitors are all at or below the guidelines rates applicable for work carried out by solicitors employed or partners in firms practising in the City of London. Therefore, there can be no complaint concerning the rates that have been used.
35. There are two areas on which the submissions made by the defendant are focused. First of all, a claim for some £23,700-odd in respect of work done on the documents. Secondly, a fee charged by counsel for the hearing which totals £16,200.
36. So far as the work on documents is concerned, in responding to the suggestion that the work done has been excessive and disproportionate, counsel for the claimant refers me to the schedule of work done on documents attached to the schedule of costs put out by the defendant's solicitors. The point which is made is that the work on the documents as disclosed on that schedule comes to between 80 and 90 hours of work which compares and contrasts with the amount of work claimed by the claimant which is slightly less. In reply to that point, it is submitted that the work that was done on documents was rather greater than would otherwise be necessary in a case such as this because it was necessary for the current solicitors acting for the claimant to obtain the papers from the solicitors who had previously acted for the purpose of them combing the files in order to obtain the relevant material. While I fully accept that will have increased the work, the fact remains that the number of hours apparently worked in the preparation of witness statements is a truly staggering number of hours having regard to the work product that has resulted. It is suggested that, in effect, some 80 hours of time has been spent in drafting and finalising witness statements by three people. Whilst I do not doubt that the hours that have been claimed have been worked for they have been certified by the partner in the firm concerned signing the declaration in the costs schedule, the question I have to ask is not whether the work was actually done over the hours claimed but whether it was reasonable and proportionate for the work to be done within that time. Given that I have not seen the state of the files and, therefore, it is a little unclear what task faced the solicitors when first they started to approach this task, I am necessarily having to approach the exercise with a somewhat broad brush. However, it seems to me that on the basis of the material available that a grade A fee-earner ought to have been capable of getting this task carried out within a total of about 35 to 40 hours maximum. In my judgment, therefore, the appropriate course would be to allow a total of 40 hours of the preparation of a witness statement by a grade A fee-earner but not any more.
37. I allow the sum claimed for the grade A fee-earner in respect of reviewing the skeleton argument but not that of the grade C fee-earner which, on the face of it, appears to be a complete duplication. Likewise, I allow for the preparation of the statement of costs the sum of two hours claimed by the grade C fee-earner as that would appear to be reasonable having regard to the need to carry out an exercise of bringing together all the various time sheets and sums claimed and so on.
38. I turn now to counsels' fees. It is to be borne in mind that this is a case which is of some importance for Arsenal but, nonetheless, the sum claimed is a high one, even allowing for the fact that counsel is an experienced and specialist professional.
39. The skeleton which was prepared runs to some 18 pages. The case law which is digested in order to identify the relevant principles is, with respect to all concerned, extremely well known. Indeed, it is cited in civil courts up and down the country almost every day of the week. The points that have to be deployed concern the construction of a relatively straightforward order and, within it, a relatively straightforward clause. In my judgment, the sum which has been claimed goes further than what is either reasonable or proportionate and I allow counsels' fees in the sum of £10,000.