England and Wales Patents County Court

IN THE PATENTS COUNTY COURT

		St. Dunstan's House 133-137 Fetter Lane London EC4A 1HD
		19/05/2011

His Honour Judge Birss QC :

1. This is a paper application relating to costs.
2. The history of this matter is as follows. On 7^th December 2010 the claim form in this action was issued. The claim is for infringement of UK and EU unregistered design right relating to furniture.
3. Certificates of service indicate that the Claim Form was served on the first defendant on 14^th February 2011 and the Particulars of Claim were served on the first defendant on 25^th February 2011.
4. The first defendant did not acknowledge service (and did not file a defence). The claimant applied for judgment in default by an application under Part 23. Notice of that application was given to the first defendant on 8^th April 2011. CPR Part 63 rule 63.25(2) provides that the respondent to an application must file and serve a response within 5 days of service. There was no response from the first defendant and so, on 20^th April 2011, dealing with the matter on paper, I made an order for judgment in default of acknowledgement of service. The order included an injunction, an order for delivery up and an inquiry as to damages.
5. Also on that application the claimant sought an order that:

"the First Defendant shall pay the Claimant its costs of and incidental to this Action down to and including this Order those costs being summarily assessed at £8625 (exclusive of VAT) in accordance with the fixed costs scheme for this Court outlined in Part 45.41 of the CPR, such costs to be paid within 14 days."

6. No statement of costs or any other information about the claimant's costs were provided. It was not clear on what basis the claimant claimed the sum in question. Accordingly the order for costs I made on 20^th April was:

7. (i) the First Defendant shall pay the Claimant its costs of this Action

(ii) the Claimant may apply for a summary assessment of its costs within 21 days.

7. Within the period set by that order the claimant applied for the summary assessment of its costs and it came before me to be dealt with as a paper application. In support of its application the claimant puts forward the following:

The claimant claims its costs in accordance with the fixed fee structure of the Patents County Court. When dealing with cases in the Patents County Court, McDaniel & Co. Solicitors charge the set maximum fixed fees for each stage of the case as allowed by the Rules. Costs claimed are set out in the attached schedule.

Time is generally charged on the hourly basis as set out in the attached costs schedule. At present, time billed on this matter equates to £11,737.90. Prior to McDaniel & Co. being instructed, Indigo Furniture Limited had previously instructed Eversheds LLP and had already paid bills amounting to approximately £17,000. The Court will note from the attached, costs claimed are vastly lower than the time billed with the claimant being charged a fixed fee in line with the new PCC regime.

As the claimant is VAT registered it does not require repayment of the VAT by the defendants.

8. The schedule is signed by the solicitor and consists of:

(i) the hourly rates for the partner and solicitors in question (£217 and £161);

(ii) a statement that the fixed rates charged by McDaniel & Co. are set out in a table, (which reproduces the relevant parts of Table A in Section 25 of the Costs Practice Direction (Part 45) applicable in the Patents County Court);

(iii) an indication that the actions undertaken in the present case are "preparing case and drafting Particulars of Claim" with costs of £6,125.00 as well as "Making application for default judgment" with costs of £2,500; and

(iv) a statement in standard form that: "The costs stated above do not exceed the costs which the claimant is liable to pay in respect of the work which this statement covers. Counsel's fees and other expenses have been incurred in the amounts stated above and will be paid to the persons stated".

9. On the strength of this the claimant seeks an order for £8,625 costs.
10. The particular rules relating to costs in the PCC are set out in Section VII of Part 45 of the Civil Procedure Rules. In Westwood v Knight [2011] EWPCC 011 I considered the general approach to their application.
11. The claimant's approach to costs on this application may be based on a misconception. Although CPR Part 45, in which the relevant rules are found, is entitled "Fixed Costs", the costs in the Patents County Court are not fixed. The various sums provided for by the rules and practice direction in this system are maxima (see the Westwood case above). The costs spent or awarded for any particular stage may not be as high as the maximum for a particular stage. By rule 45.41(3) the court will make a summary assessment of the costs of the party in whose favour any costs order is made. As I stated in Westwood (paragraph 22), in order to conduct the assessment the party seeking costs will need to provide information about its costs broken down by stages corresponding to the stages in the Table A (for liability).
12. The first question is whether the Westwood approach can be applied at all in the present circumstances since the claimant's solicitors have not broken down the costs in accordance with the stages and have provided no statement of the hours spent. I have before me the actual fixed costs charged by the claimant's solicitors for the work done: "preparing case and drafting Particulars of Claim" for £6,125.00 and "making application for default judgment" with a cost of £2,500. As I understand the statement these sums are charged irrespective of the time actually spent. It seems to me that the fact that the costs in Section VII of CPR Part 45 are not fixed does not prevent a solicitor from negotiating with his client an arrangement of this kind to charge fixed sums for the work done. As I understand the statement of costs, that is the approach McDaniel have taken here. Thus I have the information about what the actual costs charged were, but do I have sufficient information to summarily assess them?
13. Although the hourly rates are in accordance with the Guideline Rates for Summary Assessment for a Central Newcastle firm such as McDaniel & Co., the rate information is not useful without a note of time spent. However bearing in mind the need to take a proportionate approach having regard to the sums at stake and the few stages involved, it seems to me that it is better to do my best with the information available rather than adjourn the matter, in effect for a second time. As I understand the information provided, all the time spent on the claimant's behalf will relate to the two stages claimed. What is not clear is the amount attributable to each stage. What the application calls "time billed on this matter" by McDaniel is £11,737.90 and Evershed's earlier bill was £17,000.
14. Dealing with the second stage (the application) first, I would be very surprised if an application of the simplicity of the application for default judgment in this case, which did not involve any evidence over and above the application notice and did not involve a hearing, required anything like £2,500 worth of time billed by any of the individual solicitors in this case. That would be more than 15 hours at £161/hr. Should I nonetheless stick with the fixed sum charged by the solicitors? In my judgment, at least in the circumstances of this case, I should not. In my experience applications of this kind in the Patents County Court cost something in the range of £500 - £1,000. I will summarily assess the costs of that stage at £700. That is less than the maximum and so, following Westwood, nothing further needs to be done.
15. Dealing with the second stage, on the basis of my estimate that the application generated no more than £1,000 to time billed costs, that means that the balance of at least £10,737.90 of McDaniel & Co's costs were spent at the "Particulars of Claim" stage. Plainly Eversheds' time will have included substantial time attributable to the same stage. Although it is not realistic to arrive at a particular figure by way of a summary assessment in these circumstances, it seems to me that I can say with reasonable confidence that the figure would be likely to exceed £6,125. That is having regard to the nature of the case and the Particulars of Claim document itself. Although not a complex case, the claim does involve (by my count) a claim to design right infringement relating to more than 35 separate furniture designs.
16. Accordingly I can safely find that the maximum for the Particulars of Claim stage (£6,125) is appropriate in this case.
17. I will summarily assess the costs in this case as £6,825 (£6,125 + £700). There is no need to add VAT because, unlike the Westwood case in which the receiving party was not registered for VAT, in this case the claimant is registered for VAT.
18. This case illustrates the working out of the new costs regime in the Patents County Court on a case by case basis. Although it has proved possible to reach a conclusion in the particular circumstances arising here, in future parties would be well advised to provided costs information in the standard form, including in particular information as to time spent.