In any litigation one of the most pressing issues for claimants and defendants is costs. Both will have committed considerable amounts of money to legal action which they will be anxious to recover but it can be a long wait for the successful party. Under the old rules they often had to wait months pending taxation of costs.
The ongoing requirements of cost payments can have a negative effect on the cash flow of both sides and, if the delay in recovering final costs is too long, the company or individual may have ceased trading altogether and the successful party never get what the courts decided was just.
A recent case involving copyright infringement between Mars UK Ltd v Teknowledge Ltd has shown, that in future, the courts will take positive action to secure speedy financial restitution for the successful party.
This case is noteworthy as Mars, although successful overall, did not recover costs for the part of its claim which was unsuccessful and, in assessing the amount of costs, Mr Justice Jacob contrasted Mars’ heavy-handed action in starting proceedings against Teknowledge’s attempts at co-operation and negotiation, and penalized Mars accordingly.
Taking into account the circumstances of the case, the relative financial state of the companies, the possibility of appeal and the conduct of the parties, Mr Justice Jacob ordered that an amount of money, which the claimants would have received at the end of the costs assessment, was to be paid by the defendants straight after the trial as an interim payment.
Concluding that Mars would only be likely to recover 40% of its costs of £550,000, Mr Justice Jacob ordered Teknowledge to pay Mars an interim payment of £80,000 in instalments with an initial sum of £30,000 and further payments of £10,000 in the following five months.
This order for prompt and proportionate payment reinforces the objectives of the Woolf Reforms to deal with cases justly and timely, thus helping to restore the financial balance of the parties.
This case also provides a warning to companies pursuing unsuitable claims or ignoring attempts at conciliation.
For further information please contact Susan Pemberton, 2 Park Lane, Leeds LS3 1ES, Tel: +44 113 284 7000
This article was first published in the Autumn 1999 issue of Hammond Suddards' Commercial Dispute Resolution Newsletter.
The information and opinions contained in this article are provided by Hammond Suddards. They should not be applied to any particular set of facts without appropriate legal or other professional advice.
