Court provides fee clarity
This case offers useful guidance on the question of what payment is required on issue of a claim, writes Chris Morris. [2016] EWHC 2092 (Ch), Lifestyles Equities CV and Another v Sportsdirect.com Retail Ltd and Others, High Court, 11 August 2016.
[2016] EWHC 2092 (Ch), Lifestyles Equities CV and Another v Sportsdirect.com Retail Ltd and Others, High Court, 11 August 2016
Key points
- Master Clark found that an inquiry requiring an assessment of the amount of damages is not a non-monetary claim
- She clarified that account of profits claims are non-monetary
Trade mark infringement (and other IP) claims are split into two elements: liability and quantum. A quantum assessment will not be carried out until liability is established, so the actual value of claim will be unknown at the outset of an action. Following changes, however, which mean that fees can be as high as £10,000 for a claim greater than £200,000, but just £528 for a non-monetary issue, this lack of initial certainty has become a very important concern.
Claim comparison
In the case at issue, an initial claim was brought in respect of both trade mark infringement and inducing a breach of contract. The Claimants paid the non-monetary issue fee (then £480). The Defendants asked for the claim to be stayed until the Claimants paid the correct fee.
The Claimants sought an order for “payment of all sums due by way of an inquiry as to damages or at the Claimants’ option an account of profits” with an undertaking that they would pay the appropriate court fee if they succeeded on liability. This was expanded in the particulars to confirm that the relief sought was:
- an inquiry to damages for the inducement to breach claim; and
- an inquiry to damages, or alternatively an account of profits for the trade mark claim.
The Claimants argued authority suggested that account of profit claims are non-monetary and, as such, only the lower fee was payable (as in Page v Hewetts Solicitors ).
Following a case management conference, Master Clark issued a decision on the Defendants’ application. She found that “the fact that an inquiry requires an assessment by the court as [to] the amount of damages is not sufficient for it to be a non-money claim.” On that basis, the claim should be stayed, because the correct fee had not been paid in respect of the breach of agreement claim.
However, Master Clark went on to consider the position had the claim been for trade mark infringement alone. In that scenario, she found the appropriate fee had been paid. Agreeing with Page v Hewetts Solicitors, ie that an account of profits is a non-monetary claim, she decided that “it is a process by which the court investigates whether the defendant has in fact made any profits from his wrongdoing to which the claimant is entitled. The result of the process may be a finding that the defendant holds no profits and no monies are payable.”
The fact that a claim to an enquiry to damages was included as an alternative does not matter. While the court fee schedule is not easy to construe, she continued, “it would be anomalous if a claimant with sufficiently early information about the defendant’s activities to enable it to elect for an account of profits in its claim form could pay only [the lower non-monetary fee], but a defendant without that information must pay the higher fee. Further, the two forms of relief are not mere alternatives, but are mutually exclusive; and it is not until a claimant elects for an inquiry (which it may not do) that it can be said that its claim is to recover money.”
Practical application
The approach taken in this case should mean that, in purely IP cases, claimants will be able to bring cases without having to pay potentially very high fees at the beginning of a claim whose true value is unknown.
Chris Morris is a Senior Associate and Trade Mark Attorney in the IP team at Burges Salmon LLP