In the final week before the robot octopus returns to action on his (her?) own account, there are a couple of events which particularly caught his attention. Both relate to the use of the “small claims track”. This is intended for simple, low value cases where, bluntly, the amount in issue does not really justify legal representation. For that reason, usually the Court will not award any costs of lawyers (although court fees will be recoverable). The relevance for attorneys is pretty evident: where it applies, their winning clients will not be able to recover the costs of attorney representation.
First is something which could be of major significance for many individual designers, copyright owners and trade mark holders. The Government has now confirmed (New intellectual property court processes will boost business) that it will introduce a small claims track for litigation in the Patents County Court where the amount in issue is less than £5,000 (It's interesting that the Department for Business, Innovation and Skills refers to the “intellectual property court”. The writer had heard suggestions that the Government did not think it was justified at present to change the PCC’s name to that!). The details are still to be worked out but it is expected to be on the blocks in the course of next year – ideally by “this time next year”! A consultation is apparently planned in the New Year on implementation.
Just as a reminder, the proposal made in the Jackson Review of civil litigation costs was for a small claims and fast track procedure for copyright and designs claims (Recommendation 6, page 257 – actually not restricted to any specific form of IP). The Government confirmed that it would look at it in its response to the Hargreaves Review (Response 9, page 11, and Recommendation 8, page 17 (which talks of introduction in Autumn 2011!), for introduction of a small claims track for copyright, designs and possibly trade marks). It has now given the go-ahead to the small claims track, although there will be work to be done to see how this fits in with the current rules. There is no mention of a fast claims track, and this seems to have fallen off the radar, although maybe there is a feeling that the PCC procedure already looks fast enough.
The current general small claims procedure or small claims track is referred to in the Civil Procedure Rules, CPR 27. The most important provision here is on costs, CPR 27.14, which provides that essentially no costs are recoverable other than court fees, or where a party has behaved unreasonably. Otherwise the procedure looks like an informal version of the PCC, with the exception that there is no preliminary hearing unless there is a need to make special directions (CPR 27.6 and 27.4)
The guts of the small claims procedure are set out in CPR 27.8. This provides for an informal hearing, often referred to as arbitration:
(1) The court may adopt any method of proceeding at a hearing that it considers to be fair.(2) Hearings will be informal.(3) The strict rules of evidence do not apply.(4) The court need not take evidence on oath.(5) The court may limit cross-examination.(6) The court must give reasons for its decision.In addition, there are some other limitations: CPR 27.5 (No expert evidence without leave – not much different from the PCC), and CPR 27.2 (b) and (c) (No disclosure and inspection and the general CPR provisions on evidence are disapplied).
Welcome though this is, it is not happening immediately – although it is quite possible that claimants could wait until the procedure is implemented. When implemented it will mean two things for attorneys considering litigating in the PCC. First, it opens up a real opportunity for clients in relation to really small disputes (concerning copyright, designs or trade marks); and secondly, in such cases the attorney needs to be aware that costs may be even more limited than in under the current PCC procedure. As the octopus keeps reminding attorneys, the fact that there is a maximum level of recoverable costs in the PCC does NOT mean that the judge is going to award costs up to that maximum level, so the difference may not be as great as the difference between £50,000 and zero.
The second is a warning to attorneys that, just because the small claims track is not available in the PCC yet, it does not mean that there may not be an impact. Deakin v Card Rax and Bees Knees Trading  EWPCC 3 was heard in June 2010 and judgment was given this February 2011. It is one of those apparently sorry pieces of litigation where it seems that the rational perspective of at least one person has been blurred by their feelings. What looks to be a minor copyright claim between two “ladies” who run “SMEs”, and involving a “third lady” (who had money), has caught seven different parties in its web and involved five cases to adjudicate. The issues were distilled from some 65 or so, to a mere 36 issues, which are set out conveniently for readers in the Annex. As the judge observed (possibly like all too many IP disputes), “the action had in truth become a fight about its mountainous expenses and costs” (para 12, 13).
The essence was a dispute about greetings cards – it seems this is a very litigious business judging by reported cases on greetings cards and the like. The case, heard by Judge Michael Fysh QC (under the old rules) is worth reading just for his analysis of the evidence given by the witnesses, and learning how the balance of such evidence may play out: not altogether in favour of the claimant, although the defendant’s evidence was also found to be wanting in places. In all, the judgment runs to 330 paragraphs. That gives an idea of the scale of the arguments.
However, for the purposes of this note, paragraph 19 is the one of interest. Counsel observed that “the case [at least one significant aspect of it] should have been cast as a County Court money claim arising from alleged breaches of contract - and fit for the small claims track at that”. The argument was that this was essentially just about licence agreements and payments under them, not copyright infringement. Although the judge found that this was indeed the case (since the licences had not been terminated) we are left not knowing in this judgment what the impact of that was on costs. In other cases which should have been brought on the small claims track, but were not, the Court has penalized the relevant party seriously in costs (see for example Peakman v Linbrook Services  EWCA Civ 1239 – although in that case one might have expected costs to be awarded against the judge, based on the Court of Appeals comments). Readers' further information would be welcomed.