MITIGATING THE IMPACT OF THE COURT FEE INCREASE 3: ONLY CLAIM WHAT ITS WORTH AND WHAT YOU ARE GOING TO GET

This is the third in the series on mitigating the effect of court fees.  The new fees regime makes clear the need for as much accuracy as possible in assessing what the likely award is going to be.  An additional point, however, is that that if damages is not the claimant’s main aim then careful consideration should be given to the value given to the action. Further there is no point claiming damages at a certain sum if the reality is the defendant is never going to pay them.

AN EXAMPLE: INTERCITY TELECOM -V- SOLANKI

A good and  recent  example of a well conducted case, done on the basis of a  frugal budget, is Intercity Telecom -v- Solanki [2015] EWHC B3 (Mercantile). Here the claimant company was, in essence, fighting an important battle for survival following the theft of trade secrets.  It was doing this in the face of obstruction and lies from the defendants.

  • It was felt that there was lost revenue of £2.7 million with lost profit of £1 million.
  • However the claimants restricted their claim to cases where there was strong evidence of the clients being interfered with and accounts being lost.

The judge awarded damages based on these loss of £290,000.

CLAIMING WHAT YOU CAN EASILY PROVE

I know that Intercity is, on one level, not a good example,  because the court fee bow  would be the same with damages over £200,000.  The Advice in this case relates to claims where the claimant can claim (or is likely to recover) damages less than £200,000.

However the principle remains the same and could have a substantial impact on claims less than £200,000.

  • The claim could be pursued on the basis  damages for those matters which could demonstrably and easily be proved.
  • This reduced costs of pursuing the action at trial and, where damages were less than £200,000, would reduce the court fee.

I am not here advocating the easy abandonment of all “difficult” heads of damage for the sake of it. Rather I am advocating  that careful consideration must be given to the size of the claim prior to issue and a careful costs-benefit analysis carried out which includes the impact, and likely recoverability, of court fees. A “guess high” approach to the value of a claim could lead to a considerable reduction in costs and disallowance of part of the court fee.

WHERE DAMAGES ARE SECONDARY

In Intercity it  was equally as important to the claimant to obtain an injunction. If an injunction is the primary aim then the damages claimed could be regarded as a secondary issue.

ARE YOU EVER GOING TO RECOVER DAMAGES AND COSTS IN ANY EVENT?

Careful consideration needs to be given as to whether damages and costs will be recovered in any event. If there is a distinct possibility that the defendant is a man on straw then there is much to be said for claiming “nominal” damages.

BUT WHAT ABOUT COSTS AND PROPORTIONALITY IF THE DAMAGES CLAIM IS REDUCED

There are a number of issues here:

  • If in fact the court fee is “overclaimed” the additional sum may not be recoverable in any event.
  • The claimant can credit the court with some commonsense.  See the judgment of HH Simon Brown QC in the Intercity case itself.

The Claimants’ costs budget of 11th August 2014 anticipating a 3 day trial amounted to £82,307.50. In each phase of work apart from Disclosure, Trial preparation and Defendant’s applications and ADR/Settlement they have come in well under budget. In each of those phases where costs incurred have exceeded budget, it is due to the erratic conduct of the Defendant who has mainly been representing himself throughout. In my judgment, the total costs incurred of £68,959.25 is ‘not unreasonable’, nor are they phase by phase. Even on a standard basis the costs are ‘proportionate’ to what is at stake; not just £290,009 but also to the importance of the case to the Claimants’ business which may be in danger of losing £2.7m in revenue by virtue of Mr Solanki’s illegal activities. Further, in my judgment, the costs incurred are ‘reasonable’ even if assessed on a ‘standard’ basis.”

RELATED POSTS ON MITIGATING THE IMPACT OF THE COURT FEE INCREASE

1. Limitation standstill agreements.

2. Fee remission: Every litigator has to know this now.

 

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