Claimant Litigant in Person recovers 150 per hour for his time

Spencer and another v Paul Jones Financial Services Ltd (unreported), 6 January 2017 (Senior Courts Costs Office)

Summary

A claimant litigant in person can recover costs at his typical hourly rate (150). Whilst the burden of proving such financial loss lies on the claimant, the burden is not impossibly high.

Facts

C had pursued a claim against D which settled for 220,000. C, a former solicitor with his own legal services company, sought to recover his own costs at his standard hourly rate. He claimed that, considering his time spent and his hourly rate, but for the litigation, he would have earned 361,000. C produced evidence including his unaudited company accounts. The accounts showed a significant downturn during the litigation period. C alleged that this downturn was a direct result of time spent on his claim.

CPR 46.5(4) provides that: The amount of costs to be allowed to the litigant in person for any item of work claimed will be (a) where the litigant can prove financial loss, the amount that the litigant can prove to have been lost for time reasonably spent on doing the work; or (b) where the litigant cannot prove financial loss, an amount for the time reasonably spent on doing the work at the rate set out in Practice Direction 46.

PD 46.3.4 provides that: The amount, which may be allowed to a self-represented litigant under rule 45.39(5)(b) and rule 46.5(4)(b), is 19 per hour.

D argued that the C's evidence did not meet the required degree of specificity to depart from the prescribed 19 hourly rate as C had not identified specific instructions that he had turned down, or would have been working on, but for the litigation.

Decision

The Master considered the bar which C had to overcome to prove financial loss should not be impossibly high, nor disproportionate or expensive. The Master found C's unaudited company accounts persuasive and noted that the evidence showed C had always worked at full capacity and would have been able to do so, but for the litigation. The Master accepted C's evidence that most of his existing work, throughout the litigation, was charged at 150 per hour. Therefore the Court allowed C's costs at 150 per hour.

How is this reconciled with the decision in Joseph v Boyd and Hutchinson [2003] EWHC 413 (Ch)? In Joseph, a claimant litigant in person, also a qualified solicitor, had his hourly rate reduced from 120 to 50, based on the Law Society's notional salary for an Outer London Solicitor. The Master distinguished Joseph on the basis of claim's value and complexity, as well as the evidence available. The claim in Joseph was worth 12,000, whereas Spencer was a complex multi-track case which settled for 220,000. The Master also found the unaudited company accounts to be compelling.

Consumer and Trading Law

Consumer Protection Proposals

The Chancellor of the Exchequer, Phillip Hammond, issued a statement on consumer protection in his 2017 budget speech. There will be a green paper or consultation to examine markets that are not working efficiently or fairly.

However, before the green paper the government is seeking to undertake the following steps:

  • legislating at the earliest opportunity to allow consumer enforcement bodies, such as the Competition and Markets Authority, to ask the courts to order civil fines against companies that break consumer law;
  • developing proposals to protect consumers from facing unexpected payments when a subscription is renewed or when a free trial ends; and
  • considering how to make terms and conditions clearer, simpler and shorter for consumers to engage with, building on the call for evidence on terms and conditions last year.

Insolvency

Multiple Notices of Intention to Appoint Administrators may be an abuse of process

JCAM Commercial Real Estate Property XV Ltd v Davis Haulage Ltd [2017] EWCA Civ 267

Summary

It has become relatively common in the UK insolvency market for multiple notices of intention to appoint administrators to be filed giving a company extra breathing space (protected by an interim moratorium) to explore its options. This case makes it clear this is not a legitimate course of action; once a notice of intention to appoint administrators is filed an appointment should, in all but the most exceptional cases, take place.

The decision strengthens the hand of creditors whilst making the job of those tasked with rescuing companies more challenging. It may hasten the introduction of a standalone moratorium as previously proposed by both R3 and the Insolvency Service and covered in previous Newsflashes.

Facts

Davis Haulage Ltd (Company) was the tenant of a property and JCAM Commercial Real Estate Property (Appellant) the owner and landlord. On 18 January 2016 the Appellant notified the Company that it intended to commence an action to recover possession of the property as a result of outstanding rent. The Appellant gave the Company seven days in which to comply and then on 28 January 2016 issued possession proceedings.

However, six days earlier, on 22 January 2016, the sole director of the Company had filed a notice of intention to appoint an administrator, pursuant to which an interim moratorium arose expiring on 5 February 2016 (under paragraph 44 of Schedule B1). That moratorium effectively prevented the Appellant issuing the possession proceedings (and/or continuing with them) without the consent of the court. The filing of a notice of intention to appoint administrators in respect of the Company was repeated on three further occasions effectively giving the Company 40 business days protection from creditor action. During the third moratorium it was communicated that the Company was preparing a CVA proposal and during the fourth moratorium the CVA was approved.

The Appellant issued additional proceedings on 11 March 2016 seeking an order that the fourth notice be vacated and removed from the court file on the grounds that it constituted an abuse of process. The Appellant submitted the Company had no fixed or settled intention to appoint an administrator but, at most, had an intention to do so only if the CVA proposal was not approved by creditors.

Decision

The Judge at first instance found in the Company's favour and dismissed the Appellant's claim. However, the Court of Appeal overturned this decision, holding that a person giving notice of intention to appoint administrators must unconditionally propose or intend to appoint an administrator, rather than proposing or intending to do so only as one of two or more alternatives or only if a CVA proposal is not approved.

Intellectual Property

Nestl loses latest bid to trade mark KitKat shape

Socit des Produits Nestl SA -v- Cadbury UK Ltd [2017] EWCA Civ 358

Facts

Nestl applied to the UK Intellectual Property Office in 2010 to register the three-dimensional shape of its four finger KitKat as a UK trade mark. Cadbury opposed the application and the hearing officer held the KitKat shape was devoid of inherent distinctive character, except for in relation to cakes and pastries. Both Nestl and Cadbury appealed to the High Court, which sought a preliminary ruling from the Court of Justice of the European Union ("CJEU") as to acquired distinctiveness. After receiving guidance from the CJEU, the High Court subsequently dismissed the appeals, finding the hearing officer had not erred as a matter of law. In bringing this further appeal, Nestl relied upon evidence from consumers that, when presented with the three-dimensional shape, they identified it as a KitKat, and thus a product originating from a single source.

Decision

The Court of Appeal upheld the decision of the High Court, agreeing that the consumer survey evidence only demonstrated consumer recognition and association of the shape with a KitKat, but not a perception that the shape originated from a particular undertaking. The Court of Appeal noted that, where a shape has become very well-known, through the sale of products of that shape under a highly distinctive brand name, that does not necessarily mean that the public perceive that shape as a badge of origin to the extent that they would rely upon the shape alone to identify the product as coming from a specific source. The public may find that the three dimensional shape of a product brings to mind a familiar brand name, however, the Court held that mere recognition and association does not amount to distinctiveness.

The Court of Appeal also commented on Nestl's marketing of the four finger KitKat. In agreement with the hearing officer, the Court noted that the shape of the KitKat had not featured in Nestl's advertising of the product: the product was always sold in an opaque wrapper, and the shape of the chocolate bar had not been shown on the packaging. The Court then went on to add that the chocolate bar was also always embossed with the Kit Kat logo.

Comment

There is a high threshold required in order to establish acquired distinctiveness for three dimensional shapes and an even higher threshold when the shape mark is generally used in conjunction with another trade mark. It is interesting to note that the courts appear to be holding applicants of shape marks to a higher standard than is required under the statutory test for the registrability of a mark. The courts may also potentially be doing a disservice to the 'average consumer', holding them out to be entirely unsophisticated; here, one of the Court of Appeal judges stated that "[a] shape of this kind is not inherently such that members of the public are likely to take it as a badge of origin in the way they would a newly coined word or fancy name." By giving weight to the preconception that the average consumer will generally only rely on names and logos as indicators of origin, the court have further heightened the threshold test for registrability of 'non-traditional' trade marks, such as smells, sounds, and shapes despite their inclusion in the statute.

It has been reported in the press that Nestl are disappointed with the judgment and are considering next steps. If Nestl were to appeal to the Supreme Court, in the interim, it might be wise for Nestl to consider adjusting their marketing strategy of the four finger KitKat in order to address the concerns of the Court of Appeal judges. For example, they may consider marketing an un-embossed KitKat, which would disassociate the KitKat logo from the shape itself in order to promote the shape of the chocolate bar alone as a selling point. Alternatively, Nestl may consider putting these measures in place and making a fresh application to the UK Intellectual Property Office.