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COSTS — Discretion of court — Expert services performed by employees —
Claimant's employees investigating, formulating and prosecuting proceedings for
breach of confidence — Whether costs of employee's work recoverable Admiral
Management Services Ltd v Para-Protect Europe Ltd and others Ch D: Stanley
Burnton J: 4 March 2002
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It was neither unjust nor unfair to permit a party to recover a reasonable sum
in respect of expert services performed by its employees which, if done by
someone who was not an employee, would have been recoverable as an item of
costs. Stanley Burnton J so held in the Chancery Division, giving judgment for
the claimant, Admiral Management Services Ltd, on a preliminary issue to
determine, inter alia, whether certain sums claimed by the claimant for work
done by its employees in investigating, formulating and prosecuting proceedings
against the first defendant, Para-Protect Europe Ltd, constituted recoverable
costs. In those proceedings the claimant had obtained, inter alia, an order for
the imaging (copying) of the hard discs of computers on the first defendant's
premises and the copying of other electronic storage media which the claimant
alleged contained confidential information belonging to it. Some of the
claimant's employees had carried out work investigating and obtaining evidence
of the alleged torts committed by the defendants, including the imaging of the
hard discs in accordance with that order. The claimant contended that those
employees were experts and the work qualified as "expert work". STANLEY BURNTON
J, in a reserved judgment, said that in general the work of a party's employees
in investigating, formulating and prosecuting a claim by legal proceedings did
not qualify for an order for the payment of the costs of and incidental to those
proceedings. However, In re Nossen's Letter Patent [1969] 1 WLR 638 provided an
exception to that general rule where the reasonable costs incurred by a party's
own staff could be recoverable. That principle was not limited to actions for
patent infringement and was applicable to all litigation involving claims of
wrongful use of intellectual property, and there was no reason why a different
principle in regard to the recoverability of costs should apply to intellectual
property tort claims as against other claims. In the instant case the reasonable
costs of the claimant's expert employees in investigating, formulating and
presenting the claims against the defendants from the time that the claimant
formed its suspicion of the wrongdoing which was the subject of the claims could
qualify for a costs order. Such reasonable costs would not include any element
of overhead recovery or of profit. The question whether the work of the
claimant's employees qualified for inclusion in such a costs order depended on
whether the employees were truly experts and on the nature of the work carried
out. Those issues were to be decided at a further hearing.
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Appearances: Alistair McGregor QC and Nigel Porter (Boyes Turner) for the
claimant; Harvey McGregor QC and Gerard Clarke (Field Fisher Waterhouse) for the
defendants.
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Reported by: Susanne Rook, barrister. 