Members of the Chancery Bar Association have just received the following statement from the Chancellor:
“The judges of the Chancery Division are concerned at the increasing number of applications in which the advocates involved and their instructing solicitors have failed to observe the provisions of paragraphs 5.11 to 5.14 (both inclusive) and 5.24 of the Chancery Guide 2009 Edition. Commonly the result is to cause delays in hearing other applications and/or wasted costs. The judges have decided that they must consider the imposition of sanctions in the event of any future failures.
Accordingly, in any case in which the judge considers that the provisions of those paragraphs have not been properly observed he/she will require an explanation from the advocates/solicitors concerned. In addition the judge will consider whether (1) immediately to adjourn the hearing to be continued as an application by order on another day before another judge; and/or (2) to report the advocates/solicitors concerned to their disciplinary authority; and/or (3) to report the circumstances to the Chancellor (via his clerk) so that in the event of any similar conduct of an application before another judge the Chancellor may consider reporting the advocates/solicitors concerned to their disciplinary authority; and/or (4) disallowing the recovery of any wasted costs; and/or (5) making a wasted costs order against the advocates/solicitors concerned.
The judges hope that this timely warning will ensure the proper observance of those paragraphs of the Chancery Guide without the necessity to impose any of the above sanctions.”
Those paragraphs of the Chancery Guide are about time estimates. Paragraphs 5.11 to 5.14 concern all applications while paragraph 5.24 is concerned with time estimates for applications without notice. The applications that this statement covers are applications to judges in open court which were known as motions before the Civil Procedure Rules came into force. Such applications are for relief that only a judge can grant such as injunctions or committal for contempt of court. All other applications should be made to a master in the Royal Courts of Justice or to a district judge elsewhere.
The Rules of the Supreme Court used to draw an important distinction between motions and applications to a judge in chambers known as summonses. Then as now the hearing of an application in chambers had to be booked, usually days and sometimes weeks or months in advance. By contrast, a judge could be moved more or less any day so long as two clear days notice was given to the other side and the court. A clear day was a working day during the law term not counting the day of service or the day of the hearing. Thus notice of a motion on Thursday could be given at any time up to 16:00 on a Monday. Even that notice could be dispensed with in very urgent cases or where notice would give the other side an opportunity to do something naughty such as hiding or destroying evidence or removing assets from the jurisdiction. The second big difference was that notices of motion did not have to be accompanied by evidence (then in the form of written statements sworn before solicitors known as affidavits) whereas summonses did. Finally, it was unusual for the party that succeeded on motion to be awarded his or her costs at the end of the hearing. The usual orders were for the plaintiff’s or the defendant’s costs in the cause or costs reserved which meant that nobody would have to pay anything until the end of the litigation and that could be years away. As often as not the action would be compromised with each party paying its own as part of the settlement. The unlikelihood of an immediate order for costs removed a great deal of the risk of making interim injunction applications. Motions were a feature of Chancery litigation. Interim injunction applications in the other Divisions or in the County Courts were usually made in chambers. Because the relief that intellectual property owners most urgently require is an immediate stop to an infringement, the speed, convenience, relative inexpensiveness and low risk of an application on motion provided an excellent remedy.
Although the formal distinction between motions and summonses was abolished by the CPR the practical distinction survives. Chancery judges continue to hear applications in open court in London and a number of provincial cities on applications days though there are far fewer of those applications than there were before Lord Woolf’s so-called reforms, The reason for that is obvious. It is a lot more expensive to go to court nowadays than it once was and it is particularly expensive and risky to apply for an interim injunction. First, court fees have sky rocketed. Secondly, a great deal more work now has to be done in the early stages. In most cases, the Practice Direction – Pre-action Conduct and the Code of Practice for pre-action conduct in intellectual property disputes have to be complied with. A statement of case is expected with the claim form and an application notice has to be supported by witness statements containing the evidence in chief. Finally, parties now face the very real prospect of paying many thousands of pounds at very short notice if they are unsuccessful in bringing or resisting the application.
Of all the tribunals I have appeared before in my 34 years at the Bar the Chancellor, Sir Andrew Morritt, is easily the nicest. When he was Vice-Chancellor of the County Palatine of Lancaster and I got to know him well. He is not in the least tetchy. He has a great sense of humour and considerable humanity. I remember teasing him in Newcastle by opening the mention of a compromise with the words “I regret to tell my Lord” his face dropped “that my learned friend and I have deprived your lordship of the opportunity of deciding a most interesting case”. Resuming his beam he replied “I’m sure we can live with that.” So when he threatens eye-watering sanctions for failure to comply with the Chancery Guide one can be sure that he had good reason.
Paragraphs 5.11 to 5.14 and 5.24 of the Chancery Guide contain nothing new. There has always been a 2-hour limit to what can be done on motion day. Ever since I was a pupil it has been the duty of the applicant’s counsel to tell the judge whether his case is likely to be effective or ineffective and, if effective, to give an estimate of the time required for the hearing. The only thing that has changed over the years is that it is now necessary to begin a skeleton with an estimate of the time required for pre-reading and an estimate of the time required in court (including time for judgment) (paragraph 5.13). Two hours is not a lot of time in the rough and tumble of the court room. Unless the parties have come to terms the only things that an applications judge can usefully do in that time are
- stand over the application for hearing on another day as an application by order,
- give directions for the exchange of evidence and
- consider whether to order an injunction over the hearing of the application or accept an offer to pay royalties into escrow (a Brupat order).
If counsel and their instructing solicitors do not know these things it must be through lack of experience.
So here are some tips on how to move a motion from an old pro.
- If you are for the claimant ask yourself whether your client really needs an interim injunction. Court lists are much less cluttered than they used to be. The interval between the issue of a claim form and trial is not much longer than that between the issue of an application notice and the hearing of an application by order. A contested application can double the cost of the litigation and there is a risk that your client may have to pay a whole shed full of costs at very sort notice if the application fails for any reason. Is the interim relief really worth the risk and expense?
- Similarly, if you are for the defendant, ask yourself whether your client can’t give some sort of undertaking if only to keep full and accurate records or make a payment into escrow.
- Prepare your skeleton and your witness statements well. Before you put pen to paper or nowadays finger to keyboard read and inwardly digest Appendices 6 to 9 to the Chancery Guide. Make sure you and your solicitors comply strictly with those guidelines. Most applications are won and lost before the parties come anywhere near a court. That is because the judge forms a preliminary view on the papers from which it is very hard to shift him. Make sure that you don’t give him too much to read but that everything you do give him is relevant. It is very tempting to stress the merits of your case. Keep that for trial. All he needs to know about the merits at this stage is whether or not you could win. Concentrate on the main points that he has to consider such as whether your client will suffer irreparable loss if he decides against you, whether the other side’s loss is less than your client’s and can easily be quantified and whether your client can compensate the other side in damages. Get that evidence to the other side as quickly as possible. If you’ve done your job well you should make them think whether they really want to fight you.
- If you can’t settle the whole dispute see what you can settle. If you can agree terms till trial then so much the better. If not, at least try to agree terms for a stand-over till the hearing of the applications by order such as a timetable for the exchange of evidence and any undertakings that have to be given up to the hearing of the application. If you can do any of those things you can save at least some costs.
- Any agreement that is reached before the date of the hearing must be communicated to the court in good time. Ideally, that should be in the form of a minute of order signed by all the parties. It may be necessary for your clerk, solicitor or other representative to attend the listing officer with the signed minute the day before the hearing. If you are a litigant in person the court will probably ask you to attend the listing officer so that he or she can make sure that you understand what you have signed up to.
- If you have to attend the interim applications day get to court in good time and seek out your opponent. See whether you can agree a minute of order that can be mentioned to the judge even at this late stage. If you are still in negotiation when you are called into court you can always ask the judge for more time.
- At 10:30 or whenever the sitting begins the judge will read a roll call. All he or she wants to know at this stage is whether you have agreed anything and how long it will take to dispose of your application. If you have reached complete agreement your application is ineffective and you should be able to mention the terms of your minute within a few minutes. The correct response is “ineffective, my Lord (or Lady) 2 minutes”. If you can do that you will be rewarded with an early release so that you can be out of the court before 11:00. If you have not yet reached agreement your application is effective and the correct response is “effective, my Lord, 30 minutes” or however long you need. If you are still negotiating and the discussions are likely to bear fruit you can also mention that. But that should not take more than 30 seconds. If you can’t agree anything and there is likely to be a scrap over the terms of the stand-over you should allow yourself at least an hour for argument. The problem with that is that the judge will hear you last unless you or your opponent are able to come to terms in the meantime.
- The usual point of disagreement is whether the judge should grant an injunction over the hearing of the application by order. Think long and hard about whether you really need to fight this battle. The judge will not be best pleased if he or she thinks you or your client are silly, Although he or she will probably reserve the question of costs to the hearing of the application by order he or she can always make another order if he or she thinks you are being unreasonable. If you do have to fight the point concentrate on the question of who is going to suffer most from the grant or denial of an interim injunction over the hearing of the application. This is not a dry run for the application by order still less is it the first round of the trial.
- If the application is stood over make sure that you comply with the timetable. If you need more time to prepare your evidence the court will probably grant it to you without a hearing provided you have good reason and ask for it in good time.
- Try to agree bundles with the other side and lodge them with the court in good time. Make sure that each page is legible and that the bundle is indexed, paginated and properly bound.
- Make sure your skeleton complies with Appendix 7 of the Chancery Guide, that it is lodged in good time, that your statement of costs makes sense and is exchanged in good time.
- Attend court at least 20 minutes before the hearing of the application by order in case there are last minute instructions or negotiations and try to enjoy yourself. It’s usually good fun for the advocates if not the poor blighter who has to pay for it all at the end of the day.
My chambers have a special website on inunctions at http://www.nipc-injunctions.co.uk/ which needs a little updating. If you or your client have any questions on this matter you can contact us through our request an estimate or contact form or you can call us on 0800 862 0055.