Azzurri Communications Ltd vs International Telecommunications Equipment Ltd

25 Feb 2025Court Report

Court clarifies cost caps in a contract and trade mark dispute involving telecommunications companies

Azzurri Communications Ltd vs International Telecommunications Equipment Ltd – Patents County Court – [2013] EWPCC 22 – Case Summary

In an important ruling on 16th April 2013, the Patents County Court addressed the application of cost caps in a case involving Azzurri Communications Limited and International Telecommunications Equipment Limited, trading as SOS Communications. The case, presided over by His Honour Judge Birss QC, centred on a contract claim that also raised issues of trade mark law.

The proceedings initially began in the High Court but were subsequently transferred to the Patents County Court (PCC). The primary relief sought by Azzurri Communications was damages, and the trial was set to address both the breach of contract by SOS Communications and the assessment of damages.

Following the main judgment handed down on 28th March 2013, Judge Birss QC awarded Azzurri Communications 80% of its costs. The costs were to be summarily assessed, with a significant point of contention being the application of the cost caps under the PCC's special costs regime.

The claimant, represented by Geoffrey Pritchard, argued that they were entitled to recover costs capped at £50,000 for liability and an additional £25,000 for the inquiry into damages, based on the trial covering both aspects. They apportioned costs between the two tables of scale costs provided in the Costs Practice Direction.

However, the defendant, represented by Douglas Campbell, contended that the rules envisaged separate proceedings for liability and damages, and only one cap should apply since the case was conducted as a single proceeding.

Judge Birss QC agreed with the defendant's argument, ruling that the correct interpretation of the rules did not allow for the aggregation of two cost caps. He stated that the trial was a single proceeding with one set of statements, one case management conference, and one trial, thus warranting a single cap applicable to a trial on liability, capped at £50,000.

The judgment clarified that assessing damages at the same trial as liability did not justify applying both cost caps, which would otherwise lead to an inflated overall cap of £75,000. Judge Birss QC emphasized that if the claimant desired separate proceedings, it should have been raised during the case management conference.

This decision provides clarity on the application of cost caps in the PCC, particularly in cases where liability and damages are assessed in a single trial. It underscores the importance of addressing procedural matters early in the litigation process to avoid misunderstandings regarding cost recovery.