Case No. CC-12-P-01174

39.I have also been asked to give a judgment on costs. I will do so on what seems to me to be the certain basis that the sum due to Abbott in the account is either nil or a very small amount. 40.On the findings above, Design & Display is to be treated as the successful party and is entitled to its costs. 41.In the normal course, the costs in this court are capped. Design & Display made several offers of settlement, all of which are said to have been Part 36 Offers or to have had the consequences of a Part 36 Offer. The status of the offers was disputed by Abbott. But there is no doubt that whether or not they complied with Part 36, the offers were not beaten by Abbott. 42.The main point I have been asked to resolve is whether my overall discretion as to costs should be exercised to lift the costs caps. Design & Display relied by analogy on PPL v Hagan [2016] EWHC 3076 (IPEC) and referred to the judgment of Judge Birss in Henderson v All Around The World [2013] EWPCC 19. 43.Abbott argued that if I were to decide that Design & Display should make no payment in the account, I should make no order as to costs excluding the appeal. Two reasons were given. First, the Island Records disclosure given by Design & Display was very inconsistent and highly inaccurate, at least to begin with. In a witness statement from Mr Lloyd dated 2 September 2013 it was said that Design & Display had made a net profit of £105,893.83 from the sale of infringing inserts alone. This did not include any part of the profit from slatted panels. On the strength of that, Abbott elected to pursue an account of profits. 44.On the day before the case management conference in the account, Design & Display served a second witness statement from Mr Lloyd dated 21 February 2014. Mr Lloyd said that he had made mistakes in his previous witness statement and suggested that Design & Display had made a profit of only £11,000 even though he now included a sum for profits from the slatted panel. 45.In a third witness statement dated 31 March 2014 Mr Lloyd revised this to a loss of over £20,000. 46.Abbott’s second reason was that Design & Display had purported to welcome the idea of mediation but in practice had failed to respond to Abbott’s invitations to pursue it. This is disputed by Design & Display and I do not believe that I can reach a concluded view about who was responsible for what. 47.With regard to Design & Display’s offers and Mr Lloyd’s changeable evidence, it seems to me that they raise two important and related considerations of policy. The first is the one behind Part 36 and indeed all offers, namely that parties should be encouraged both to make realistic offers and to respond realistically when an offer is made to them. This promotes settlement, the saving of costs and it decreases the use of court time. 48.The second policy consideration is that if an account of profits is to be conducted in an orderly and cost-effective manner, it is essential that the evidence from the defendant is prepared with appropriate care. An estimate of profits from an infringing business given pursuant to an Island Records order will not be exact, but there was no good excuse for what Design & Display now concedes to have been wildly inaccurate evidence from Mr Lloyd. I have no real doubt that had Mr Lloyd’s first witness statement advanced the assertion that Design & Display had made a loss, Abbott would have elected for an inquiry as to damages. It is a matter of speculation what would then have happened, but given Design & Display’s willingness to make offers, there is a fair possibility that the inquiry would have settled. On any view, I think that Abbott has a good claim to its costs up to reasonable period after service of Mr Lloyd’s second witness statement. 49.Thereafter Abbott could have changed its election to an inquiry and sought an order for costs thrown away. However I can see why it chose not to, bearing in mind that Design & Display’s evidence seemed very unreliable and therefore vulnerable to challenge and because there was no certainty that the court would make a favourable award of costs. 50.In short, I take the view that Design & Display’s failure to take the trouble to serve accurate evidence probably led to significant wasted expenditure by Abbott and possibly an unnecessary hearing of the account. Design & Display protests that this was not done deliberately, but I do not believe that the consequences of badly prepared evidence can be just waived away. 51.I have reached the view that Design & Display is entitled to its costs but that I should not lift the costs caps. Abbott must pay Design & Display’s costs subject to the usual caps applicable in this court.