Claim No: IP-2021-000080 - [2024] EWHC 396 (IPEC)

The Claimants apply for a number of paragraphs (and related exhibits) of the Defendants’ trial witness statements to be excluded, asserting that they: amount to expert evidence and are thus inadmissible; and/or are without prejudice and thus inadmissible; and/or are inadmissible on other grounds; and/or are in any event irrelevant.

The Claimants’ starting position is that the Defendants’ evidence is ‘excessive’. Mr Reed relied on CPR 63.23(1) and paragraph 29 of PD 63. He submitted that permission for fact evidence in IPEC is granted only for evidence; relevant to specific and limited issues; which satisfies the costs benefit test; and which is otherwise admissible.

It is for the Claimants to establish that the evidence to which they object is inadmissible, save for material subject to the without prejudice rule. It is for the party seeking to rely on such evidence (in this instance the Defendants) to show that the evidence falls within an exception to that rule.

The Claimants submit that any inadmissible evidence should be excluded now, to reduce the time and costs required to prepare for trial and cross-examination and the time that will be required to deal with disputes about evidence during the trial.

The Defendants disagree with the Claimants’ substantive points on the evidence. Mr Harris also submitted that it would be preferable for issues of admissibility or irrelevance to be determined by the trial judge, with the trial judge considering whether or not to hear argument or give specific evidence any weight.

A hearing on evidence is required in this matter because of the dispute relating to the without prejudice rule. Some evidence which is said to fall within the without prejudice regime is also attacked on other grounds. As the judge dealing with the without prejudice issues must consider some of the evidence in any event, it is in accordance with the costs benefit test to deal with other substantive disputes about evidence at the same time as far as is sensible and proportionate.

A distinction can be drawn between evidence which is inadmissible irrespective of its relevance, and evidence which it is said should be excluded only because it is not sufficiently relevant. A dispute relating to the first type of evidence can usually be assessed by reference to general principles, while the second requires a more granular review of the specific issues to be resolved at trial. In IPEC this involves consideration of the pleadings and of the issues by reference to which evidence is to be adduced. Where objections relate to relevance, it may be more cost effective for the trial judge to deal with them. The trial judge will have greater familiarity with the issues that are important to resolving the dispute and the overall state of the evidence. In IPEC, as in this case, the trial judge may also have dealt with the CMC and thus have been directly involved in settling the list of issues.

It is clear that the parties disagree about the scope of the issues to be determined at trial. This underlies the dispute about the relevance of the material (including without prejudice material) on which the Defendants wish to rely.

The Claimants’ position is that the list of issues settled by the Judge following the CMC is determinative of the evidence which may be adduced. Anything that falls outside that envelope is said to be irrelevant. The Claimants have therefore applied to have significant portions of the evidence of Mr Land and Mr Gowland removed as it does not, in their view, relate to any issue in the list of issues.

The Defendants accepted the importance of the list of issues in IPEC proceedings but did not agree that evidence on a matter not explicitly referred to in that list was automatically irrelevant. Mr Harris submitted that the list of issues is not determinative of everything that might need to be resolved at trial. He relied on paragraph 4.6 of the IPEC Guide (October 2022 edition). That paragraph reads:

The Defendants disputed the Claimants’ characterisation of the scope of the list of issues (and the pleadings). The principal differences related to Issues 5 and 6.

Issue 5 reads:

Issue 6 reads: ‘Whether the use complained of impaired the origin or advertising functions of the First Claimant’s Marks (without prejudice as to which party has the burden of proof on this issue)’.

The principal dispute on Issue 5 was as to the meaning of the phrase ‘consultancy arrangement’ as used in the pleadings and in Issue 5. As I understood the parties’ positions, the Claimants take the view that Issue 5b) relates not only to the period during which the First Defendant was a party to an express consultancy agreement with the First Claimant, but also the period during which the First Defendant was employed by another company part of the same group and controlled by Mr Cadman. The Claimants also say that the important point is not who the engaging party was, but whether the work was carried out ‘for the benefit of the First Claimant’.

The Defendants say that the duration and nature of the obligations on the First Defendant and to whom those obligations were owed is a live issue. They say that Issue 5b) is not to be understood as explained by Mr Reed and that it would be inappropriate to limit the evidence by reference only to the phrasing used in the list of issues. The Defendants’ position is that the phrase ‘consultancy arrangement’, properly understood, refers only to the period of the Consultancy Agreement and not to any subsequent employment relationship between Mr Land and any other company. The Defendants also submitted that the words ‘for the benefit of the First Claimant’ do not have the meaning suggested by the Claimants.

The Defendants’ position during the hearing was that they had properly pleaded: (i) that the intellectual property said to have been developed in breach of clause 7.5 was developed after their respective consultancies had ended; (ii) that neither Defendant’s consultancy ended with the Settlement Agreement; (iii) in particular the First Defendant’s consultancy ended when his Consultancy Agreement with the First Claimant ended and he was then employed by the Second Claimant through an affiliate company; and (iv) that it was this agreement that was terminated by the Settlement Agreement.

Both parties addressed me on the sequence of events leading to the list of issues being annexed to the CMC order. They disagreed whether some aspects of the Defendants’ Re-Amended Defence and Counterclaim were consequential amendments for which permission had been given. The Defendants suggested after the hearing that further submissions might be required on this topic and particularly the scope of Issue 5b).

I agree with Mr Harris that the list of issues is not intended to operate as a straitjacket for the parties or the trial judge.

Clause 7.5 of the Settlement Agreement will need to be construed at trial. The wording of Issue 5b) reflects language used by both parties in their pleadings. The potential for dispute over the implications of the parties’ pleaded positions is not unforeseen. The existence of a ‘consultancy arrangement and employment’ is pleaded at paragraph 12 of the original Defence and Counterclaim. The evidence contains references to Mr Land’s employment, over and above those which are challenged by the Claimants. It will be for the trial judge to decide whether the Defendants’ pleading is sufficient to bear the weight they seek to place on it, or whether, for example, relevant admissions have been made. It will be for the trial judge then to construe Clause 7.5 of the Settlement Agreement.

If excluding evidence on relevance grounds requires substantive interpretation of the pleadings which might effectively determine a contested issue it is not appropriate to do so after an interim hearing of this nature unless the position is very clear.

Having read the parties’ submissions and after oral argument, including as to the evolution of the pleadings, I conclude that the construction of Issue 5 is not sufficiently clear to grant the Claimants’ application. Evidence said by the Defendants to go to Issue 5 and within the parties’ pleaded cases will not be excluded on grounds of irrelevance, although it may be inadmissible or excluded on other grounds.

Issue 6 is the only trademark matter that appears in the list of issues. It is limited to the origin or advertising function of the mark. No other potentially relevant trademark issues are referred to in the list of issues, despite appearing in the pleadings.

Mr Reed submitted that the material from Mr Land’s evidence (paragraphs 96 and 97) which the Defendants say is relevant to the trademark dispute does not go to the origin or advertising function of the mark as it relates to comments made by Mr Cadman in private correspondence. Mr Reed made the same submission in respect of paragraph 45 of Mr Gowland’s evidence.

Paragraphs 96 and 97 of Mr Land’s evidence were also said by Mr Pountney in evidence to be relevant to Issue 2 (patent validity). Mr Reed submitted that this was surprising given the limited scope of Issue 2. Mr Harris did not substantively address this matter in oral submissions although he did extensively quote from the pleadings in his written skeleton.

The limitation of Issue 6 to the origin or advertising function of the mark is clear. I will exclude evidence included only to address other aspects of the trademark dispute, even if covered by the pleadings. Such matters are not reasonably to be regarded as falling within one or more of the listed issues to be dealt with at trial or in respect of which evidence is required.

The Claimants object to aspects of the Defendants’ evidence which are said to criticise Mr Cadman and to be irrelevant to the issues to be tried.

The Defendants’ position is that the evidence objected to is part of Mr Land’s narrative, provides a full and coherent account of events or is relevant background, and that evidence as to the character and conduct of Mr Cadman is in any event both relevant and admissible.

Mr Reed submitted that the character and credibility of individual witnesses was not an issue for trial and should not be in issue in factual witness evidence. He further submitted that describing such material as part of a full and coherent narrative was merely an attempt to obscure its real effect.

Mr Harris dealt only briefly with this issue in his skeleton argument. It was his view that, as with all other matters relating to relevance and admissibility, such considerations were a matter for the trial judge.

I agree with the Claimants’ primary position in principle. If evidence is irrelevant and will not assist in resolving the issues, that evidence should not have been served and is liable to be excluded. However, this will often be more suited for adjudication by the trial judge. In this case, most of the disputes about relevance fall within that category. To decide otherwise would be to encourage the proliferation of time consuming, inefficient and costly satellite disputes. The trial judge will be best placed to deal with such disputes and to give such evidence whatever weight is appropriate at trial. If the trial judge concludes that a party has served irrelevant and unnecessary evidence the judge will be able to reflect that in costs, whether within the overall costs cap or, exceptionally, above it. While I accept that such evidence may cause the other party to expend time and effort, it is open to that party to choose how to deal with material which it regards as wholly irrelevant.

Nevertheless, evidence which is prejudicial in nature and not directly linked to an issue to be resolved may in some circumstances sensibly be reviewed before trial, for example as part of a wider hearing, as here. However, the basis for objection must be clear. Comments about other parties which may cause upset are not uncommon in witness evidence, and discomfort is not a sufficient ground for seeking to exclude evidence. A party seeking exclusion should be clear about the reasons for objecting, explain why the passage is considered truly prejudicial, and why it is not of assistance. It is not helpful to say something general along the lines of ‘I believe that these passages are all inadmissible and irrelevant as well as being prejudicial’.

In the light of the above, having reviewed the material which the Claimants say is prejudicial and unjustified, and considered the evidence in the round, including in the light of Mr Pountney’s explanations, I conclude that the following passages should be removed from Mr Land’s witness statement: paragraph 23, other than the first sentence; the last three sentences of paragraph 45; the last sentence of paragraph 48; paragraph 50; and paragraph 94(f). I also conclude that the following passages should be removed from Mr Gowland’s witness statement: the final sentence of paragraph 23; the second sentence of paragraph 25; the second half of the final sentence in paragraph 26, starting after the dash.

The Claimants have applied for permission to serve evidence in reply on the basis that it is prejudicial and that the Claimants are entitled to respond. Granting permission would serve no purpose other than to expand the dispute and generate further costs. It does not satisfy the costs benefit test. The Claimants’ conditional application, to the extent it is maintained, is dismissed.