HMRC no longer reviewing Family Investment Companies
On 1 October 2011, The Patents County Court (Financial Limits) (No 2) Order 2011 (SI2011/2222) came into force, introducing a £500,000 limit on the value of intellectual property (IP) right claims heard in the Patents County Court (PCC) for claims other than those relating to patents and designs.
Borne out of a post-Jackson consultation, as part of a series of amendments, the reforms are intended to reduce the cost of lower value IP litigation and therefore restore the function of the PCC to that for which it was originally conceived.
Prior to this recent reform, it was reported that the PCC was failing in its remit to serve the interests of small and medium-sized enterprises and entrepreneurs in providing an affordable forum in which to protect and enforce their IP rights.
Clearly differentiating the PCC from the High Court, the £500,000 limit on the financial remedies in the PCC obviates the need for protracted and costly transfer considerations. In addition, the provision remains for claimants to opt to abandon excess claims above the limit and PCC jurisdiction can still be agreed between the parties.
Procedural and practical considerations
“Front load” your case: invest in the pleadings and make your pre-action compliance explicit.
There is no standard disclosure or automatic entitlement to adduce witness statements, experts, cross examination or skeleton arguments. This is all decided at the Case Management Conference on a cost benefit analysis: a strong argument for having a watertight statement of case.
Applications will usually be determined without a hearing unless it is strictly necessary and even then, a hearing can be by video-link or telephone.
Crucially, for claims of up to the £500,000 value limit, costs recovered are capped at £50,000 but reviewed on a stage-by-stage basis and so when planning for litigation, practitioners should bear in mind that at the same time as “front loading”, this cap emphasises the need for efficiency of preparation at every stage pre-trial that is, anticipating as far as possible, and thereby reducing, the work required at trial; maximising cost recovery.
Transitional provisions dictate that the old rules will apply to proceedings commenced pre-1 October 2010 and the new rules will apply those issued in the High Court and PCC after this date. Where a case began in the High Court pre-1 October 2010 and was transferred to the PCC after this date, it is likely that the new rules will apply but as yet, there is no firm decision on this.
Future changes: A consultation is underway in relation to a name change for the PCC in order to reflect its jurisdiction as the Intellectual Property County Court.
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