IPEC cost recovery increases to £60,000

In the recently published post Waterfront Law – The IPEC Guide, we highlighted the “costs cap” as a feature of IPEC that is of real benefit to litigants.

This is because a party can be confident that, should it lose in IPEC on liability (i.e. usually the decision on whether there has been infringement), there is a maximum amount it will usually be ordered to pay towards the other side’s legal costs.  That amount is currently £50,000.

On 1 October 2022, the costs cap will increase to £60,000.[1]

In IPEC, the overall costs cap is broken down by stages of the litigation.  There is a limit on how much a winning party can recover in respect of the amount spent on specific stages of the litigation (e.g. drafting its Defence).

These limits will also increase on 1 October 2022 as set out below:[2]

As a final point, the courts have held that where a Claimant obtains a result in litigation that at least equals a “Part 36” settlement offer it has made to the Defendant(s), the costs cap regime technically falls away, but that in practice the court will usually proceed as if a 25% uplift has been applied to both the overall costs cap and each of the stage caps detailed above.[3]  Therefore, in those very specific circumstances, from 1 October 2022 a winning Claimant could recover costs of up to £75,000.

[1] Civil Procedure (Amendment No 2) Rules 2022 (SI 2022/783)

[2] 149th Practice Direction Update

[3] Martin & Anor v Kogan & Ors [2017] EWHC 3266 (IPEC)