A&O and McDermott to reveal costs before trial

High Court judge has ordered Allen & Overy and McDermott Will & Emery to estimate their costs before an intellectual property (IP) trial, showing judicial unease over the cost of UK litigation.


A&O and McDermott to reveal costs before trialA High Court judge has ordered Allen & Overy (A&O) and McDermott Will & Emery to estimate their costs before an intellectual property (IP) trial, showing judicial unease over the cost of UK litigation.

The firms will have to disclose how much they intend to bill clients Blackberry maker Research in Motion (RIM) and tech company Visto on an upcoming High Court dispute.

The dispute is related to a similar case which hit the courts earlier this year, where A&O had racked up £6m of fees for RIM compared to Taylor Wessing’s £1m bill for Visto (TheLawyer.com, 18 April).

In a costs judgment, Mr. Justice Arnold cited Mr Justice Floyd’s damning judgment on A&O’s £6m fees in the previous dispute.

He said: “As Floyd J observed, and I agree, that was a quite staggering disparity. As he also observed, and again I agree, it is astonishing that a sum of the order of £6 million can have been spent by RIM in fighting those proceedings.”

Arnold J ordered both parties to disclose their present and future estimated costs in the present case.

He added that A&O’s costs in the previous cases were a “graphic illustration” that the traditional approach to costs control of litigation was “inadequate and unsatisfactory”.

A&O and RIM claimed that they had taken due note of the comments made in Floyd J’s previous costs order and would be proceeding accordingly.

A&O released a statement saying: “We can confirm that we have been instructed by RIM on another dispute with Visto. This is a further attempt by Visto to interfere with RIM’s business in the UK on the basis of three patents which are variants on the one Mr Justice Floyd found to be invalid earlier this year. We will seek to re-use as much of the work product from the earlier proceedings as possible in this new dispute.”

“Mr Justice Arnold recognised the commercial importance of this case and the nature of the threat to RIM and ordered the trial to be fixed in September 2009. Mr Justice Arnold also ordered each side to produce estimates for the costs they will incur up to and including trial. As Mr Justice Arnold indicated, this is the sort of information that would be provided automatically in other litigation.”

In the previous case RIM said it would carry out a post-mortem to analyse what could be improved in future cases (The Lawyer, 21 April), although it had instructed A&O to leave “no stone unturned” in preparing for the litigation. A&O did win the case against Visto for its client.

McDermott Will & Emery IP partner Gary Moss represented Visto in the previous case as well as in the current dispute, having since moved from Taylor Wessing (The Lawyer, 4 September).

He said that in patents disputes it was unusual for cost estimates to be disclosed before the trial. He explained: “Although the judge expresses himself in general terms, what happened previously must have decided this case. You can tell from his judgement had there not been the high costs the first time around, we might not have had this order the second time around.”

Arnold J refused to rule at this stage on whether a capping order would be appropriate in this case.

Antony Watson QC and Thomas Hinchliffe of Three New Square are instructed by A&O. A&O’s team is led by IP partner Nicola Dagg.

Adrian Speck of 8 New Square is instructed by Visto.

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