IPEC small claims costs warning: Pablo Star Media Ltd v Richard Bowen

A recent judgment in the Intellectual Property Enterprise Court (IPEC), in an infringement case concerning a photograph of Dylan Thomas used without permission for 17 days on a holiday cottages website, underlines the need for caution when it comes to costs in small claims.

Normally the winning party’s costs are not ordered to be paid by the losing party in the small claims track, with limited exceptions. Bringing a claim is therefore relatively risk free because a claimant doesn’t stand to pay a defendant’s lawyers’ costs if the defendant instructs lawyers and successfully defends the claim.

That, however, is only the basic rule. There is an important exception where the court considers that a party has behaved unreasonably. In this case the claimant, despite succeeding in its copyright infringement claim and being awarded damages of £250 plus £3 interest, was ordered to pay the unsuccessful defendant’s travelling costs of £164.10.

The judge was influenced by a number of factors including:

  1. The defendant made an offer to pay £250 within days of the complaint having been raised.
  2. The claimant had sent an email to the defendant referring to possible additional proceedings in the US, which His Honour Judge Hacon found was intended to put pressure on the defendant.

The email in question included this: “You talk about the US Library of Congress Copyright Register as being irrelevant. However in the U.S. your infringement would be deemed ‘wilful’ and statutory damages of up to $150,000 can be awarded plus costs. We have not gone there at present but could. I will save you the legal explanation for not but it is real.”

It is often tempting for claimants to overegg their claim letters, threatening defendants with an assortment of dire consequences in addition to infringement proceedings. References to criminal proceedings are common for example or, in this case, overseas litigation. Our advice would be to stick to threatening action which is proportionate to the claim in question. If the court thinks you have attempted to pressurise a party with limited financial resources into an unfair settlement, you may be penalised by a costs order against you.

The lesson for users of other people’s photographs is also clear. However minor you think an infringement may be, always be careful to get any necessary permissions. It is much easier to pay a small licence fee in advance, or use another image, than defend yourself against a copyright owner who may cause you serious headaches by pursuing litigation which could be difficult to settle.

Bulletins are for general guidance only. Legal advice should be sought before taking action in relation to specific matters. Where reference is made to Court decisions facts referred to are those reported as found by the Court. Please note that past bulletins included in the Archive have not been updated by any subsequent changes in statute or case law.