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In England & Wales, litigation is on the brink of change with the implementation of the Legal Aid, Sentencing and Punishment of Offenders (‘LASPO’) Act, on 1st April 2013. But what does this mean for IP litigation?

THE CHANGES COMING INTO PLAY THROUGH LASPO

Currently, After the Event (‘ATE’) insurance premiums and Conditional Fee Agreement (‘CFA’) success fees are a recoverable cost under s.29 of the Access to Justice Act 1999.

However, the LASPO Act, amongst other things, abolishes this recoverability of ATE insurance premiums and CFA success fees, for most areas of law. The effect of LASPO however will not be retrospective; in other words, clients will remain able to seek to recover premiums applying to policies entered into before implementation.

Click here for a refresher on ATE insurance and what it can cover.

HOW WILL THE ABOLITION OF PREMIUM RECOVERABILITY AFFECT IP DISPUTES?

In many areas of law, recoverability of ATE insurance premiums is a key element of the client’s puchasing decision. However, our experience with IP litigation is that recoverability is often seen as ‘neither here nor there’.

Often, IP litigation will be pursued or defended with a view to achieving a settlement; if a global settlement is reached, the premium is payable from the overall pot of monies recovered (along with other costs), rather than being separately recovered from the other side. Most insurers will discount the premium due in the event of an early settlement – sometimes by as much as 80%. Therefore, clients embarking on IP litigation (and indeed many other forms of commercial litigation) seek to obtain insurance with a view to paying the premium from the pot – or from their own pocket – if the case settles.

Even when the relief sought is non-monetary (the obvious example being a client looking to defend an infringement claim and make a validity counter-claim), huge commercial benefits attach to succeeding in the litigation, albeit the client doesn’t necessarily stand to make money from the case itself per se. In those situations, most clients are willing to pay a premium in the event of success, in return for a hedge on their potential downside.

Furthermore, many IP clients are accustomed to irrecoverable forums, as more and more are now litigating in the Patents County Court (‘PCC’). We regularly secure insurance and funding for cases being held in the PCC, as clients wish to reduce their risk even further than that acheived by the £50,000 cap on recoverable adverse costs.

If you or a client is in need of litigation funding in respect of intellectual property litigation, please contact us for more information.