Can arguing "Bad Habits" in litigation lead to a judge lessening a successful party's costs order? Another lesson from the 'Ed Sheeran case'...

Can arguing "Bad Habits" in litigation lead to a judge lessening a successful party's costs order? Another lesson from the 'Ed Sheeran case'...

Out of tune?

In the recent judgment in Sheeran & Ors v Chokri & Ors [2022] EWHC 1528 (Ch), Mr Justice Zacaroli rejected the defendants’ argument that the claimants’ conduct during the case should prevent all, if not some, of their costs from being recovered.

The facts

Back in April of this year, the claimants, including Mr Sheeran, won their copyright infringement case, successfully obtaining a declaration that their 2019 hit “Shape of You” had not infringed on the defendants’ song, “Oh Why”. The defendants’ counterclaim for copyright infringement was also dismissed. Our previous article on the case commented on an application regarding disclosure, which highlighted the importance of engaging with the disclosure process.

Since judgment was handed down, the case has moved onto resolving the matter of costs.

The defendants argued that Mr Sheeran and the claimants should pay their own legal costs on the basis that they had demonstrated “awkwardness and opacity” by:

  1. failing to engage in pre-action correspondence
  2. failing to provide disclosure of documents (such as voice notes and project files) relating to how Shape of You” had been written
  3. failing to provide an adequate response to their own failings in disclosure

As a result, the defendants claimed that the claimants should not be able to recover their costs, or at least have them substantially reduced, even though the claimants had won and the usual rule is that the losers pays the winner’s costs.

Judgment

The judge rejected the defendants’ arguments, finding that “the matters relied on by the defendants do not justify departing from the general rule that the losing party pays the successful party’s costs” (paragraph 14).

Responding to the specific allegations made by the defendant, Mr Justice Zacaroli found that:

  1. There was no failure by the claimants to comply with the Pre-Action Protocol. When the infringement counterclaim was first asserted, the claimants had “immediately” responded to the defendants’ solicitors denying it. Later, when presented with a musicologists’ report by the defendants, the claimants had responded with two expert’s reports of their own, one of which directly responded to the defendants’ expert’s report. The judge found that the claimants had “done as much, if not more” (paragraph 11).
     
  2. The claimants had not failed to disclose “key documents relevant to the issues in dispute” in pre-action correspondence, including voice memos, project files or recordings of a writing session for “Shape of You” in 2016. The judge held that he did “not accept that there was any obligation on the claimants to go this far”.
     
  3. The defendants’ argument that the evidence around how “Shape of You” was written had to be “dragged out” of the claimants was not accepted (paragraph 32). Master Kaye had ordered the claimants to answer a Part 18 request for further information (to the extent that they hadn’t already) and they had otherwise provided witness evidence. 

Mr Justice Zacaroli found that “the claimants undoubtedly won and won on every substantial point” (paragraph 2) and, as a result, held that “the claimants’ success is reflected in an order that their costs are paid by the defendants, without reduction” (paragraph 37).

The defendants were ordered to make an interim payment to Mr Sheeran and the other claimants of £916,200 (i.e. an immediate part-payment), whilst the remainder of costs will be dealt with by detailed assessment.

Comment

The judge’s decision serves as a useful reminder that, whilst the court has a wide discretion as to orders for costs, the general rule will often prevail in litigation – that the unsuccessful party pays the costs of the successful party. To convince the court to depart from the standard basis evidently requires overcoming a high threshold.

The case will now proceed to a detailed assessment of Mr Sheeran and the other claimants’ costs, should the parties not reach any settlement beforehand.

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