Brown v Mcasso Music Productions Ltd
Reference:  EWCA Civ 1546;  EMLR 26
Court: Court of Appeal
Judge: Scott Baker & Neuberger LJJ
Date of judgment: 10 Nov 2005
Summary: Costs - Discretion - Part 36 Offers - Refusal to Negotiate - Copyright - Appeal from Patents County Court
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Christina Michalos KC (Appellant)
Instructing Solicitors: Bar Pro Bono Unit
The Claimant acting in person had succeeded in an action for copyright infringement in the Patents County Court that had been allocated to the fast track. He claimed that he was the joint-author of the lyrics of musical work titled Mr High Roller that the Defendant had produced. Copyright infringement was alleged in respect of use on the Defendant’s website as a showreel. The trial judge held that he was the owner of 10% of the copyright and awarded £180 damages. However, the Court made an order requiring the Claimant to pay Defendant’s costs. In the exercise of the costs discretion, the judge relied on 2 offers that were rejected by the Claimant plus his refusal to agree to refer the case to the Musicians Union Dispute Resolution Scheme. Neither of the offers complied with Part 36. The Defendants’ costs were of the order of £52,000. The Claimant appealed to the Court of Appeal against the costs order.
Whether the judge had erred in principle in placing so much weight on the rejection of two offers that did not comply with Part 36 and a refusal to refer the case to the Musicians’ Union Dispute Resolution Scheme (MUDRS) in the light of the principles set out in The Trustee of Stokes Pension Fund v Western Power Distribution  EWCA Civ 854 (weight to be applied to non-Part 36 offers) and Halsey v Milton Keynes General NHS Trust  1 WLR 3002 (refusal to mediate does not displace general rule that costs follow the event)
Allowing the appeal and substituting an order of ‘no order as to costs’: (1) following Halsey, the reasons given by the Appellant for refusing MUDRS were reasonable and should not have been relied on in exercising the costs discretion. (2) the rejected offers did not comply with Part 36. In the light of the guidance in The Trustee of Stokes Pension Fund, the judge erred in principle as he was not entitled to rely on this offer as a reason for ordering the Appellant to pay the Respondent’s costs. (3) Considering Roache v News Group Newspapers  EMLR 161, and asking ‘who in reality had won’, the answer was neither party. The appropriate order was no order as to costs.
The Appellant avoided the injustice of having succeeded in a fast track trial only to be faced with a bill of £52,000. From a Defendant’s perspective, this case serves as a reminder that in order for offers to have any effective consequences from a costs perspective they either have to comply with Part 36 or in order to be taken into account in the court’s discretion, offers should comply with the criteria set out in The Trustee of Stokes Pension Fund v Western Power Distribution namely (1) the offer must be expressed in clear terms; (2) be expressed to be open for at least 21 days; (3) the offer should be genuine and not sham and (4) the Defendant also needs to be clearly good for the money at the time the offer was made.