Monday, 25 January 2010

T 212/07 - It's Pay Time, Folks

This decision deals with a classical case of apportionment of costs. It is noteworthy, however, because the Board directly fixed the amounts to be paid by the party whose fault made the other party incur additional costs.

[…] The Board has power under A 104(1) to make an order for a different apportionment of costs “for reasons of equity”. As to such reasons, the case law of the Boards of Appeal establishes that a party who receives a summons to oral proceedings (OPs) has an equitable obligation either to appear at the OPs at the specified time and place, or to notify the Board as soon as it knows that it is not going to appear at such OPs. See T 930/92 [6.1].

The Board has no direct evidence about when the Appellant decided, and thus knew, that it was not going to attend the OPs. Although the Respondent has asserted that the Appellant never had any intention of attending the OPs there is no evidence for this. All that the Board knows from the Appellant is that the reason it decided not to attend the hearing was the high cost involved. As to this, however, the Board accepts the Respondent’s submission that the costs of attending had not suddenly escalated shortly before the date of the OPs and that the Appellant would have been aware of the costs involved when originally making a request for OPs in the grounds of appeal. More to the point, the Appellant would have been aware of the costs when it received the summons in February 2009. The summons would also have focussed the Appellant’s mind on the forthcoming hearing and caused it to consider its position. As already pointed out, the summons was accompanied by a communication which was generally negative as regards the Appellant’s prospects of success. The Appellant never filed any substantive response to the communication (of course, it was not obliged to), the only response being the letter dated 8 May 2009 saying that it would not be attending the OPs. Given this background, and in the absence of any other evidence or response from the Appellant on this issue, the Board considers that it is a reasonable inference to draw, on the balance of probabilities, that the Appellant had decided by about the end of March at the latest (i.e. giving the Appellant the benefit of a period of about one month to digest the contents of the communication) that it was not worth its while to incur the expense of coming to the OPs. It follows that the Appellant failed in its duty to inform the Office and the Respondent as soon as it knew it was not going to attend. The Board therefore considers it right for reasons of equity to make a different apportionment of costs. [6.2]

The Board also has power to make an order which fixes the amount of costs to be paid. See T 934/91 and T 323/89 and R 88, which governs the present case. The Board proposes to exercise such power. [6.3]

As to this, the order for apportionment of costs should be such as to compensate the other party for the unnecessary, i.e. wasted costs which it has incurred as the direct result of the Appellant’s failure in its duty. See T 952/00 [5]. In the Board’s view the incurring of such costs should also be a foreseeable result of such failure, and the costs should be reasonable. [6.4]

If in the present case the Appellant had informed the Office and the Respondent at the end of March or in early April that it did not intend to be present at the OPs, then on the balance of probabilities the Board would have cancelled the date soon after being told this, just at it did when the Board received the Appellant’s fax on 8 May 2009. This was because nothing had happened to change the Board’s initial negative view of the appeal and the Board was in a position to issue a decision dismissing the appeal without hearing the Respondent further in OPs. The Respondent had only requested OPs against the event that the Board did not intend to dismiss the appeal. Had the Board cancelled the date set for OPs sometime in April, then none of the costs which the Respondent now claims would have been incurred. It follows that all these costs were wasted as the direct result of the Appellant’s failure. [6.5]

As regards the Respondent’s costs of air travel and hotel accommodation for its representative, the nature of these expenses and the amounts appear perfectly reasonable. It was also foreseeable that such costs would be incurred when they were in fact incurred. The Board therefore intends to make an order in respect of the sums claimed, i.e. € 306 in respect of air fares (€ 325.79 less € 19.79) and € 100 in respect of hotel accommodation, making € 406 in total. [6.6]

As to the costs of preparing for the OPs, the Board accepts that a representative will properly spend time preparing himself for OPs immediately before they take place, the cost of doing so being properly chargeable to his client. Although this preparation will often take place a day or so before the proceedings, in the present case this work was done the previous week. Nevertheless the Board accepts the Respondent’s representative’s explanation for this as being perfectly reasonable in the circumstances. The Board also considers that it was foreseeable that the Respondent’s representative might prepare for the OPs a week or so in advance. Finally, the Board has no grounds for saying that the amount claimed is not reasonable. The Board therefore intends to make an order in the amount claimed also, i.e. GBP 1280. [6.7] 

To read the whole decision, click here.