Bargain Busting Limited v Shenzhen Ske Technology Co. Ltd & Ors [2026] EWHC 1476 (Ch)

[2026] EWHC 1476 (Ch)Case No IL-2024-000148
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INTELLECTUAL PROPERTY LIST (ChD)
Venue Royal Courts of Justice, Rolls Building, Fetter Lane, London, EC4A 1NLDate 19/6/2026
Before
MASTER CLARK
Between
BARGAIN BUSTING LIMITEDClaimant(1) SHENZHEN SKE TECHNOLOGY CO. LTDDefendants(2) SKE E-CIGS UK LTDDefendant(3) PHOENIX WHOLESALE & DISTRIBUTION LTDDefendant(4) TESCO STORES LIMITEDDefendant(5) BOOKER LIMITEDDefendant(6) WM MORRISON SUPERMARKETS LIMITEDDefendant
Thomas St Quintin and Bella Dennis (instructed by Brandsmiths) for ClaimantMatthew Waszak (instructed by Stobbs (IP) Ltd, Haseltine Lake Kempner LLP&Gunnercooke LLP) for First, Second, Fourth, Fifth and Sixth DefendantsKendal Watkinson (instructed by Knights) for Third DefendantHearing Hearing date: 19 December 2025, followed by written submissions on 9 January, 16 January, 2 March and 26 March 2026
Approved JudgmentThis judgment was handed down remotely at 10am on 19 June 2026 by circulation to the parties or their representatives by e-mail and by release to the National Archives..............................Master Clark:Applications
[1]This is my judgment on the costs of the following applications by the defendants (“Ds”) for security for costs against the claimant (“C”):(1) D1 and D2’s application dated 1 July 2025;(2) D3’s application dated 16 July 2025;(3) D4 and D5’s application dated 17 September 2025;(4) D6’s application dated 18 November 2025. (together, “the Applications”)

Parties and the claim

[2]The claim relates to the ownership and use of the mark “CRYSTAL” for e-cigarettes and vapes.[3]C sells electronic cigarettes under the name CRYSTAL BAR in the UK, and is the owner of 3 relevant registered trade marks (“C’s marks”). It alleges infringement of its marks under s.5(1) (double identity) and s.5(2) (likelihood of confusion) of the Trade Marks Act 1994.[4]Ds have raised a wide range of challenges to C’s marks, including, but not all applicable to all marks: revocation for non-use; invalidity on absolute grounds on the basis of descriptiveness, deceptiveness, being contrary to accepted principles of morality, and bad faith; and invalidity of the mark for “Crystal Bar” on relative grounds. Infringement is also denied on other grounds.[5]The Applications were made under CPR 25.27(b)(ii), which relevantly provides:
“Conditions to be satisfied 25.27 The court may make an order for security for costs if– (a) it is satisfied, having regard to all the circumstances of the case, that it is just to make such an order; and (b) … one or more of the following conditions apply— … (ii) the claimant is a company or other body (whether incorporated inside or outside England and Wales) and there is reason to believe that it will be unable to pay the defendant’s costs if ordered to do so.” (a) it is satisfied, having regard to all the circumstances of the case, that it is just to make such an order; and (b) … one or more of the following conditions apply— … (ii) the claimant is a company or other body (whether incorporated inside or outside England and Wales) and there is reason to believe that it will be unable to pay the defendant’s costs if ordered to do so.”

Procedural background

[6]The claim was issued on 18 September 2024, with only D1 as defendant. D2-D6 were added by amendment on 25 March 2025.[7]D1 first wrote to C about security for costs on 14 February 2025, asking for information about C’s finances. C replied on 28 February 2025 saying that it would be premature to provide this information. D1 (and D2, now having been joined to the claim) wrote again on 3 June 2025 seeking financial information. C’s response was that until D1 & D2 had provided an estimate of their costs, the request for financial information remained premature; and that security for costs should be revisited after the parties had filed their costs budgets.[8]On 16 June 2025, D1 and D2 sent C a draft costs budget, and requested security of £1.300,000. C maintained its position that the request was premature, but asked for an extension of time until 4 July 2025. D1 and D2 were only willing to agree to 27 June 2025.[9]On 19 June 2025, D3 wrote to C enclosing a draft costs budget and seeking security of £700,000.[10]On 1 July 2025, following the expiry of their deadline of 27 June 2025 (and no substantive response having been received), D1 and D2 issued their application. This was followed by D3’s application on 16 July 2025.[11]On 25 July 2025, D4 and D5 wrote to C requesting security in the sum of £674,197. This was not acceded to, and their application was issued on 17 September 2025.[12]On 21 October 2025, by its letter of that date, D6 sought security of about £449,000.[13]On 29 October 2025, C wrote to D3, copying in the other Ds:
“our client has been working hard to resolve the position on security and can shortly reply in full to the Applications (as defined in our letter of yesterday morning). As you will appreciate, however, there are a number of methods by which the required security may be provided to your client and the other four Defendants involved in the Applications, including but not limited to banker’s drafts, bank guarantees, personal guarantees, payment into Court, or ATE insurance etc. The final decision between those methods and implementation of the final choice will take a relatively short period of time … Once this response is complete, there will be a full answer to the Applications.”
Once this response is complete, there will be a full answer to the Applications.”[14]On 29 October 2025 D3 replied:
“Your reference to “banker’s drafts, bank guarantees, personal guarantees, payment into Court, or ATE insurance” is the first reference in over 8 months as to how your client may be funding the defendants’ security requests. Your client ought to have come to some conclusion to this long ago, especially since it has embarked upon complex multi-party litigation of this nature. With respect, your comments that “once this response is complete, there will be a full answer to the Applications” is completely misconceived. Indeed, if your client is relying upon an ATE policy to offer our clients sufficient assurances in relation to substantial adverse costs awards, that is deeply concerning. Any policy wording and anti-avoidance endorsement will need to be carefully scrutinised by the defendants and may require separate specialist advice and evidence from an insurance expert. Such ATE policies were heavily critised by the court in Innovate Pharmaceuticals Ltd v University of Portsmouth Higher Education Corporation [2022] EWHC 1681(TCC) and detailed guidance provided more recently in Lloyds Development Ltd v Accor Hotelservices UK Ltd [2025] EWHC 1238 (TCC)”
[15]On 13 November 2025, C filed a witness statement by its solicitor, Andrew Lee, in which he stated, at paragraph 56, that C was in the final stages of “incepting” an After the Event insurance policy (“ATE policy”) which would provide more than sufficient coverage for any adverse costs order made against C, and which would include an Anti-avoidance Endorsement (“AAE”). He also stated that it was anticipated that C would be able to provide confirmation that the policy was incepted and a copy of the policy with the financial terms redacted within 14 days of his statement “and likely much sooner”.[16]D6’s application was issued on 18 November 2025. The Applications were listed to be heard at the CCMC on 18 and 19 December 2025.[17]The ATE policy was not however provided by 27 November 2025. C entered into it on 2 December 2025, and it was provided in heavily redacted form to Ds on 3 December 2025.[18]Ds provided their comments on the ATE policy in letters written by D1 and D2’s solicitors on behalf of all Ds dated 8, 10 and 11 December 2025. They requested some of the information that had been redacted, and identified various issues with the wording of the policy. Ds submitted (and I accept) that 3 points were particularly important, in that they gave rise to a significant risk that the ATE policy would not respond in full to a claim for Ds’ costs:(1) clause 3 of the AAE did not expressly exclude the insurer’s right to avoid the policy for fraud – which could be achieved by inserting wording approved in Lloyds Developments Limited v Accor HotelServices UK Limited (No 1) [2025] EWHC 1238 (TCC), [2025] Costs L.R. 1453;(2) the AAE did not expressly provide that if there was a conflict between the wording of the AAE and the policy terms, the wording of the AAE would apply;(3) clause 4.12 of the ATE policy did not address – and therefore did not seek to limit – the circumstances in which the insurer could seek to assign or novate the policy, or seek to assign their rights under the policy.[19]C did not accept in its reply dated 10 December 2025 that Ds were entitled to comment on the drafting of the ATE policy or request it to re-negotiate its terms. It did provide some (but not all) of the information redacted in the version of the policy provided. It invited Ds to withdraw their Applications. Correspondence then followed in which Ds pressed their position and C did not concede it.[20]Finally, at 16.16 on 17 December 2025, the day before the listed hearing of the Applications, C wrote to set out that it had been liaising with its insurers to amend the ATE policy to reflect most of the changes requested by Ds, including the 3 important points set out above. These proposed changes (“the Amendments”) were set out in tabular form.[21]At the CCMC hearing, C gave an undertaking to use its best endeavours to obtain the Amendments. On that basis, but subject to Ds being entitled to return to Court to pursue the Applications if the Amendments were not obtained, Ds (other than D3) did not pursue their Applications.[22]D3 however, maintained its application, pending the Amendments being obtained. On 22 January 2026, C and D3 agreed that its application be stayed, with permission for D3 to apply to relist it if it received notice that further amendment had been made to the ATE policy.

Legal principles - costs

[23]The relevant legal principles are largely found in the CPR itself. The court’s decision as to costs is a discretionary one. However, the general rule is that the unsuccessful party pays the successful party’s costs: CPR 44.2(2)(a). The court retains a discretion to make a “different order”: CPR 44.2(2)(a).[24]In Sheffield v Sheffield [2018] EWHC 2360 (Ch), [2019] W.T.L.R. 295, I considered the approach to costs to be taken where the parties have reached a compromise. There are two lines of authority which are not wholly reconcilable. In BCT Software v Solutions v C Brewer & Sons [2004] FSR 150, Mummery LJ at [4] – [7] considered that in a case of any complexity, the Court could properly refuse to undertake the exercise at all. However, this is not a universal view. In Powles v Reeves [2016] EWCA Civ 1375; [2017] 1 Costs L.R. 19, David Richards LJ at [19] acknowledged that:
“[i]t is neither desirable nor generally practical for the whole case to be heard solely for the purpose of determining costs and it would usually be an unacceptable waste of the court's resources, as well as the parties' resources, to do so.”
[25]In this case, neither side (rightly) suggested that it would be proportionate or an efficient use of the parties’ or the court’s resources to refuse to determine costs liability and determine the Applications.[26]In Powles, the Court identified a number of factors which the judge should consider, in the absence of a determination of the merits (in that case, of the claim). These include:(1) the result of the settlement;(2) the conduct of the parties in the course of the litigation;(3) any reasonable offers of settlement that may have been made; and(4) in any case where it is tolerably clear, which party would have succeeded (in that case) at trial.

Discussion and conclusions

[27]C submitted that it was the successful party because the effect of the ATE policy was that it would be able to pay Ds costs if ordered to do so. I cannot accept that submission.[28]I approach the question of costs in two stages. First, I consider whether Ds were justified in issuing the Applications when they did. Cs submitted that the Applications were premature. However, the general principle is that an application for security for costs should be made promptly as soon as the facts justifying the order are known: 2026 White Book at 25.26.10. I therefore reject the submission that the Applications were premature.[29]As to whether Ds were entitled to security when they issued the Applications, C did not advance any argument as to its solvency or that Ds would not have been entitled to security in the absence of the ATE policy. In my judgment, they would have been entitled to security, and were justified in issuing their Applications.[30]Ds were also justified in pursuing the Applications until C entered into an ATE policy in a form that sufficiently protected their interests. The purpose of ordering security for costs is to protect the defendant (who is an involuntary party to litigation) against the risk that they may be unable to recover the costs of the claim brought against them: Bestfort v Ras Al Khaimah [2016] EWCA Civ 1099, [2016] 2 CLC 714 at [71].[31]The result of the settlement was to achieve that protection that would have been obtained from an order for security. As to D3, I do not consider that its conduct in waiting under the Amendments had been signed off by the insurers was unreasonable or justifies depriving it of the costs to which it would otherwise be entitled.

Amount of costs

[32]Ds’ costs of the Applications totalled £317,571.59. C’s costs totalled £58,708.05.[33]A summary of the costs claimed by each of Ds, including counsel’s costs, compared to thoseof C is set out below: Party Ds’ costs claimed (£) C’s costs claimed (£) D1/D2 D3 65,766 (inc. 12,000 counsel) 15,077.20 (inc. 2,737.50 counsel) D4/D5 91,515.40 (inc. 22,020 counsel) 11,013.45 (inc. 2,737.50 counsel) D6 28,789 (inc. 4,250 counsel) 13,565.20 (inc. 2,737.50 counsel) Total 317,571.59 (251,805.59 excluding D3)(57,020 counsel, 45,020 excluding D3) 58,708.05 (43,630.85 excluding D3)(10,950 counsel, 8,212.50 excl. D3)[34]C submitted that each of Ds’ costs were wholly unreasonable and disproportionate, and made detailed submissions on their statements of costs.[35]I consider that the overall level of the costs claimed is so high that summary assessment is not appropriate. I will therefore order them to be assessed at a detailed assessment, and, as required by CPR 44.2(8), order C to pay a reasonable sum on account of those costs.[36]As to determining a reasonable sum, the following factors are in my judgment relevant when considering the likely sum to be recovered on detailed assessment:(1) the claim is a high value one - although the relief sought is an enquiry as to damages or an account of profits, and none of the parties were willing to provide even an approximate figure for its value;(2) the sum sought in the Applications totalled £3,184,255, and the ATE policy will pay adverse costs up to £4 million;(3) C effectively conceded that security or its equivalent would need to be provided in its letter of 29 October 2025;(4) the Applications were not complex, and had no features that took them out of the norm; the only significant issue being as to the terms of the ATE;(5) from 29 October 2025, D1/D2’s solicitors (Stobbs (IP) Ltd (“Stobbs”)) also corresponded with C on behalf of D4 and D5;(6) from 6 November 2025, Stobbs corresponded with C on behalf of D3, D4 and D5;(7) from 17 November 2025, Stobbs corresponded with C on behalf of all Ds;(8) at the CCMC, a single counsel, Matthew Waszak, represented all Ds apart from D3, which was represented by a relatively junior barrister (5 years call).[37]With these factors in mind, I approach the question of what is a reasonable sum on a broad brush basis. I consider that the total of Ds’ costs should not reasonably have exceeded 3 times C’s (unassessed) costs: £58,705.05 x 3 = £176,124.15. Apportioning that total amount between Ds in proportion to the costs claimed produces the following result: Party Costs claimed (£) Proportionate share of £176,124.15 55% D1/D2 131,501.19 72,930 72,326.65 D3 65,766 36,474 36,171.30 D4/D5 91,515.40 50,754 50,333.47 D6 28,789 15,966 15,833.95 Total 317,571.59 176,124 174,665.37[38]This proportionate share in what I shall order as a payment on account. I have added to the table, by way of comparison, the amount representing 55% of the costs claimed. The sums I am ordering are slightly more than 55%, and this confirms my view that the sum I am ordering reflects the factors I have identified above.[39]The parties should file a draft order (agreed, if possible) reflecting my decision.