Company Names Tribunal: practice direction
The Company Names Tribunal practice direction provides the framework for the management of proceedings brought before the Tribunal.
Unless otherwise stated references to the Act mean the Companies Act 2006 and references to the Rules means the Company Names Adjudicator Rules 2008.
1. Scope of the practice direction
The Rules provide the framework for the management of proceedings brought before the Tribunal. Certain of the Rules are prescriptive in nature, such as the requirements as to fees and forms. However, the adjudicator has a wide discretion to manage proceedings as he/she sees fit. For the sake of clarity and consistency and so that parties know what to expect, this direction sets out the Tribunal’s practice in relation to the main areas where the adjudicator’s discretion operates.
This practice direction will not fetter the discretion of the adjudicator.
2. Setting the period for filing a defence
The Rules do not specify time periods for actions to be completed; time periods are set by the adjudicator. The normal period of time (under rule 3(3)) for the primary respondent to file a defence under rule 3(4) will be two months. However, in setting the period for the filing of a defence, the adjudicator will consider whether there are any factors, such as an indication in the application of the results of any pre-action enquiries or contact between the parties, which may mean that a different period of time will be appropriate.
3. Joining of co-respondents to proceedings
3.1.1 Under section 69(3) of the Act any member or director of a respondent company may be joined to proceedings before the company names adjudicator.
Rule 3(6) states:
Any member or director of the primary respondent who is joined as a respondent to the application must be joined before the end of a period specified by the adjudicator.
The use of the word “may” in the Act indicates that joining a member or director is a discretionary power of the adjudicator. It is necessary for the applicant to request that a party(ies) is joined to a case and the adjudicator will consider the merits of the request. When the application is formally sent to the primary respondent, the Tribunal will notify the applicant and primary respondent of the date by which such a request should be made, if it has not been made with the application.
3.1.2 The first requirement of an applicant in requesting the joining of a member or director of a company is to furnish evidence that the party named does indeed have this status; a matter that can be shown e.g. by the filing of copies of documents from Companies House. The applicant should also give reasons as to why it wants another party(ies) joined to the proceedings. Having received a request supported by evidence of the relevant status of the party and reasons for the request, the adjudicator will write to the proposed co-respondent(s) asking for their comments on the request. It would be a denial of natural justice not to allow the potential co-respondent(s) to comment upon the request. The adjudicator will then give a preliminary view on the matter, allowing the parties the opportunity to request a hearing as per rule 5(3) before the preliminary view becomes a final decision. The preliminary view will include a brief statement as to the reasons that have given rise to it.
3.1.3 If a party is joined to the proceedings the applicant will have to copy all documentation that it has filed in relation to the application to the co-respondent(s) within 14 days of the notification of the joining. Any further correspondence and evidence must also be copied to the co-respondent(s).
3.1.4 In relation to costs the adjudicator will give careful consideration to the facts of the case as to whether a co-respondent(s) should be jointly and severally liable for costs, especially where no defence has been filed (under rules 3(2), (3), (4) and (5) only the primary respondent can file a defence). The adjudicator will take into account, for example, whether it is established that the co-respondent is the controlling mind of the respondent company.
3.1.5 Applications in relation to limited liability partnerships (LLPs) can be made to the adjudicator. In the case of LLPs, co-respondents will be members and/or designated members (as per the Limited Liability Partnerships Act 2000). The same criteria in considering requests to join co-respondents will apply to LLPs as apply to companies.
4.1 The purpose of evidence before the tribunal is for parties to prove their case by demonstrating facts and rebuttal of the other side’s version of events. In relation to the applicant, it is a statutory requirement under section 69(1)(a) and (b) that it establishes goodwill or reputation (section 69(7)). Unless the nature and extent of the applicant’s goodwill or reputation are particularised in the claim and admitted by the respondent, evidence filed by the applicant must, therefore, include proof that the applicant has the requisite goodwill or reputation to bring the action before the tribunal, in addition to other facts which it considers relevant.
4.1.2 To assist the tribunal in coming to a decision, the respondent’s evidence should show not only facts in relation to the allegations which the applicant has made but should include facts about its own activities, such as the nature, history and longevity of its business activities, with specific reference to the contested company name.
4.2 Time periods for filing evidence
4.2.1 Under rule 4 periods of two months will be set for the filing of evidence. Normally the applicant will file evidence first, the respondent(s) will be given an opportunity to file evidence in answer, and the applicant will be permitted to file evidence in reply. However, the adjudicator will consider the statement of grounds and counterstatement and, having regard to the issues in dispute, may decide that the respondent(s) should file evidence first, or that the evidence should be filed concurrently by the parties. Similarly, under rule 6(3), the adjudicator may control the evidence by giving directions; for example, as to the issues on which he/she requires evidence; the nature of the evidence, and the manner in which the evidence is to be filed.
4.2.2 The adjudicator may allow the filing of additional evidence; he/she will decide upon the time to be allowed after considering the nature of the evidence which is to be filed.
4.3 “Without prejudice” material
4.3.1 Correspondence between the parties in disputes about a company name have been included with statements of case and in evidence. In some circumstances this correspondence is clearly “without prejudice”. It is possible that the best evidence that the registration of a company name was opportunistic within the terms of the Act will arise from correspondence between the parties. This may give rise to a tension between the desire of a party to put forward its best case and the “without prejudice” rule. However, the “without prejudice” rule must still have effect upon proceedings before the tribunal. There is no opt-out from the fundamental principles of the “without prejudice” rule. However, the holder’s motives in registering the challenged company name will only become material if the owner of the company name presents a prima facie justification for its registration, as per section 69 (4) of the Act, the applicant having established the requisite goodwill.
4.3.2 Where the parties have legal representation it will be for the legal representatives to submit that documents should be excluded as being “without prejudice”; the adjudicator will not act of his or her own motion.
4.3.3 If an application is defended and one or both parties does not have legal representation, an adjudicator will consider whether material should be excluded from the proceedings on the basis that it falls within the “without prejudice” rule, when and where the adjudicator considers that the matter becomes material to the proceedings.
4.3.4 The parties will be advised of the adjudicator’s view of the matter. They will be able to contest the findings of the adjudicator in correspondence and, if a party continues to contest the decision of the adjudicator, it will be able to request an interlocutory hearing to make its submissions. If an adjudicator has considered matter that it is decided is “without prejudice” and for which privilege has not been waived, the adjudicator will recuse (disqualify) himself/herself from making the substantive decision. The adjudicator(s) making the decision will not be tainted by having seen “without prejudice” material. Further, references to and comments on “without prejudice” material will also be liable to be excluded from the proceedings, depending upon the nature of the references and the comments.
4.3.5 The normal criteria for considering whether matter is “without prejudice” will be taken into account. Parties are reminded of the judgments of the courts in Framlington Group Limited and AXA Framlington Group Limited v Ian Barnetson  EWCA Civ 502, Unilever plc v Procter & Gamble Co  EWCA Civ 3027 and Ofulue and another v Bossert  UKHL 16. The considerations in relation to the exception as a result of unambiguous impropriety will, if necessary, be applied, as per, for instance, in Robin Jeanne Williams v Anthony Steven Hull  EWHC 2844 (Ch).
4.3.6 It is, of course, the case that material that is marked “without prejudice” may not fall within this category and material that is not so marked will fall within this category.
4.3.7 In considering whether material is “without prejudice” the adjudicator will take a view as to whether it relates to a genuine attempt to reach an agreement. The adjudicator takes note of the material that was considered by the court in Glaxo Plc and other v Glaxowellcome Limited and Others  FSR 388 and Marks & Spencer Plc v One In A Million Ltd and Others  FSR 265. In the latter case Jonathan Sumption QC (sitting as a deputy judge of the High Court) noted:
A convenient illustration of the first three possibilities is provided by the letter which Mr Conway wrote to Burger King, the well-known restaurant chain, after acquiring the domain name burgerking.co.uk Burger King had already registered its own domain name burger-king.co.uk, which was identical except for the hyphen. Mr Conway wrote: Further to our telephone conversation early this evening. I confirm that I own the domain name burgerking.co.uk. I would be willing to sell the domain name for the sum of £25,000 plus VAT. In answer to your question regarding as to what we would do with the domain name should you decide not to purchase it - the domain name would be available for sale to any other interested party. As I am sure you are aware the Internet is an extremely fast growing medium, and the standard convention for Domain name for a company name of more than a single word is to have no hyphens in the domain name. Although you currently have burger-king.co.uk this would not be the most obvious first choice for any individual to use, should they be speculatively looking for your U.K. website. A rather similar although less explicit and less exorbitant attempt has been made by Mr Conway to sell the domain name bt.org, one of those in dispute in the present actions, to British Telecom for £4,700.
In the above case the correspondence of the respondents offering the sale of the domain names to the plaintiffs was not shut out as being “without prejudice” because it was not considered to be part of genuine negotiations.
4.3.8 If there have been several exchanges of correspondence between the parties over a potential transfer of the company name for consideration, it is very likely that this correspondence will be excluded from proceedings as being “without prejudice” as being indicative of genuine negotiation. However, each case will be judged on its merits.
5. Extensions of time
5.1.1 Under rule 7(1), the adjudicator has discretion to extend (or further extend) any time period, including one which has expired, whether or not a request has been made to extend a time period.
5.1.2 The adjudicator may also extend any time period upon request of any party to the proceedings, as per rules 7(2) and 7(3) (including a time period which has already expired). A request for an extension of a time period must be made on Form CNA 5 (rule 7(4)), accompanied by the fee. The request should be made for the appropriate length of time required to undertake the work that needs to be done.
5.1.3 It is important to note that the adjudicator will already have decided the length of time deemed appropriate for the particular action (e.g. filing evidence). Therefore, the Tribunal expects that requests for extensions to periods of time will be the exception, rather than the norm. A request for an extension of time will not be granted automatically but will be subject to the adjudicator’s discretion. The adjudicator will have regard to the reasons supplied, the length of time requested, the fairness and proportionality of the request, including the complexity of the case, and any prejudice likely to be suffered by either party in allowing or refusing the request.
5.1.4 In requesting any extension, parties should show that the facts merit the request (rule 7(4)). In particular, the request should show clearly what progress has been made thus far, what still needs to be done and the reasons why the party making the request has been unable to complete the particular action required (e.g. gathering of evidence). If the request is made after the time period has expired (a retrospective extension request), it should also state why the request is being made out of time (rule 7(4)). Any request for a retrospective extension must be filed before the end of the period of 2 months beginning with the date the time period in question expired (under rule 7(3)).
6. Written submissions in lieu of a hearing
6.1 Under rule 5(5) the parties will normally be given a period of 6 weeks to file written submissions.
7. Copying of correspondence
7.1 It is a requirement under rule 4(2)(b) that evidence is copied to other parties in the proceedings. The adjudicator expects that all other correspondence, including requests for extensions to time periods, will also be copied to other parties in the proceedings, except where confidentiality has specifically been requested under rule 6(2)(d). If parties fail to observe this stated practice of copying correspondence, the adjudicator will invoke rule 6(2)(a); it is therefore in the interests of all parties, to reduce both costs and time, that correspondence is copied to the other parties at the same time that it is sent to the Tribunal.
8. Applications to strike off
8.1.1 If a request has been made to Companies House to strike off a company which is the subject of an application to the tribunal, the application is potentially without object.
8.1.2 If prior to the application being decided the company is struck off, the adjudicator cannot give a decision in relation to the substantive issue of the application, (section 69 of the Act is linked to section 73(1)(a), the latter requires the adjudicator to make an order requiring the respondent company to change its name to one that is not an offending name but the name of a struck off company cannot be changed. Section 73(1)(b) is consequential to section 73(1)(a) and so the former provision cannot apply.)
8.1.3 The practice of the adjudicator will vary according to the stage of the proceedings when the application to strike off is made.
8.2 Application to strike off made before CNA1 served
8.2.1 The adjudicator will be minded to suspend the application pending the outcome of the application to strike off. If the applicant does not object to the proposed suspension the application will be suspended pending the outcome of the application to strike off. If the company is struck off, the application will be closed as being without object and the application fee will be refunded.
8.2.2 If the applicant objects to the suspension the adjudicator will consider the merits of the objection and decide on the course of action to be followed.
8.3 Application to strike off after serving CNA1 but before defence received (including after period for filing defence has expired)
8.3.1 The adjudicator will be minded to suspend the application pending the outcome of the application to strike off. If neither the applicant nor the respondent objects to the proposed suspension the application will be suspended pending the outcome of the application to strike off. If the company is struck off, the application will be closed as being without object.
8.3.2 The period for filing a defence, if this has not already expired, will be suspended pending the outcome of the application to strike off.
8.3.3 If the applicant or the respondent objects to the suspension the adjudicator will consider the merits of the objection and decide on the course of action to be followed.
8.4 Application to strike off after defence received
8.4.1 The adjudicator will be minded to suspend the application pending the outcome of the application to strike off. If neither the applicant nor the respondent objects to the proposed suspension the application will be suspended pending the outcome of the application to strike off. If the company is struck off, the application will be closed as being without object.
8.4.2 Evidence periods will be suspended pending the outcome of the application to strike off.
8.4.3 If the applicant or the respondent objects to the suspension the adjudicator will consider the merits of the objection and decide on the course of action to be followed.
8.5 Application to strike off after decision issued
8.5.1 If the applicant has been successful and there hasn’t been a voluntary change of name to a non-offending name and the company has been struck off prior to the issuing of an order to Companies House to change the name, no order to change the name can be issued to Companies House as the company is no longer extant. If the company has not been struck off, an order to change the name will be issued to Companies House.
8.6 Section 1003 et seq of the Companies Act 2006
8.6.1 The adjudicator does not consider that ordering the change of a company name has any effect upon an application to strike off. This is not an activity of the company, as per section 1004. Section 1009 (1)(a)(i) relates to the company itself changing its name, i.e. an action by the company. An order to change the name of a company is not an action of the company but that of the adjudicator.
9. Voluntary change of name
9.1 New name does not appear to adjudicator to be an offending name
Name changed before CNA1 served
9.1.1 The adjudicator will be minded to decide that the application is without object and the application will be closed and the application fee will be refunded.
9.1.2 If the applicant objects to the closing of the proceedings the adjudicator will consider the merits of the objection and decide on the course of action to be followed.
9.2 Name changed after CNA1 served
9.2.1 The adjudicator will be minded to decide that the application is without object and the application will be closed.
9.2.2 If any of the parties object to the closing of the proceedings the adjudicator will consider the merits of the objection(s) and decide on the course of action to be followed.
9.2.3 If the company has voluntarily changed its name after the application has been filed and it had notice that an application would be made, an award of costs could still be made against the newly named company as it remains the same legal entity as the originally named company. Any award of costs would be dependent upon the applicant seeking an award of costs and satisfying the tribunal that the respondent had received sufficient notice that the application would be made (see 10.4). Requests for costs in such cases will be considered on the facts of the individual cases.
9.3 New name appears to adjudicator to be an offending name
9.3.1 Applicant will be asked for its views of the change of name in relation to its application. The respondent will also be given the opportunity to make written submissions on the issue. The applicant may request the amendment of its statement of grounds.
10.1 Scale of costs
10.1.1 Under rule 11, the adjudicator may award costs (in Scotland, expenses) to any party in the proceedings. The adjudicator will not normally award the actual costs incurred but will follow a scale of costs. The scale of costs will give an indication to the parties at the outset as to what they are likely to have to pay if they lose.
For those with legal representation the scale of costs will be as follows:
|Preparing a statement and considering the other side’s statement||From £300 to £500 depending on the nature of the statements|
|Preparing evidence and considering and commenting on the other side’s evidence||From £500, if the evidence is light, to £2,500 if the evidence is substantial. The award can go above this range in cases involving an exceptional amount of relevant evidence but may be cut down if the successful party had filed a significant amount of unnecessary evidence|
|Preparing for and attending a hearing||Up to £1,500 per day of hearing, capped at £3,000 for the full hearing unless one side has behaved unreasonably. From £100 to £500 for preparation of submissions, depending on their substance, if there is no hearing|
|Expenses||(a) Official fees arising from the action that have been paid by the successful party (other than fees for extensions of time.)(b) The reasonable travel and accommodation expenses for any witnesses of the successful party required to attend a hearing for cross examination|
Those without representation will normally receive 50% of the above but will receive the full expenses.
10.2.1 In relation to costs the adjudicator will give careful consideration to the facts of the case as to whether a co-respondent(s) should be jointly and severally liable for costs, especially where no defence has been filed (under rules 3(2), (3), (4) and (5) only the primary respondent can file a defence). The adjudicator will take into account, for example, whether it is established that the co-respondent is the controlling mind of the respondent company.
10.3 Costs where there has been application to strike off or a voluntary change of name
10.3.1 Requests for costs in such cases will be considered on the facts of the individual cases (also see 9.2.3).
10.4 Undefended applications
10.4.1 If an application is undefended, an award of costs is likely to be made against the respondent, provided pre-action enquiries have been made and provided the application succeeds. It should be noted, however, that the adjudicator will not normally award costs to the applicant if the respondent, whilst not defending the application, nevertheless satisfies the tribunal that it did not receive any notice, or did not receive adequate notice, that the application would be made. The adjudicator will, likewise, normally not award costs if the applicant indicates in box 7 of the application form (CNA1) that it did not contact the company prior to making the application.
10.4.2 If there is no indication (or there is inadequate indication) on the application form as to whether reasonable pre-action contact was made, the adjudicator may request information from the applicant prior to considering whether an award of costs is appropriate.
10.5 Off-scale costs
10.5.1 There are exceptions to the practice of awarding costs from the scale, such as unreasonable behaviour. In particular, it should be noted that the adjudicator expects that a prospective applicant will have sent the respondent a letter before action and properly considered any response prior to filing an application to the tribunal. If an application is unsuccessful because the respondent shows a valid defence under section 69(4) of the Act (such as that it is conducting a legitimate business under the company name) which should have been obvious to the applicant if reasonable pre-action enquiries had been made, the adjudicator will be willing to consider a request from the respondent for an award of costs above the usual scale. Such an award would be made in order to compensate the respondent for the unreasonable behaviour of the applicant; that is, by making an unrealistic application which the respondent has been put to the burden of defending.
10.5.2 If it becomes apparent that a particular party is persistently causing successful applications to be made to the tribunal, the adjudicator will be willing to consider requests for an award of costs off the scale to the applicant(s).
10.5.3 The adjudicator may award costs off the scale, approaching full compensation, to deal proportionately with wide breaches of rules, delaying tactics or other unreasonable behaviour. Any claim for costs approaching full compensation will need to be supported by a bill itemising the actual costs incurred.
10.5.4 The adjudicator may award costs below the minimum indicated by the standard scale. This could happen where, for example, the statement of case/counterstatement and/or evidence is very limited or where a good deal of superfluous and/or irrelevant evidence has been filed.
10.6 Conditional fee arrangements
10.6.1 If one of the parties has agreed a conditional fee arrangement (CFA) with their legal representative, any “success fee” will not be taken into account when assessing costs. If the normal scale is applied, there will be no uplift to take account of any CFA. Even when off-scale costs are awarded, the amount will be assessed using the usual principles for assessing off-scale costs, and the amount will not be affected by the existence of a CFA.
10.6.2 Consequently, the requirement in rule 44.15 of the Civil Procedure Rules to provide information about any CFA does not apply to proceedings before the adjudicator. However, parties will need to consider the implications of rule 44.15 in the event of an appeal to the courts.
- the EWCA Civ 502 judgment can be found on the British and Irish Legal Information Institute (BAILII) website
- the EWCA Civ 3027 judgment can be found on the British and Irish Legal Information Institute (BAILII)
- the UKHL 16 judgment can be found on the Parliament UK website
- the EWHC 2844 judgment can be found on the British and Irish Legal Information Institute (BAILII)
Published: 29 October 2014
From: Company Names Tribunal