A trademark infringement claim in the UK High Court has been struck out in full after the claimant failed to comply with a court order requiring it to provide substantial security for costs, underscoring the financial risks of pursuing complex litigation.

The ruling highlights the importance for claimants to carefully assess both the legal merits and financial viability of a claim before issuing proceedings.

Background: Trademark dispute in the vape sector

The case concerned an alleged trademark infringement relating to vape display stands supplied to major UK supermarkets.

Knights acted for Phoenix, one of the UK’s leading vape distributors, successfully challenging the claimant’s ability to meet potential adverse costs associated with High Court proceedings.

Security for costs: £450,000 order

Following an application by Phoenix, the High Court ordered the claimant to provide £450,000 in security for costs, payable in staged tranches as a condition of continuing the claim.

When the claimant failed to make these payments, Knights applied to have the claim struck out.

The court upheld the application, bringing the proceedings to an end. Phoenix was also awarded its costs of both the underlying claim and the strike-out application; an outcome that remains relatively uncommon in such cases.

Key takeaway: The real cost of High Court litigation

Commenting on the judgment, Andrew Leese, Intellectual Property Partner at Knights, said:

“Bringing claims to the High Court requires careful consideration at the outset of both legal merits and funding realities. Where a claimant cannot demonstrate an ability to meet potential adverse costs, the court will intervene decisively to safeguard parties.

... Security for costs isn’t something that should be overlooked, and this case shows how quickly a claim can unravel if the financial aspect of litigation has not been properly planned for.

In many cases, there may be alternative routes available, such as different forums or funding structures, which should be considered before proceedings are issued.”

“Security for costs isn’t something that should be overlooked, and this case shows how quickly a claim can unravel if the financial aspect of litigation has not been properly planned for. This is a lesson that will no doubt resonate across all litigation cases going forward.”

Andrew Leese, IP Partner

Wider implications for UK litigation

This decision reflects broader concerns around access to justice and litigation funding, particularly the rising cost of after-the-event (ATE) insurance. In some cases, insurance premiums can approach or exceed the level of security sought, forcing claimants to make difficult strategic decisions.

The case serves as a reminder that security for costs applications are a powerful tool in UK litigation, and failing to comply with such orders can bring claims to an abrupt end.

The matter was led by Intellectual Property Partners, Andrew Leese and Philip Partington, supported by Associate, Sina Khadem and Solicitor, Sergio Ferreira.