How not to deal with challenges in the Company Names Tribunal

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The Company Names Tribunal (the Tribunal) was set up to adjudicate disputes arising under section 69(1) Companies Act 2006 (the Act). Section 69(1) of the Act gives an applicant the right to object to a company’s registered name on two grounds: a) the name is the same as a name associated with the applicant, provided it is a name in which the applicant has goodwill; or b) it is sufficiently similar to such a name that use of the name in the UK would be likely to suggest a connection between the company and the applicant.

In August 2013, Blue Sky Law Limited (the Applicant) brought an action under section 69(1) against Blue Sky Legal Services Limited (the Respondent). The Applicant and its trade mark agent had written to the Respondent on numerous occasions, requesting the Respondent change its name and this correspondence was followed up with telephone calls. When no response was received the Applicant filed an application with the Tribunal, against both the Respondent and its director. The Respondent then changed its name to ‘Top Notch Legal Services Limited’. At the same time, the Respondent denied that its previous name, ‘Blue Sky Legal Services Limited’, caused or was likely to cause confusion between the Applicant and itself.

As the Respondent’s name was no longer an offending name, the Tribunal closed the case and the applicant filed a request that a costs order be made against the Respondent and director. The director opposed this and asked for an award of costs to reflect the time taken to respond to the application.

Under Rule 11 of the Company Names Adjudicator Rules 2008, the Tribunal has the power to award costs that (s)he considers to be reasonable. The Tribunal granted the Applicant the costs order on the basis that the application could have been avoided had the director engaged with the pre-action correspondence and changed its name at an earlier date. The Respondent and the director were found jointly and severally liable to pay the Applicant £600 of costs, £400 for the application fee and £200 for the statement of case.

WM comment

Although the costs awarded in this case were not substantial, a costs order is nonetheless best avoided. If an objection to a company’s registered name under section 69 of the Act is received it should be treated seriously and, in particular, you should not ignore pre-action correspondence, nor wait until an application has been filed before considering whether to change the company name.