Costs News

08 October 2020
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Judge rejects challenge to level of interim costs payment based on fact of appeal

A High Court judge has rejected arguments for a significant reduction in an interim payment on account of costs, which the defendants in a multi-million-pound case argued should reflect the fact they are appealing and the absence of a detailed schedule of costs.

In March, Mr Justice Snowden found the defendants in Bilta (UK) Ltd (In Liquidation) and Ors v Natwest Markets PLC and Anor liable to the claimant companies for dishonest assistance and knowingly being a party to fraudulent trading by the claimant companies.

According to the consequentials ruling last week, the claimants’ costs schedule to 3 April was for £14.5m, providing “very brief descriptions of the categories of costs and expenses” without supporting detail. Just over £10m of it is for the lawyers – £6.7m for Rosenblatt Solicitors and £3.4m for counsel – and include “significant” recoverable uplifts under their conditional fee agreements (CFAs). They sought payment on account of 65%.

The defendants contended that the figure to which the percentage should be applied should not include the success fees, given that they were dependent on the claimants meeting the definition of a ‘win’ in the CFAs and the defendants were appealing – bringing it down to £9.3m.

They also argued that the judge should allow a “further generous margin for error” given that the claimants had not yet provided a detailed costs schedule. They said the interim payment should be ordered on a “double discounted basis” of 60% x 66% = 39.6% of £9.3m.

Snowden J rejected both arguments. He said interim payments were frequently ordered when a first-instance decision was subject to an appeal. “That being so, I do not see that the fact that certain elements of the costs claimed are subject to an express condition in that respect in the CFAs should make any difference.

“I also do not consider that a double discount of the level suggested by the defendants is necessary or appropriate to cater for the lack of detail of the fees claimed which has been provided.”

The costs schedule lacked the detail required for even a summary assessment or application for an interim payment on a much smaller case, he acknowledged.

“To that extent, I accept that I should be cautious when determining a reasonable amount. But the claimants’ costs schedule is verified by the claimants’ solicitor and I have no specific reason to believe that any particular items in it would be reduced on a detailed assessment by any greater amount than normal for a case of this magnitude.

“Taking these points into account, in my judgment a reasonable sum to be paid on an interim basis on account of costs in this case is £8m, which is about 55% of the total amount claimed by the claimants.”

Christopher Parker QC, Orlando Gledhill QC and Patricia Burns (instructed by Rosenblatt) for the claimants. John Wardell QC and Michael Ryan (instructed by Pinsent Masons) for the first defendant. Kenneth MacLean QC, Steven Elliott QC and Tamara Kagan (instructed by Slaughter & May) for the second defendant.


Anonymous   13/10/2020 at 19:02

Judges almost always favour the receiving party in costs related decisions.

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