Costs News

04 March 2021
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News in brief - 04.03.2021

Aarhus Convention costs caps include VAT

The caps on the costs paid by litigants in environmental cases covered by the Aarhus Convention include VAT, the Court of Appeal has ruled in Friends of the Earth Ltd, R (On the Application Of) v Secretary of State for Transport [2021] EWCA Civ 13.

There was no authoritative judgment at its level on whether VAT was included in the caps set by CPR 45.43, but the court said including VAT would not “impede or frustrate” implementation in domestic law of the Aarhus Convention.

“That convention simply requires that the costs of environmental litigation such as this should not be prohibitive. It does not require a contracting state to specify a particular ceiling, still less to state whether it is inclusive or exclusive of VAT.”

The court made no order for the costs of the application, saying it had been important to resolve this issue of principle.

 

High Court judge refuses solicitors’ permission to appeal against wasted costs order

The High Court has dismissed a solicitor’s renewed application for permission to appeal against a wasted costs order made against them in Jovicic and Others v The Serbian Orthodox Church-Serbian Patriarchy [2020] EWHC 2229 (QB).

In Jovicic – which was covered in the September/October issue of Costs Lawyer, Kesar & Co brought six separate proceedings in the High Court against the defendant church on behalf of citizens of Serbia, Croatia and Bosnia-Herzegovina. The claimants alleged they were victims of abuse in those countries by clergy belonging to the defendant church.

None of the claimants had any connection whatsoever with England and Wales, and no basis for English jurisdiction was ever asserted, except that England constituted an alleged “forum of necessity” and/or that jurisdiction should be exercised in the “interests of justice” based on the claimed impossibility of the claimants obtaining a fair hearing elsewhere.

No grounds for seeking permission of the court to serve out existed and no application had been made. Instead, the solicitors purported to serve proceedings on a London parish Serbian Orthodox church, itself a separate registered UK charity, who belonged to an eparchy (diocese) whose headquarters was in Scandinavia.

In fact, the claim forms were not served in time, and a subsequent application to extend time was not pursued by Kesar.

In January 2020, the defendant church’s challenge under CPR part 11 was successful and Master Cook ordered Kesar to show cause as to why a wasted costs order should not be made against them. After further evidence and detailed oral submissions, Master Cook made a wasted costs against Kesar, subject to detailed assessment on an indemnity basis in August 2020.

According to Michael McParland QC (instructed by DWF), who acted for the successful defendants, Kesar’s application for permission to appeal was refused on paper by Mr Justice Johnson in November 2020. After renewed oral submissions in late January, Mr Justice Cavanagh gave a detailed ex tempore judgment refusing permission to appeal. Kesar & Co’s claim to English jurisdiction had been hopeless on the merits, he found; the master had been perfectly entitled to make the orders he had made.

 

Court upholds successful claimants’ contractual right to indemnity costs

The High Court has awarded a successful claimant their costs on the indemnity basis because they had a contractual right to “all costs and expenses”.

In KfW v Singal (Costs) [2020] EWHC 2222 (Comm) – decided in August but only recently published – Mr Christopher Hancock QC, sitting as a High Court judge, observed that while the fact of the contractual right did not take the issue of costs outside the court’s normal discretionary regime, the court would normally exercise that discretion in line with the contractual right, unless it has a particular reason not to do so.

“Thus, in Bank of Baroda v Panessar [1987] 1 Ch 335 at 355E-F, to which I was referred, the court regarded a contractual entitlement to ‘all costs’ as the same as saying that such costs should be assessed on an indemnity basis.”

He awarded the claimants’ costs of the determining application of £200,691 and their other costs of the action of £166,984. “There is in my judgment no reason to depart from the presumption in CPR 44.5 that the claimants’ costs have been reasonably incurred and are reasonable in amount.” In any event, he held that they were reasonably incurred and reasonable in amount.

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