Costs News

09 May 2019
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News in brief - 09.05.2019

Costs “can be awarded” in foreign currency

The court has jurisdiction under section 51 of the Senior Courts Act 1981 and CPR 44.2 to make an order for costs in a foreign currency on summary assessment, a deputy High Court judge has ruled.

John Kimbell QC held that there was no basis for reading into the court’s wide discretionary powers to award costs a restriction that an award must be in sterling. “To imply such a restriction would be contrary to the case law on foreign currency judgments as it has developed in the 42 years since the decision in Miliangos v George Frank (Textiles) Ltd [1976] AC 443,” he said.

In Cathay Pacific Airlines v Lufthansa Technik [2019] EWHC 715 (Ch) – in which the defendant’s solicitors charged in Euros – Mr Kimbell said the court must determine which currency most truly reflects the claimant’s loss and therefore the currency in which it is most appropriate to compensate the receiving party for the costs which it has incurred.

“This approach is in accordance with principles set out The Folias [1979] AC 685 and The Dione [1980] 2 Lloyd’s Rep 577. It is also consistent with the indemnity principle which underlies awards of costs in England.”

He said any party seeking a costs award in a foreign currency should give proper notice of its intention to do so, explain the factual basis for seeking such an award in that currency and provide the court with a sterling equivalent of the sums claimed.

 

Master entitled to take account of estimate which client did not rely on

A master conducting a detailed assessment of solicitor and client costs was entitled to take into account solicitors' costs estimate and use it as a "yardstick" for assessing the reasonableness of additional costs, even where the client had not relied on it, the High Court has ruled.

According to a Lawtel report of Howard Kennedy LLP v Spartafield Ltd, the master noted the client's repeated instructions that the soliticitors should control the costs because they were unlikely to be recoverable from the other party in the litigation. He found that the client had not relied on the estimate, but that the solicitors had failed to update it at any point before its final invoice.

The master used the costs estimate as a yardstick for assessing the reasonableness of the additional costs billed by the solicitors, allowing certain additional costs for disclosure and trial preparation, but not others.

The report said Deputy High Court Judge Clare Ambrose held that, in using the costs estimate as a yardstick, the master had used similar language to that in Leigh v Michelin Tyre plc. It continued: “A judge could take into account an estimate in addressing the reasonableness of new and expected costs. It was relevant that the master had found that the appellant had failed to update its estimate, contrary to the requirements of professional regulations, and that it had been responsible for some of the new work due to the failures of disclosure.

“The master had not used the estimate to block costs recovery for new matters; the appellant had been allowed to recover 185% of its costs estimate. The yardstick was not a strict table of conversion, but rather a potentially useful tool to measure the reasonableness of later costs.

“The original estimate had been of some use in showing the extent of counsel's role and the limited extent of the firm's planned role, as seen only three months before trial. It had not been the sole factor and had not dictated what costs were found to be recoverable. The decision had been open to the master and was fair.”

 

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