Costs News

28 April 2021
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News in brief - 29.04.2021

High Court issues indemnity costs warning

A High Court judge has stressed that a party recovering costs on the indemnity basis still cannot recover those sums unreasonably incurred.

In Louis Dreyfus Company Suisse S.A. v International Bank of St. Petersburg (Joint-Stock Company) [2021] EWHC 1039 (Comm), Mr Justice Calver described the claimant’s claim for £292,066 in costs as “surprisingly large, despite the fact that there have been three unopposed hearings”.

He continued: “On a taxation I am sure that the costs would be heavily taxed down, even after the application of the receiving party presumption…

“It is, of course, the entitlement of the claimant (and any claimant) to appoint counsel of its choice and here to appoint leading counsel, Mr Houseman QC, who has conducted and presented the case throughout with his customary skill, rather than instructing him with junior counsel and allowing the bulk of the work to be carried out by junior counsel.

“However, that does not mean that the claimant should be entitled to recover from the defendant, even on an indemnity basis, costs which are significantly greater in amount than it might otherwise reasonably have incurred, whilst still having its case conducted and presented proficiently.

“In all the circumstances, I consider that the appropriate sum to award on an indemnity basis is £200,000.”

 

Absence of costs schedule makes judge’s life difficult

A High Court judge has been forced to take a “precautionary approach” when ordering an interim payment on account of the costs in the absence of a costs schedule.

In Cobussen Principal Investment Holdings Ltd v Akbar and Ors [2020] EWHC 3628 (QB) – handed down at the end of December but only just published – Mr Justice Edis said: “It does seem to me that the claimant's bill of costs is very substantial and that it is not presented in a way which makes it easy to form a view, even provisionally, about how much is likely to be recovered.

“A statement of Mr Sohail's personal account with the claimant's solicitors is not the same thing as a costs schedule showing the costs which the claimant has incurred in the prosecution of these proceedings.

“I note that the costs order which I made in respect of the disclosure application in the sum of £35,828 on 24 August 2020. The absence of a costs schedule means that I have no way of knowing which items have been covered by that sum, and what remains outstanding and why. I intend therefore to take a precautionary approach to the interim payment.”

 

Costs of £450,000 for one-day JR “disproportionate”

Costs of £450,000 for a one-day hearing in a complex judicial review case appear disproportionate, a High Court judge has ruled.

In Good Law Project Ltd v Minister for the Cabinet Office [2021] EWHC 1083 (TCC), Mrs Justice O’Farrell was ruling on an application for a costs-capping order made by the Good Law Project in a procurement challenge to a contract handed out by the Cabinet Office.

Having decided an order was appropriate, the judge was faced with the claimant seeking a cap of £100,000 for each party and the defendant asking for a £200,000 cap for the claimant’s liability and £50,000 for its own.

She ruled: “In this case, the difficulty faced by the claimant is the very large estimate of the defendant's likely costs in this case, namely in excess of £450,000. As Mr Moser submitted, these claims can be expensive to fight. This is not a straightforward judicial review case. It is, in essence, a procurement challenge, and the nature of the allegations made mean that the defendant will incur significant costs through the necessary factual investigation and disclosure exercises.

“Regardless of that, these costs are still very high. Without further explanation from the defendant, I consider that they appear to be disproportionate for a one-day hearing, even in a complicated procurement case.”

She capped each party’s costs liability at £120,000.

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