Costs issues can arise at any point, before, during or after litigation. When a small, discrete point crops up it’s the temptation of many litigators to try and deal with the issue themselves. After all how hard can it be? This approach can lead to some peril, as was highlighted in the recent case of Dana Gas PJSC v Dana Gas Sukuk Ltd & Ors [2018] EWHC 332.

In this case the fifth Defendant, Blackrock Global Allocation Fund INC, was the successful party at a preliminary issues trial. The Claimant was ordered to pay the Fifth Defendant’s costs. There were also three interim applications, on which the Fifth Defendant was the successful party. The Fifth Defendant made an application, pursuant to Civil Procedure Rule 44.2(8), for an interim payment on account of costs in respect of the costs of the preliminary issues trial and two applications on which they had succeeded. In support of this they provided an estimate of their costs in relation to the preliminary issues trial, in the sum of £408,000.00. They sought a payment on account of costs in the sum of £244,800.00 or 60% of the total costs incurred. The also presented a costs estimate In respect of the applications in the sum of £1,473,087.00 and sought an interim payment of £862,252.20 or 60% of the costs claimed.

The application was not opposed in principle, indeed the wording at CPR 44.2(8) creates a rebuttable presumption in favour of the fifth Defendant. The Claimant instead took issue with the amount, submitting that the sums claimed were excessive and disproportionate.

In considering what level of interim costs to award Leggatt LJ began with the tried and tested method of estimating the likely level of costs recoverable on detailed assessment, and then reducing this to create a margin of error. Unusually, he then set about a critique of the fifth Defendant’s costs. He was critical of the hourly rates claimed, as high as £946.00 hour. He also considered the importance of the litigation and the level of Counsel’s brief fee.

When all of the above was considered he stated that the likely level of recoverable costs in respect of the preliminary trial were in the region of £200,000.00 – £250,000.00 and then reduced the amount of the award to £175,000.00. In respect of the application, the judge considered the recoverable costs to be between £300,000.00 – £400,000.00. He then reduced this figure to £250,000.00.

The key to this case seems to have been the judge’s consideration of the level of recoverable costs. The Fifth Defendant does not appear to have anticipated difficulties with the level of costs claimed and provided any written submissions. In this case written submissions on costs are likely to have given the judge more to consider in relation to the key issues and reasons why the costs are as claimed. This may well have led to a better recovery for the Fifth Defendant.

At MRN we are also available to help you with any costs issues that arise, no matter how small you think they might be. With our expert advice you can be confident of your position and seek to maximise the legal costs recovery for you and your client.


Stephane Osborne