The Cultural Foundation (doing business as American School of Dubai) v Beazley Furlonge Ltd (as managing agent for Syndicate AFB 2623/623 at Lloyd's)
| Jurisdiction | England & Wales |
| Judge | Mr Andrew Henshaw,Andrew Henshaw |
| Judgment Date | 03 October 2018 |
| Neutral Citation | [2018] EWHC 2548 (Comm) |
| Docket Number | Case No: CL-2016-000727 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 03 October 2018 |
[2018] EWHC 2548 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Mr Andrew Henshaw QC
(sitting as a Judge of the High Court)
Case No: CL-2016-000727
James Brocklebank QC and Henry Moore (instructed by Covington & Burling LLP) for the First Claimant
Andrew Neish QC (instructed by Allen & Overy LLP) for the Second Claimant
Tom Weitzman QC and Richard Coplin (instructed by CMS Cameron McKenna Nabarro Olswang LLP) for the First Defendant
Peter Macdonald Eggers QC and Marcus Mander (instructed by Clyde & Co LLP) for the Third to Sixth Defendants
Mr Andrew Henshaw QC (sitting as a Judge of the High Court)
| (A) INTRODUCTION | 1 |
| (B) PRINCIPLES | 4 |
| (C) DISPOSITION OF COSTS | 10 |
| (D) SUMMARY ASSESSMENT/PAYMENT ON ACCOUNT | 18 |
| (E) INTEREST ON COSTS | 26 |
Andrew Henshaw QC:
(A) INTRODUCTION
This judgment deals with further matters of costs arising in this case. On 8 May 2018 I handed down judgment following a trial of ten preliminary issues ( [2018] EWHC 1083 (Comm)). The hearing of matters consequential upon that judgment took place on 12 July 2018, being the earliest date on which it was possible to convene a hearing that all four parties could attend. I dealt on that occasion with two applications for permission to appeal, and gave directions for the next stages of the action. The parties also made detailed submissions on the somewhat complex costs issues which arose, on which I subsequently handed down a judgment ( [2018] EWHC 2185 (Comm)). Those previous judgments set out the background to the case.
The parties were not able to reach agreement about the costs relating to the 12 July 2018 hearing, and proposed that they be dealt with based on written submissions pursuant to an agreed timetable.
Altogether the parties served more than 50 pages of written submissions. However, because the subject-matter is merely the costs of and relating to a one-day hearing of consequential matters, I do not consider that it would be proportionate to address here each and every point made. I have had careful regard to all the points made in the submissions, and set out below my reasoning on the key points in contention and my conclusions.
(B) PRINCIPLES
Having considered the rival submissions on these matters, I have concluded that I should follow the following approach when determining the incidence of costs in relation to the hearing on 12 July 2018 and the associated preparatory work.
First, and generally, I have regard to the applicable general principles set out in §§ 28–33 of my costs judgment dated 15 August 2018, derived from CPR 44.2 and the relevant case law and White Book notes.
Secondly, the costs of the part of the hearing on 12 July 2018 relating to directions for the future conduct of the case (including the associated preparatory work) should in my view be costs in the case, rather than being allocated in accordance with the outcome of the preliminary issues trial. These costs relate to the litigation as a whole rather than specifically to the preliminary issues, and should ultimately be allocated accordingly.
Thirdly, I consider that there should be no order as to costs as regards the unsuccessful applications for permission to appeal made on 12 July 2018 (including the associated preparatory work). Clearly the unsuccessful applicants should not recover those costs. Conversely, whilst the court sometimes hears from respondents to such applications, it does not generally require respondents to make submissions against the grant of permission. I note that note 52.3.6 of the White Book indicates that one advantage of applying to the first instance judge for permission to appeal is that “an application at this stage involves neither party in additional costs”. At least in the present case I do not consider it appropriate to order costs in favour of the respondents.
Fourthly, some costs-related issues – including the allocation of costs between the different preliminary issues – had to be addressed for the purposes of both: (a) the position as between the Claimants and Beazley, and (b) the position as between the Claimants and Excess Insurers. (As to (b), ASD says the principal issue between ASD and Excess Insurers was as to the allocation of costs between the different preliminary issues.) I do not consider it appropriate to allocate such costs – as ASD has proposed, in its suggested 95%/5% split – almost entirely to (a) with only the incremental costs required solely by Claimants/Excess Insurers issues being allocated to (b). I do not think the fact that ASD sought costs from Beazley but not from Excess Insurers provides sufficient reason to treat (a) rather than (b) as the reason for the costs having been incurred. Instead, I think it fair to seek to form a view, even if only on a fairly rough and ready basis, as to how the costs are likely to have split as between (a) and (b).
Fifthly, the costs should in my view be allocated having regard to the relative degrees of success on the costs issues themselves, by reference to the position the parties took on those issues. That is not necessarily the same as their relative degree of success on the preliminary issues themselves. It is also not necessarily the same as the percentages of costs that were allocated to the parties in my judgment of 12 July 2018. For example, it was always clear and accepted that Beazley would be a paying party. It does not follow that Beazley should automatically be the paying party as regards the costs issues themselves: rather, that depends on relative degrees of success on those issues, by reference to the positions the parties took on the costs issues. For the same reasons, I do not consider ‘costs in the case’ to be the appropriate order in respect of...
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