...

Lawyers and businesses

can now enjoy a greater
measure of certainty
regarding the recovery
of their costs...

ASSESSMENT
OF
COSTS GUIDE
EDITION 1
Successful receiving
@difccourts difccourts difccourts
parties have been
www.difccourts.ae
awarded 85.32% of their
requested costs
Contents
Purpose 5

Disclaimer 5

Flowchart for Detailed Costs Assessment Proceedings 6

Introduction 7
Types of Legal Costs 7

Basis of Assessment 7
Standard Basis 7
Indemnity Basis 7

DIFC Courts Approach to the Assessment of Costs 8
Costs Assessment Applications Award Rate since 2009 8
Proportionality and Reasonableness 8
Proportionality Test 9
Interim Payments on Account of Costs (RDC 38.13) 9
Costs for Detailed Assessment Hearings 10
Enforceability of costs assessment outcome 10

Selected Costs Assessments Cases 11

CFI 036-2014 Vaninn Capital PCC PLC v. Mr. Rafed Abdel Mohsen
Bader Al Khorafi and others - 19 November 2015 11
CFI 019-2013 Robertos Club LLC and others v. Paolo Roberto Rella
- 2 July 2015 12
CFI 023-2009 Hussain Saleh-Farid Al-Awlaqi and others v.Tabarak
Partners LLP and others - 22 December 2010 13
CFI 043-2014 DNB Bank ASA v. Gulf Eyadah Corporation and
others - 18 July 2016 15
DWT 018-2010 Technical Architects General Contracting Company
LLC v Nakheel PJSC 13 September 2012 16
DWT 0002-2014 Gulf Boats Trading v. Drydocks World Dubai LLC
-12 August 2015 17

3
 Analysis of Selected Cases 18
General 18
Use of Senior Lawyer and Expert Witness 18
Preventing a Further Incurrence of Costs 18

Guidelines for Lawyers 19

Principles in Costs Assessment Process 19
Fees and Charges 19
Costs for Senior Lawyer 19
In House Services 20
Expert Witnesses and Consultants 20
Excessive Time 20

Conclusion 20

References and Resources 21

DIFC Courts Website 21

Resources 21
Books 21
Websites 22

4
Assessment of Costs Guide
DIFC Courts Registry

Purpose
This Assessment of Costs Guide (Guide) is a resource prepared by the DIFC Courts Registry. It is intended
to serve as a guide for legal practitioners to better advise their clients on DIFC Courts approaches to the
assessment of costs and the basis of assessment. Lastly, the Guide draws some useful points to be gleaned
from selected costs-assessment precedents of the DIFC Courts (the Court) and Dubai World Tribunal and
guidelines for lawyers when submitting costs claims.

Disclaimer
For the avoidance of doubt, the contents of this Guide are for reference purposes only and they do not
constitute a protocol or set of rules which are binding on the DIFC Courts. This Guide is not meant to fetter the
DIFC Courts exercise of its discretion in the costs assessment process.

Users should use this Guide in conjunction with the following:

Rules of the DIFC Courts (RDC) Parts 38 to 40;

Practice Direction No. 2 of 2017 Third Party Funding in the DIFC Courts;
Practice Direction No. 1 of 2017 Indemnity Costs for Failed Challenges to Arbitral Awards in the
DIFC Courts;
Registrars Direction No. 1 of 2017 Indicative Hourly Charges;
Registrars Direction No. 3 of 2015 DIFC Courts Fee Schedule Clarification;
Practice Direction No. 4 of 2015 DIFC Courts Fees;
Practice Direction No. 5 of 2014 DIFC Courts Costs Regime;
Practice Direction No. 4 of 2014 DIFC Courts Wasted Costs Orders;
Practice Direction No. 5 of 2011 General Rules about Costs (Cost Order in Favor of Party
represented Pro Bono); and
Law reports of the selected costs-assessment precedents.

(1)Rules of the DIFC Courts (RDC) are available at: http://difccourts.ae/rules-2/; Registrars and Practice Directions are available at http://difccourts.ae/
publications/directions/.

5
 FLOWCHART FOR DETAILED
COSTS ASSESSMENT PROCEEDINGS
Receiving Party gets an
order for costs (i.e. is
awarded costs) at the
end of proceedings
(date of judgment).
Receiving Party
commences detailed
assessment proceedings by
serving on the Paying Party
notice of commencement in
Form P40/01 and a copy
of the bill of costs within
3 months after the date
of judgment (the period)
(RDC 40.5 and 40.10).
Receiving Party to file a
request for a detailed
assessment hearing and
must file the request within
3 months of the expiry
of the period (RDC 40.29
to RDC 40.30).
6
Receiving Party files
Statement of Costs
(Form P38/01) at Court
and serves on Paying
Party (RDC 38.35 to
38.36).
Paying Party to serve points
of dispute within 21 days
after the date of service of the
notice of commencement (RDC
40.15).
If the period set out in RDC 40.15
for serving points of dispute has
expired or Receiving Party has not
been served with any points of
dispute, the Receiving Party may
file a request for a default costs
certificate (RDC 40.17).
Detailed Assessment Hearing
Paying Party is unable to
agree to the Receiving
Partys amount of costs.
Receiving Party may
serve a reply and must
do so within 21 days
after service on him of
the points of dispute to
which his reply relates
(RDC 40.28).
If the Paying Party
and the Receiving
Party do not want a
detailed assessment
hearing, the matter will
be determined by the
Court on the papers.
Introduction
1. RDC Parts 38 to 40 deal with the general rules relating to costs assessment. At the conclusion of
proceedings, the winning party will usually be awarded costs, which include fees, charges,
disbursements, expenses and remuneration incurred for the entire case. The winning party who is
entitled to costs is referred to as the receiving party and the unsuccessful party who is liable to
pay costs is referred to as the paying party.

Types of Legal Costs

2. There are two main categories of costs:

a. Party and Party Costs: These are costs which may be recovered by the receiving party in
proceedings from the paying party to recover all costs reasonably incurred in the pursuit of
the claim or defence of the proceedings.

b. Lawyer and Client Costs: These are costs which a lawyer claims from his own client as a result
of work done or services provided in proceedings.

Basis of Assessment

3. Where the Court is to assess the amount of costs (whether by immediate or detailed assessment) it
will assess those costs either on the standard basis or on the indemnity basis (RDC 38.17). It should
be noted that the Court will not in either case allow costs which have been unreasonably incurred or
are unreasonable in amount.

Standard Basis

4. Where the amount of costs is to be assessed on the standard basis, the Court will resolve any doubt
which it may have as to whether costs were reasonably incurred or reasonable and proportionate in
amount in favour of the paying party (RDC 38.18).

5. Where the Court makes an order about costs without indicating the basis on which the costs are to
be assessed, or the Court makes an order for costs to be assessed on a basis other than the standard
basis or the indemnity basis, the costs will be assessed on the standard basis (RDC 38.20).

Indemnity Basis

6. Where the amount of costs is to be assessed on the indemnity basis, the Court will resolve any doubt
which it may have as to whether costs were reasonably incurred or were reasonable in amount in
favour of the receiving party (RDC 38.19).

7
DIFC Courts Approach to the Assessment of Costs
Costs Assessment Applications Award Rate since 2009
7. Based on detailed assessment of costs applications heard by the DIFC Courts and Dubai World
Tribunal since 2009, the aggregate amount of costs requested stands approximately at USD 8,941,755.

8. Successful receiving parties have been awarded on average 85.32% of their requested costs or
USD 7,629,517 by the DIFC Courts and Dubai World Tribunal when costs were assessed on the standard
basis.

Recovery Rate of costs for applications sent for DIFC Courts and
Dubai World Tribunals Assessment

14.68%

Amount awarded
Amount not awarded
85.32%
Recovery Rate

Proportionality and Reasonableness

9. The Court adopts a flexible approach to costs which is based on the following two basic principles.
Firstly, the award of costs is at the discretion of the Judge, or the Registrar. Secondly, as a general rule,
the successful party in the proceedings should have his or her costs.

10. The Court in assessing costs on the standard basis will decide if the costs were proportionately and
reasonably incurred and proportionate and reasonable in amount (RDC 38.21). Further, in assessing
costs on an indemnity basis, the Court will decide if the costs were unreasonably incurred or unreasonable
in amount (RDC 38.21). In particular, the Court must give effect to any orders which have already
been made (RDC 38.22).

11. The Court, per RDC 38.23, will take into account the following factors in making assessment of the costs:

8
 a. The conduct of all the parties, including in particular, the conduct before, as well as during,
the proceedings, and the efforts made, if any, before and during the proceedings in order to
try to resolve the dispute;

b. The amount or value of any money or property involved;

c. The importance of the matter to all the parties;

d. The particular complexity of the matter or the difficulty or novelty of the questions raised;

e. The skill, effort, specialised knowledge and responsibility involved;

f. The time spent on the case; and

g. The place where and the circumstances in which work or any part of it was done.

Proportionality Test

12 . In applying the test of proportionality the Court will give due regard to the overriding objective per
RDC 1.6(3) in which the Court will deal the case, so far as is practicable, in ways which are proportionate
to the following:

a. The amount of money involved;

b. The importance of the case;

c. The complexity of the issues; and

d. The financial position of each party.

13. It should be noted that the relationship between the total of the costs incurred and the financial value
of the claim may not be a reliable guide (RDC 38.24).

14. At the same time, a fixed percentage cannot be applied in all cases to the value of the claim in order
to ascertain whether or not the costs are proportionate (RDC 38.24).

Interim Payments on Account of Costs (RDC 38.13)

15. RDC 38.13 provides that where the Court has ordered a party to pay costs, it may order an amount
to be paid on account before the costs are assessed.

16. DIFC Courts Practice Direction No. 5 of 2014 DIFC Courts Costs Regime provides that where the
Court has ordered a party to pay costs subject to detailed assessment unless agreed, it will order
50% of the amount claimed in the statement of costs to be paid on account before the costs are
assessed, unless the Court sees fit to order otherwise.2

(2) Available at: http://difccourts.ae/practice-direction-5-2014-difc-courts-costs-regime/.

9
 Example Cases applying RDC 38.13
1. In CFI 026-2009 Rafed Abdel Mohsen Bader Al Khorafi and others v. Bank
Sarasin-Alpen (ME) Limited and others (30 October 2014),3 Deputy Chief Justice
Sir John Chadwick at [21]-[22] stated that it is common practice in the DIFC Courts, as
in other Courts exercising a commercial jurisdiction, to recognise that a party who has
obtained the benefit of an order for costs in his favour should not be kept out of his money
longer than is necessary while the process of assessment grinds through.

2. In CFI 023-2009 Hussain Saleh-Farid Al-Awlaqi and others v. Tabarak Partners

LLP and others (22 December 2010),4 Justice David Williams at [65] stated that the
interim costs certificate and the interim payment procedure are separate and distinct and
there is no basis for reading into the unqualified language of Rule 38.13 that an interim
payment is inappropriate where the detailed costs procedure is being followed.

3. An application can be properly heard and decided by a Judge other than the trial Judge
as long as the Court is sufficiently acquainted with the case; in cases where the Judge has
approximately the same information as the trial Judge, the Court should on a rough and
ready basis also normally order an amount to be paid on account, the amount being a
lesser sum than the likely full amount to the receiving party: at [71] in applying the principles
laid out in Mars UK Ltd v Teknowledge Ltd [2000] FSR 138.5

4. There should be an interim payment in general. However, the Court has a discretion.
In exercising that discretion the Court must take into account all the circumstances of
the particular case and the overriding objective of enabling the Court to deal with the cases
justly. These include the financial position of the parties, and the likelihood and prospects
of any appeal. The need of the receiving party for the money in order to respond to an
appeal by the paying party would be a particular good reason for ordering a payment
on account.6

Costs for Detailed Assessment Hearings

17. Detailed assessment hearings incur additional costs, as provided for by the DIFC Courts FeesSchedule.7
However, Parties will be entitled to a 50% refund if they settle in full and advise the Court within 21
days of the date of the detailed assessment hearing.

Enforceability of costs assessment outcome

18. After assessment, the judge or registrar will issue a costs-order and this order shall be regarded as a
judgment or order for the payment of money8. The successful receiving party (or creditor) can take
enforcement action against the paying party (or debtor) for the payment of costs pursuant to RDC Part
45 - General Rules about enforcement of judgments and orders.

(3) Available at: http://difccourts.ae/cfi-026-2009-1-rafed-abdel-mohsen-bader-al-khorafi-2-amrah-ali-abdel-latif-al-hamad-3-alia-mohamedsulaiman-

al-rifai-v-1-bank-sarasin-alpen-limited-2-bank-sarasin-co-ltd/.
(4) Available at: http://difccourts.ae/cfi-0232009-hussain-saleh-farid-al-awlaqi-andrew-tamplin-clout-and-tabarak-partners-llp-khuram-hussainziad-naim-bayaa/.
(5) Ibid
(6) Ibid
(7) Available at: http://difccourts.ae/wp-content/uploads/2015/05/COURT-FEES-AUGUST-2015_3.pdf , although these are intended to be amended shortly.
(8) RDC Part 45.2(4) reads: judgment or order for the payment of money includes a judgment or order for the payment of costs, but does not
include a judgment or order for the payment of money into Court .

10
Selected Costs Assessment Cases

CFI 036-2014 Vaninn Capital PCC PLC v. Mr. Rafed Abdel Mohsen
Bader Al Khorafi and others - 19 November 2015

BACKGROUND OF THE CASE

The Claimant, Vannin Capital, which provides funding for parties in commercial litigation, entered into
a funding agreement with the First through Third Defendants in relation to the pursuit of CFI-026-2009.
When the First through Third Defendants discharged the Fourth Defendant of legal representation and
a replacement payment receipt mechanism per the funding agreement was not finalised, the Claimant
filed a Part 8 Claim with the Court in accordance with RDC 8.38 and 23.15 to protect and preserve
its interest in the funding agreement. Specifically, the Claimant sought an order pursuant to RDC
25.12 that a sum of USD 10,451,723 plus interest be paid into the Court by the Fifth and Sixth
Defendants and shall not be paid to any other party until an order of the Court is made. Consequently,
H.E. Justice Omar Al Muhairi issued an order that the sum of USD 11,445,049 with interest awarded
to the First through Third Defendants by the Order of Deputy Chief Justice Sir John Chadwick be paid
into the Court by the Fifth and Sixth Defendants and held until further instruction of the Court as to
whom and in what amount payments shall be made.

In response to the Order, the First through Third Defendants claim that no jurisdiction exists for the DIFC
Courts to hear this matter, arguing that the funding agreement states that any dispute arising out of or
in relation to the agreement lies with the Courts of England & Wales. The Court dismissed this
argument and referred to Clause 17.1.3 of the funding agreement that contains a DIFC-LCIA Arbitration
Clause to resolve disputes relating to the amounts payable and ruled that the DIFC Courts do in fact
have jurisdiction to hear and determine the Claimants Part 8 Application, notwithstanding the
governing law paragraph.

As to the final issue of costs, the Court ruled that the First through Third Defendants must pay the
Claimant and the Fourth Defendant 50% of the costs incurred as a result of both applications, to be
subject to detailed assessment if not agreed. (USD 48,721.61).

COSTS AMOUNT REQUESTED

USD 48,721.61

POINTS OF DISPUTE ON COSTS

Whether (i) costs were grossly excessive; and (ii) the use of senior lawyer/counsel was justified.

11
 The Defendants claimed that the bill of costs was grossly excessive in relation to a dispute which only
comprised a half day hearing which was settled by consent. Moreover, the hearing was short and
did not require senior counsel. Furthermore, the total number of hours allocated to the preparation of
documents, which amounted to 61.5 hours, was deemed to be plainly excessive for the simple and
uncomplicated nature of the application. Finally, the allocation of the preparation of a simple and
uncomplicated hearing should not have been twice the time that was allocated to Court. The
remaining issue as to jurisdiction, in respect of which the Claimant succeeded, was a simple argument
that was capable of being addressed by a junior level practitioner with an average level of skill.
Accordingly, a one day allocation of time would have been more proportionate and reasonable.

AMOUNT AWARDED
USD 48,721.61

REASONS FOR AWARD

The assessment by the Registrar indicated that work performed by senior counsel was justified,
as adding new people could be detrimental to efficiency. Moreover, the use of overseas Counsel,
which the Defendant deemed as costly and unnecessary, actually may have decreased costs. The
aforementioned reasons led to the full allowance of the expenditure (USD 48,721.61).

CFI 019-2013 Robertos Club LLC and others v. Paolo Roberto

Rella - 2 July 2015
BACKGROUND OF THE CASE
The Defendant was discharged from his position as shareholder by the 2nd Claimant due to breaches
of the employment contract and alcohol policy of the 1st Claimant. He was later ordered to transfer
a certain amount of company shares to the 2nd Claimant as the legal and beneficial owner of these
shares. The Defendant was ultimately held liable to pay for the Claimants and Part 45.7 9 Applicants costs.

CLAIM VALUE10
USD 106,803.84

COSTS AMOUNT REQUESTED

USD 627,762

POINTS OF DISPUTE ON COSTS

Whether (i) costs were disproportionate to the amount in dispute; (ii) there was duplication of work done by
the lawyers; and (iii) the use of senior lawyer/counsel was justified.

(9) RDC 45.7 on Enforcement of judgment or order by or against a non-party reads: If a judgment or order is given or made in favour of or against a person
who is not a party to proceedings, it may be enforced by or against that person by the same methods as if he were a party.
(10) The claim value has been added where applicable, as a number of the detailed costs assessments cited derive from Part 8 applications.

12
 The Defendant claimed that costs had the appearance of disproportionality on a global basis and
were disproportionate to the amounts in dispute and the work which was reasonably required in
order to bring about a resolution of the matter. Moreover, the Defendant contended that there was
considerable overlap and duplication of time and effort between the various legal team members
and that certain aspects of the litigation did not warrant the attention of senior fee earners.

The Claimants rejected the Defendants general criticisms and contended that they would not describe
their costs as disproportionate, as the total costs claimed by the Claimants were substantially less than
the Defendants own costs in the same proceedings. Furthermore, counsel for the Claimants argued
that the Claimants had incurred substantial additional costs subsequent to the Defendants refusal to
admit breach of the 1st Claimants alcohol license and internal policies until cross-examination at trial.

AMOUNT AWARDED
USD 699,301*

*Inclusive of costs of assessment proceedings: USD 27,195 and assessment fee: USD 47,082

REASONS FOR AWARD

The Registrar voiced his concern at the Defendants choice of pursuing detailed costs proceedings in
the light of DIFC Courts Practice Direction Number 5 of 2014 on the DIFC Courts Costs Regime, in
particular Part 8 which provides as follows: Mediation 8. In exercising its discretion as to costs, the
Court may take into account parties conduct in relation to any attempt at mediation or any other
means of alternative dispute resolution. Moreover, parties are encouraged to seek mediation in the
context of costs liability.

One of the issues raised by the Claimants Counsel was the unwillingness of the Defendant to settle
costs, resulting in further accumulation of costs by the Claimants. The suggested costs settlement
would have been less than the amount they were ultimately ordered to pay.

Furthermore, the Registrar was of the opinion that several concerns relating to costs should have
perhaps been voiced earlier in points of dispute and not in the final detailed assessment hearing. The
entire cost of the Claimants Senior Counsels attendance was not awarded, however, the Claimants
were able to successfully rebut the Defendants proposition that their costs were disproportionate.

CFI 023-2009 Hussain Saleh-Farid Al-Awlaqi and others v. Tabarak

Partners LLP and others - 22 December 2010

BACKGROUND OF THE CASE

The Applicants filed a claim against the Respondents for various breaches of partnership law and
partnership agreement.

13
COSTS AMOUNT REQUESTED
AED 500,000 (USD 136,128)

POINTS OF DISPUTE ON COSTS

Whether (i) interim payments should normally be ordered; and (ii) the costs were excessive, unreasonable and
disproportionate.

The Respondents claimed that interim payments for costs were only granted in the most exceptional
circumstances.

The Respondents served the points of dispute, suggesting that AED 387,099.25 would be appropriate
as the Applicants costs.

An open letter was subsequently served on the Applicants, offering a global costs settlement in
the amount of AED 500,000, subject to certain conditions.

AMOUNT AWARDED

AED 450,000 (USD 122,515)

At the cost-hearing, the Judge held that there is no presumption that interim payments orders should
be made only in exceptional circumstances. In other words, interim payments could normally be
ordered.

It was held that the amount of AED 450,000 was the final amount to be awarded towards the
Applicants interim costs.

This sum was close to a midpoint between the amount offered in the open letter and the amount that
the Respondent believed was appropriate, AED 500,000 and 387,099.25 respectively.

REASONS FOR AWARD

There was no dispute that the Applicants were entitled to their interim costs as the Respondent
had not brought an appeal against the order. Furthermore, the Respondents had deemed the
sum of AED 387,000, an appropriate figure as to the interim costs of the Applicant. However, in an open
letter to the Applicant they had suggested that AED 500,000 was also appropriate.

14
CFI 043-2014 DNB Bank ASA v. Gulf Eyadah Corporation and others
- 18 July 2016

BACKGROUND OF THE CASE

The Claimant sought to recognise an English judgment issued on 30 September 2014 against the
Defendant who had owed the Claimant a significant sum for more than two years and had not paid it.
The Claimant sought payment of the sum with interest and all the legal costs incurred. The Claimant
also sought payment on the amount ordered in the previous English judgment with 8% interest.

COSTS AMOUNT REQUESTED

USD 100,000 for the whole legal proceedings (or at minimum USD 25,000)

POINTS OF DISPUTE ON COSTS

Whether (i) an order of interest should be ordered if the original (English) order did not do so; and (ii) costs
should be paid for the entire proceedings if costs at the Court of First Instance had already been paid.

The Defendant claimed that it was inappropriate under RDC 45.26 to claim the 8% interest and
interest should be calculated in accordance with the EIBOR rate.

The Defendant argued that the costs in respect of proceedings before the Court of First Instance had
been paid, so only the costs in relation to the Court of Appeal should be sought.

The Defendant also maintained that costs requested by the Claimant were exaggerated and that
senior lawyers had worked on matters that could have been dealt with by a paralegal.

AMOUNT AWARDED
USD 25,000

REASONS FOR AWARD

The Judge held that the DIFC Courts could not order interest if the English court who issued the original
order did not so. The Defendants were instead ordered to pay to the Claimant interest of 1% over
EIBOR from the date of the order.

The Defendant was to pay for the legal costs of the initial claim form, the Court of Appeal, and the
application before that Court and not the entire proceedings.

15
DWT 018-2010 Technical Architects General Contracting Company
LLC v Nakheel PJSC 13 September 2012

BACKGROUND OF THE CASE

The Claimant contractor entered into a contract with the Defendant for the construction of residential
buildings. Following a dispute over a construction contract, both parties entered into a settlement
agreement. No payments were made, and the Claimant issued proceedings. A default judgment was
entered in the Claimants favour and the Defendant applied for an order setting aside the default
judgment but that application was refused. The Defendant also made an application for an order that
the default judgment should be varied and claimed for loss of profit but that was disallowed.

CLAIM VALUE
USD 20,070,644

COSTS AMOUNT REQUESTED

AED 527,000 (USD 143,475)

POINTS OF DISPUTE ON COSTS

Whether (i) costs were disproportionate and exaggerated; (ii) work done by senior partners ought to be done
at a more junior level; and (iii) the use of an expert was necessary.

The Defendant argued that the legal costs claimed were disproportionate and exaggerated. Also,
the claim had been reviewed by senior partners, while the work ought to have been done at a more
junior level. The Claimant had used a lot of construction experts.

The Claimant replied to the points of dispute by referring to the claim value, which was AED 50 million.
That kind of claim should only be reviewed by senior partners. Also, expert opinions had been
necessary in the case.

AMOUNT AWARDED

AED 412,000 (USD 112,166).

REASONS FOR AWARD

The Registrar found the costs claimed reasonable and proportionate generally according to the claim
value.

The use of construction experts was justified.

16
DWT 0002-2014 Gulf Boats Trading v. Drydocks World Dubai LLC
-12 August 2015

BACKGROUND OF THE CASE

The Claimant, Gulf Boats Trading, a sole establishment, and the owner of a motorised dhow, known
as the Al Zahabi sought maintenance services provided by the dock operator Defendant, through
subsidiaries of a wet and dry dock facility at Al Jadaf, Dubai Creek. The work was maintained by a
third-party contractor (Gulf Star) not involved in the proceedings. The vessel sank, due to failure of the
contractor to fix it without valid reasons.

The Claimant sought compensation for damages caused, plus loss of profits that would have been
earned by the vessel.

CLAIM VALUE
USD 272,479.56

COSTS AMOUNT REQUESTED

AED 965,852.25 (USD 262,959)

POINTS OF DISPUTE ON COSTS

Whether (i) costs claimed were proportionately incurred; (ii) the use of a foreign lawyer was required; (iii) from
when should conversion of foreign exchange rates be calculated .

It is submitted by the Claimant that many of the costs claimed by the Defendant are disproportionately
and unreasonably incurred, and the high level of partner involvement has unnecessarily increased
costs, numbers of lawyers handling the matter on behalf of the Defendant, and rates of fee earners
claimed are disproportionate. Also, engaging a legal counsel based in the UK was unnecessary,
and the conversion rate of AED 6.356 per GBP is in bad faith.

The Defendant argued that the costs were justified as per the Registrars Direction No 1 of 2014
Indicative Hourly Legal Charges, and the involvement of partners was necessary due to the complexity
of the matter. External UK based Counsel was required due to the speculative nature of this matter.
Thus, it was entirely reasonable for the Defendant to instruct Counsel in this matter. As to the conversion
rates it is conceded that a global conversion rate of 6.356 should be readjusted to the specific rates
of exchanges as and when paid to Counsel.

AMOUNT AWARD
AED 995,774.12* (USD 271,099)

*Inclusive of costs of costs assessment proceedings and assessment fee: AED 173,188 (USD 47,149)

17
REASONS FOR AWARD
The costs were proportionate and reasonably incurred. The claimant was to pay for costs of proceedings
plus the costs towards the fees of the detailed assessment hearing.

Also, the exchange rate was counted depending on the date of payment to UK Counsel.

Analysis of Selected Cases

General
19. Each case will turn on its own facts. Whether the amount of costs to be awarded will be reduced or
increased is a fact-dependent exercise on the nature of the case, the value of the claim, and the
amount of the costs claimed.

20. If the paying party is not disputing the amount of costs, the Court will take this as an indication that the
amount is proportionate and reasonable.

Use of Senior Lawyer and Expert Witness

21. It is easier to decide whether the final costs are reasonable and proportionate in a simple and
straightforward case than one where the case is more complex. Thus, the Court will take into account
the work on the more complex case which had to be done.

22. The use of senior lawyers, including overseas ones, would be justified if this brings about greater
efficiency.

23. The use of expert witness would be justified if the case is particularly complex.

24. In these cases, the Court will most likely uphold the costs claimed in view of the cases complexity.
That being said, whether the party had permission to rely on that particular expert is highly relevant
but permission does not, in and of itself, mean that costs will be recoverable in full or at all. The Court
will not be endorsing disproportionate and unreasonable costs.

Preventing a Further Incurrence of Costs

25. The later the settlement, the higher the costs that will be incurred.

26. In the Courts exercise of discretion on costs assessment, the Court may take into account the parties
conduct such as whether parties have tried to resolve their disputes on costs through means such as
mediation before the costs assessment application.

27. It is encouraged that parties should attempt to resolve their disputes as early as possible to avoid a
further accumulation of costs.

28. Should a case be appealed successfully, the receiving party should detail the costs sought at each
stage of the proceedings.

29. Likewise, parties should inform the Court about all previous assessments carried out in the proceedings
in order for the assessment to be fair and reasonable.
18
Guidelines for Lawyers
Principles in Costs Assessment Process
30. Lawyers should aim to adopt the following principles in the costs assessment process:

a. The costs awarded shall not exceed those necessarily and reasonably incurred by the
receiving party in connection with the proceedings;

b. The assessment process should be fair to all parties concerned;

c. The assessment process should be efficient and effective for the parties and for the DIFC
Courts;

d. The assessment process should, as far as it is practically possible, provide the parties with the
certainty of result; and

e. The assessment process must maintain the flexibility necessary to ensure that costs awarded
are reasonable and proportionate in light of the particular circumstances of the proceedings.

Fees and Charges

Record Keeping
31. Lawyers should as far as it is practically possible keep accurate and detailed time records to support
a bill. The absence of these records may result in the disallowance or diminution of the charges
claimed.

32. Lawyers should also bear in mind that time records cannot be accepted as conclusive evidence that
the time recorded either has been spent, or, if spent, is reasonably chargeable.

33. In claiming sizable costs for disbursement, lawyers should be prepared to address and justify those
particular expenses.

Costs for Senior Lawyer

34. As a general practice, work which can be and should have been properly done by a more junior
lawyer will only be allowed at the junior lawyers rate.

35. In determining whether to allow costs for the senior lawyer, the following factors are considered:

a. Efficiency afforded by the senior lawyer in relation to the nature and complexity of the case;

b. The likely duration of the trial;

c. The importance of the case to the client;

d. The amount of damages likely to be recovered;

e. The general importance of the case in setting a precedent for future cases; and

f. Any other reasons why a senior lawyer may be required.

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In House Services

36. For work which is usually performed by the lawyers clerk which does not require the application
of legal skill such as making and answering phone calls, filing, photocopying etc., the receiving party
can only claim for that clerks work done which is necessarily and reasonably undertaken in connection
with the proceedings. The relevant clerks charges should be shown as a disbursement.

Expert Witnesses and Consultants

37. Witnesses fees are allowed on the basis of what is reasonable. In judging whether the time claimed
by an expert witness, or consultant is excessive, the Court will consider whether there has been any
overlap between the evidence prepared by the expert witness or consultant at earlier proceedings in
which evidence has already been provided.

Excessive Time

38. In judging whether the time expended by the lawyer under the circumstances is excessive or not, the
Court will take into account the following considerations:

a. The extent of the lawyers participation in relation to the degree of complexity of the issues for
which that participation is required;

b. The degree of responsibility assumed by the lawyer;

c. The duplication of tasks among the lawyers of the receiving party; and

d. Time claimed and awarded, globally, by specific service or both, in the proceedings.

Conclusion

39. The DIFC Courts adopt a flexible approach to costs assessment and generally allow costs which
have been reasonably and proportionately incurred to be recovered by the successful receiving
party.

40. Since 2009, the DIFC Courts and the Dubai World Tribunal have conducted costs assessments at the
amount of around USD 8,941,755 and awarded the successful receiving parties around 85.32% of
their requested costs.11

41. The DIFC Courts Registry hopes this Guide provides a clearer understanding as to the approach
which the Court adopts when carrying out costs assessments.

42. In the light of the above, lawyers and businesses can now enjoy a greater measure of certainty
regarding the recovery of their costs when bringing proceedings to the DIFC Courts.

(11) It should be stressed that this is just a guide of historical detailed costs assessments to date, and that parties should by no means expect to recover this
quantum of costs, as the ultimate award will of course depend on the particular facts of the case.

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References and Resources
DIFC Courts Website

Court Rules <http://difccourts.ae/rules-2/>

Practice Directions < http://difccourts.ae/publications/directions/practice-directions/>
Registrars Directions < http://difccourts.ae/publications/directions/registrar-directions/>

Resources
Books

Albert Kruger and Wilma Mostert, Taxation of Costs in the Higher and Lower Courts: A Practical Guide
(LexisNexis South Africa 2010)12

Gino Dal Pont, Law of Costs (3rd edn, LexisNexis 2013) 13

Jason Rowley and Middleton Simon, Cook on Costs 2017 (LexisNexis UK 2016)14

Lord Chief Justice Jackson, The White Book Service 2017 Volume 1 and 2 (Sweet & Maxwell 2017) 15

Peter Hurst, Simon Middleton and Roger Mallalieu, Costs & Funding following the Civil Justice Reforms:
Questions & Answers (3rd edn, Sweet & Maxwell, 2017)16

Mark M. Orkin, The Law of Costs (2nd edn, Canada Law Book 1987)17

Stuart Sime, A Practical Guide to Civil Procedure (19th edn, Oxford University Press 2016)18

(12) https://store.lexisnexis.co.za/products/taxation-of-costs-in-the-higher-and-lower-courts-a-practical-guide-skuZASKUPG1452
(13) https://store.lexisnexis.com.au/product?product=law-of-costs-3rd-edition&meta_F_and=9780409334784
(14) https://store.lexisnexis.co.uk/products/cook-on-costs-2017--skuCOC
(15) http://www.sweetandmaxwell.co.uk/Catalogue/ProductDetails.aspx?productid=719970&recordid=7161
(16) http://www.carswell.com/product-detail/costs-funding-following-the-civil-justice-reforms-questions-answers-3rd-edition/
(17) http://www.carswell.com/product-detail/the-law-of-costs-second-edition/
(18) https://global.oup.com/academic/product/a-practical-approach-to-civil-procedure-9780198747673?lang=en&cc=dk

21
Websites
Canadian Radio-television and Telecommunications Commission, Guidelines for the Taxation of Costs (Crtcgcca, 24
April2007) <http://www.crtc.gc.ca/eng/forms/form_301.htm> accessed21June2017

Court of Queens Bench, Canada, Costs Manual - Costs Between Parties (Albertacourtsca, 17 January 2011)
<https://albertacourts.ca/docs/default-source/default-document-library/disbursements-(january-2011).
pdf?sfvrsn=0> accessed 21 June 2017

HM Courts & Tribunals Service, England and Wales, Summary Assessment of Court costs: A Guide for
Judges (Govuk, 2011) <https://www.gov.uk/government/publications/summary-assessment-of-court-costs-
a-guide-for-judges>accessed 21 June 2017

Supreme Court of British Columbia, Canada, Costs in the Supreme Court (Supremecourtbcca 22 August
2009) <http://www.supremecourtbc.ca/sites/default/files/web/Costs-in-Supreme-Court.pdf>accessed
21 June 2017

Supreme Court of New South Wales, Australia, Information about Costs Assessment (Nswgovau, 2016)
<http://www.supremecourt.justice.nsw.gov.au/Pages/sco2_practiceprocedure/sco2_costsassessment/
sco2_costsassessment_faqs/sco2_costsassessment_faqs.aspx>accessed 21 June 2017

Supreme Court of Northern Territory, Australia,Solicitor Costs - Taxation Guidelines(Ntgovau,2013)

<http://www.supremecourt.nt.gov.au/lawyers/documents/Cost_Scale_Under_Order_63_Supreme_
Court_Rules.pdf>accessed 21 June 2017

22
DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
Ground Floor, Bldg. 4, The Gate District, DIFC - PO Box
211724, Dubai, UAE - Tel: +971 4 427 3333, Fax: +971
4 427 3330 - DIFC Courts Hours of Operation: 8am to 5pm,
Sunday to Thursday - DIFC Courts Registry Opening Hours:
10am to 4pm, Sunday to Thursday - Emergency Application
Number: 24/7 on +971 4 427 3331

@difccourts difccourts difccourts

www.difccourts.ae