Kerry Underwood

HIGH COURT MAKES COSTS ORDER IN FOREIGN CURRENCY

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In

Cathay Pacific Airlines Ltd v Lufthansa Technik AG [2019] EWHC 715 (Ch)

the High Court held, for the first time, that  costs orders can be made in a foreign currency, and the judgment gives useful procedural guidance for parties seeking costs in a foreign currency.

The claimant had unsuccessfully applied for summary judgment and the defendant sought its costs in euros, with the claimant arguing that the costs order should be in sterling.

The defendant’s solicitors had accounted for their fees in euros and the defendant had paid their bills in euros.

Counsel had accounted for his fees in sterling, but the defendant had paid the counsel’s fees in euros.

Taking account of the overriding objective, the High Court interpreted the word “amount” in CPR 44.2(1)(b) and CPR 44.2(6)(b) as including a sum expressed in a foreign currency, and declined to imply a restriction on the court’s power under section 51 of the Senior Courts Act 1981 or CPR 44 as precluding costs awards being made in a foreign currency.

To imply such a restriction would be contrary to the authorities on foreign currency judgments since

Miliangos v George Frank (Textiles) Ltd [1976] AC 443,

which removed the prohibition on judgments being given in a foreign currency.

The appropriate currency in which to make the costs award, in respect of both solicitor’s fees and counsel’s fees, was the euro and the defendant’s costs were summarily assessed at EUR25,000.

The judgment also considers the rules governing witness evidence and the tendency for witness statements in the Business and Property Courts to stray into inadmissible argument and commentary on documents.

As there was a real risk of this happening in this case, the court exercised its case management powers to direct the parties under CPR 3.1(2)(m) and CPR 32.1(1) to identify in their pleadings the facts which they intended to prove by means of witness evidence, as this would assist the court at the Case Management Conference  and provide a helpful structure for witness statements in due course.

The judge also commented that, pending the outcome of the review of the rules governing witness statements in the Business and Property Courts there was no reason why courts should not enforce the current rules more vigorously in appropriate circumstances.

Written by kerryunderwood

May 20, 2019 at 1:24 pm

Posted in Uncategorized

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