Costs Of A Jurisdiction Challenge To A Third-party Costs Order Caught By CPR 46.1(Gorbachev v Guriev)

• Jurisdiction: European Union
• Law Firm: Gatehouse Chambers
• Subject Matter: Litigation, Mediation & Arbitration, Arbitration & Dispute Resolution, Court Procedure, Trials & Appeals & Compensation
• Author: Mr Phillip Patterson
• Published date: 24 April 2023

Dispute Resolution analysis: Overturning a decision of the lower court, the Court of Appeal has concluded that the costs associated with a jurisdictional challenge to an application for third-party disclosure are caught by r. 46.1 and should usually be paid by the Applicant and should not be subject to a separate determination, even where the jurisdiction challenge fails.

Gorbachev v Guriev [2023] EWCA Civ 327

What are the practical implications of this case?

This is an interesting case concerning the correct approach to the award of costs in relation to applications for third-party disclosure and the scope and interpretation of rule 46.1 of the Civil Procedure Rules. The Court of Appeal has confirmed that where a Respondent to a third-party disclosure application disputes the application on a range of grounds, including jurisdiction, all those costs are caught by rule 46.1, CPR and, absent unreasonable conduct on the part of the Respondent, will be payable by the Applicant. Even if the jurisdictional challenge is heard separately from and prior to the substantive challenge to the application, the Court should not determine those costs separately. Whilst the Court was at pains to observe that this does not give overseas Respondents a free ride to challenge jurisdiction at the expense of the Applicant, the decision is likely to increase the attraction of challenging applications for third-party disclosure on multiple grounds.

What was the background?

Mr Gorbachev and Mr Guriev are involved in a dispute concerning their interests in a Russian fertiliser...