Navigating Cost Assessments - The BVI Commercial Judge Offers Clarity On Recoverable Costs In The Commercial Division

On 29 April 2016, the Honourable Justice Barry Leon, the Commercial Court Judge in the BVI, handed down a detailed Judgment on the assessment of costs in the Commercial Division. The Claimant, Olive Group Capital Limited (the "Claimant"), vigorously opposed the quantum of costs claimed (the "Claimed Costs") by the Defendant, Gavin Mayhew, (the "Defendant") resulting from his succeeding on a preliminary issue point which meant the proceedings against him were brought to an end. The Defendant, represented by Conyers Dill & Pearman ("Conyers"), maintained that, consistent with Rule 65.2 of the Eastern Caribbean Supreme Court Civil Procedure Rules ("ECSC Rules"), the claimed costs were reasonable and fair both to the person paying and the person receiving such costs.

The Claimant, relied on six principal grounds namely that pre-litigation costs were not recoverable, the extent of recovery of the fees of a foreign lawyer were limited, as was the extent of recovery by a corporate (as opposed to litigation) legal practitioner, the level of detail and particularity did not comply with the requirement under the ECSC Rules and thus, time incurred in relation to those tasks should be excluded, recording time in 15 minute increments was unreasonable and finally, the costs of a senior legal practitioner doing a small amount of work on bundles was not recoverable. This article highlights the Judge's findings on the first five of those objections, and from which the Court took the opportunity to make findings applicable to practice in that Court generally.

Leon J reiterated the general principles which governed the assessment of costs under the ECSC Rules and confirmed that when assessing costs, regard should be given to the requirement of proportionality adopting the guidelines set out in the English case of Lownds -v- Home Office Practice Note [2002] EWCA Civ 365 (previously relied on by the Court of Appeal in Claim No BVIHCMAP 2013/0006 Andriy Malitskiy, et al, -v-Oledo Petroleum Ltd (Court of Appeal, Virgin Islands))

Having laid out the general principles, which are at least uncontroversial, the Judge dealt with each objection in turn.

In relation to pre-litigation costs the Court rejected the Claimant's argument that these costs were not recoverable because the order was "costs in the proceeding" and thus, limited the costs recoverable to those incurred from the issuance of the Claim. The Court held that a general order, as to costs, was not limited...