Saab v Saudi American Bank

Where a discrete jurisdiction issue has generated substantial costs, the court may order their immediate detailed assessment before the proceedings as a whole have concluded. Assessment and payment are separate questions. Even where the successful party seeks payment, fairness between the parties may justify deferring payment, particularly where security for costs is contemplated and immediate payment could prejudice the opposing party.

The defendant appealed from a decision of Mr Justice Tuckey concerning a jurisdiction dispute. The appeal was dismissed. After judgment, the claimants sought immediate assessment and payment of the costs incurred on the jurisdiction issue, which they described as a distinct issue involving extensive evidence and substantial expenditure.

The defendant indicated that an application for security for costs would be made. The Court of Appeal therefore considered whether the costs should be assessed and paid immediately, or whether payment should await the security application and be determined by the commercial judge.

1. Appeal dismissed. The court ordered the costs of the jurisdiction issue to be assessed forthwith. The issue was treated as sufficiently discrete to justify assessment before the conclusion of the main action.
2. Immediate assessment did not require immediate payment. The court treated assessment and payment as separate questions. The general position that costs are ordinarily dealt with at the conclusion of proceedings did not prevent an order for earlier assessment.
3. The court rejected the contention that successful resolution of the jurisdiction issue automatically entitled the claimants to immediate payment, irrespective of the likely outcome of the action. The relevant consideration was fairness between the parties at that stage. That required attention to the defendant’s possible prejudice and to the prospects of the substantive claim.
4. Payment was deferred pending the proposed application for security for costs. The question of payment overall was referred to the commercial judge, who was to decide whether payment should be conditional on security for the costs of the action or on other suitable terms.

• Court of Appeal: Appeal from the High Court decision of Mr Justice Tuckey dismissed. The costs of the jurisdiction issue were ordered to be assessed forthwith, but payment was deferred and referred to the commercial judge.