Westland Helicopters Ltd v Al-Hejailan

Where an unqualified person acts as a solicitor in court proceedings, the court has no jurisdiction to make a costs order in that party’s favour. The statutory prohibition extends beyond the unqualified person’s own charges and prevents recovery of costs normally included in a solicitor’s bill, including counsel’s fees. Such costs cannot be treated as available for set-off against the successful party’s costs. The court may therefore make a costs order reflecting the successful party’s overall result without deducting costs which the opposing party is legally unable to recover.

Westland Helicopters Ltd applied under sections 67 and 68 of the Arbitration Act 1996 in relation to an arbitrator’s award of interest. Westland succeeded on the alternative jurisdictional challenge and under section 68 in relation to interest awarded before January 1995, but failed on the principal challenge.

The costs hearing concerned the appropriate allocation of costs after that partial success. Mr Al-Hejailan had been represented in the arbitrations by an American-qualified attorney who was also a lawyer in his Saudi Arabian law firm. The issue was whether that representation prevented any costs order being made in Mr Al-Hejailan’s favour, and whether his potential costs could be set off against Westland’s costs.

1. Westland’s applications had achieved only partial success. Absent the representation issue, the appropriate result would have been a notional set-off, leaving Westland to recover 30 per cent of its costs. That reflected Westland’s success on the alternative ground and part of the section 68 application, balanced against failure on the principal issues.

2. For the court applications, Mr Thoms and his Saudi law firm were not entitled to act as solicitors under section 20 of the Solicitors Act 1974. Consequently, counsel was not entitled to accept instructions to appear for Mr Al-Hejailan in those applications under Part IV paragraph 401 of the Code of Conduct of the Bar.

3. Section 25(1) of the Solicitors Act 1974 prevented recovery of costs for work done by unqualified persons acting as solicitors. The prohibition extended to costs normally included in a solicitor’s bill, including counsel’s fees treated as solicitor’s disbursements.

4. The court therefore had no jurisdiction to make any costs order in Mr Al-Hejailan’s favour. His unavailable costs could not be set off against Westland’s costs or used to reduce the amount otherwise recoverable by Westland.

5. Westland was accordingly ordered to recover 70 per cent of its costs of both applications.

The judgment records earlier arbitrations before Mr Kerr and Mr Tackaberry, followed by Westland’s applications under sections 67 and 68 of the Arbitration Act 1996. This judgment gave reasons for the costs order made on 9 July 2004.