The Cultural Foundation (American School of Dubai) v Beazley Furlonge Ltd & Ors

Costs relating to consequential hearings should be allocated by reference to the issues addressed and the parties’ relative success on those costs issues. Costs concerning future directions are ordinarily costs in the case. Unsuccessful applications for permission to appeal will generally attract no order as to costs, including the associated preparation. The court should avoid treating a party’s success on earlier substantive issues as determinative of success on later costs issues. Summary assessment is appropriate where it is proportionate and avoids further cost and delay.

The judgment determined further costs arising from a one-day hearing on 12 July 2018. That hearing concerned directions for the future conduct of the action, unsuccessful applications for permission to appeal, and consequential costs issues following an earlier trial of ten preliminary issues. The court had already given judgments on the preliminary issues and related costs matters. The parties could not agree the costs of the 12 July hearing, so the issue was determined on written submissions.

1. Applicable approach. The court followed the general principles in CPR 44.2 and the relevant White Book guidance. Costs were to be allocated according to the nature of the work and the parties’ relative success on the costs issues themselves, rather than automatically by reference to success on the preliminary issues.
2. Directions and permission to appeal. Costs relating to directions for the future conduct of the action, including preparation, were costs in the case because they concerned the litigation as a whole. No order as to costs was made for the unsuccessful applications for permission to appeal. The respondents were not generally required to incur costs opposing such applications.
3. Allocation between parties. The court adopted a broad and practical allocation. The claimants were each awarded 50% of their costs of the costs issues against Beazley. There was no order as to costs between either claimant and the Excess Insurers. The Excess Insurers were awarded 50% of their costs of the costs issues against Beazley.
4. Assessment and payment. The court summarily assessed ASD’s costs at £44,000 and ADNEC’s costs at £35,000, with Beazley liable for £22,000 and £17,500 respectively. A payment on account of £12,500 was ordered towards the Excess Insurers’ costs. The sums were payable within 28 days. Interest was postponed until the final payment date for the sums awarded to ASD and ADNEC, with separate rates applying to the Excess Insurers’ costs.

The judgment records earlier first-instance judgments concerning the preliminary issues and related costs, including [2018] EWHC 1083 (Comm) and [2018] EWHC 2185 (Comm). No appellate stage is stated.