Cathay Pacific Airlines Ltd v Lufthansa Technik AG

The court has jurisdiction under Senior Courts Act 1981, s 51 and CPR 44.2 to summarily assess costs in a foreign currency. No restriction requiring costs orders to be expressed in sterling should be implied. The appropriate currency is the one which most truly reflects the receiving party’s loss. A party seeking such an order should give notice, explain the factual basis for the currency sought and provide a sterling equivalent. The court may require parties to identify in their pleadings the facts intended to be proved by witness evidence as part of active case management.

The claimant had commenced proceedings under CPR Part 8. In an earlier judgment, the court directed that the proceedings continue as if commenced under CPR Part 7 and declined to enter judgment for the claimant. The court then determined consequential issues concerning case management, costs and the currency of the defendant’s costs award.

The defendant had incurred solicitor costs directly in euros and sought summary assessment in that currency. The central issues were whether the court had jurisdiction to make a foreign-currency costs order, whether any restriction to sterling should be implied, and which currency most accurately reflected the defendant’s loss.

1. Case management. The court deferred consideration of transfer to the Shorter Trials Scheme. Under its active case-management powers, including CPR 3.1(2)(m) and 32.1(1), the court could require the parties to identify in their pleadings the facts they intended to prove by witness evidence. This was appropriate given the age of the dispute, the sums at stake and the anticipated volume of documents.
2. Costs. The defendant was the successful party on the procedural hearing within CPR 44.2(2). Costs would ordinarily follow that event, but the court apportioned them to reflect the distinction between procedural costs and costs concerning the underlying merits. The defendant recovered two-thirds of its claimed costs, summarily assessed at €25,000. The remaining third was costs in the case. The claimant forfeited half of its claimed costs, with the balance costs in the case.
3. Foreign currency. Section 51 of the Senior Courts Act 1981 and CPR 44.2 conferred a wide discretion. Neither contained an express requirement that costs be ordered in sterling. Applying the principles concerning judgments in foreign currencies and the indemnity principle, the court had jurisdiction to order payment in a foreign currency.
4. The relevant question was which currency most truly reflected the receiving party’s loss. Solicitors’ fees were accounted for and paid in euros, so the euro was the appropriate currency. Counsel’s fees were accounted for in sterling but paid in euros; in the circumstances, the whole modest award should be expressed in euros rather than divided between currencies.
5. A party seeking summary assessment in a foreign currency should give proper notice, explain why that currency is sought and provide a sterling equivalent. The defendant had supplied the necessary information. The claimant was ordered to pay €25,000.

First-instance consequential judgment following the court’s earlier procedural judgment, [2019] EWHC 484 (Ch). No appeal is stated.