PJSC NATIONAL BANK TRUST & Anor v BORIS MINTS & Ors

A successful party’s costs recovery should not ordinarily be reduced merely because it failed on some arguments. A reduction may be appropriate where an argument was disproportionate, consumed substantial resources, or was highly unlikely to determine the outcome. Recoverable costs are assessed objectively by reference to the lowest amount reasonably required to conduct the case proficiently. A reasonable payment on account should ordinarily follow a costs order unless there is good reason otherwise.

The claimants’ applications to amend their Particulars of Claim and for summary determination based on findings in an LCIA award had been dismissed. The respondents were therefore entitled to costs.

The court considered whether the costs award should be reduced for unsuccessful legal arguments and unsatisfactory evidence, and what interim payments should be made on account of costs, including the effect of the need for a sanctions licence.

1. Under CPR 44.2(6), the court may order payment of only a proportion of the successful party’s costs. Failure on some arguments does not by itself justify a reduction, particularly where the arguments provided alternative routes to the same result.
2. A reduction was justified by materially unsatisfactory witness statements and by pursuing the argument that Gleeson v Wippell had been wrongly decided. That argument was not realistically open at first instance, was unnecessary to preserve for a higher court, and consumed disproportionate resources. The first defendant was awarded 90% of his costs and the second and third defendants 85%.
3. Recoverable costs must be judged objectively. The relevant measure is the lowest amount reasonably expected to be spent to conduct and present the case proficiently, having regard to all relevant circumstances. High hourly rates, a large legal team and substantial counsel fees justified caution in estimating recoverable costs.
4. Under CPR 44.2(8), a reasonable sum on account should ordinarily be ordered unless there is good reason not to do so. Interim payments of £400,000 to the second and third defendants and £180,000 to the first defendant were ordered, payable on the earlier of a sanctions licence being granted or 42 days. Other applications concerning the licence process were refused.

First-instance ruling on costs following the dismissal of the claimants’ applications.