Walkers successfully defends appeal to overturn Garkusha costs

The Court of Appeal has dismissed the appeal in Shrimpton & Anor v Dragon Capital Group Limited, against a costs order which followed the case of Garkusha in finding that foreign lawyers' fees incurred in relation to BVI litigation were not recoverable.

In Garkusha, it was held by the Court of Appeal that costs incurred by foreign lawyers were not recoverable, as they were acting as BVI legal practitioners and such recovery is prohibited by the provisions of the Legal Profession Act 2015 (the "LPA"). In reaching its decision, the Court of Appeal relied partly on section 2(2) of the LPA which intended to make the practice of BVI law outside of the BVI a criminal offence, but had never been brought into force.

In dismissing the appeal against the first instance decision of Justice Bernard Eder QC which followed Garkusha, the Court of Appeal held that even if the Court in Garkusha had appreciated that section 2(2) had never been brought into force, it would not necessarily have arrived at a different conclusion. Section 18(3) of the LPA which prohibits the recoverability of fees incurred by anyone not on the Roll of Legal practitioners "acting as a [BVI] legal practitioner", provided its own basis for supporting the view that fees incurred by foreign lawyers' for acting as a BVI legal practitioner are irrecoverable. There is no requirement that an illegal act has occurred to prevent recovery of fees; all that it required is that the act in question must have been done by a person whose name is not registered on the Roll of Legal practitioners and that person must have been acting as a BVI legal practitioner.

Walkers acted for the Respondent, Dragon Capital Group Limited, in successfully resisting the appeal.

BRITISH VIRGIN ISLANDS
Oliver CliftonPartnerT +1 284 852 2246oliver.clifton@walkersglobal.com
Matthew NealAssociateT +1 284 852 2230matthew.neal@walkersglobal.com

HONG KONG
Timothy HaynesPartnerT +852 2596 3323timothy.haynes@walkersglobal.com