The Costs Decision comes after the successful representation of the Plaintiffs in a number of summonses before the Grand Court of the Cayman Islands, including: (1) the Plaintiffs' summons for leave to amend their statement of claim (the "Amendment Summons") (2) the Active Defendants' summons against the First Plaintiff for security for their costs of the proceedings (the "Security Summons") and (3) the Active Defendants' summons against the First Plaintiff for disclosure of the name of the party funding the First Plaintiff (the "Disclosure Summons").
Please refer to our earlier advisory for the background to the Proceedings and a detailed summary of the summonses.
The Costs Decision
In light of the Plaintiffs' overwhelming success in each of the summonses, the Court agreed with the Plaintiffs that they should recover their costs, subject to a 20% deduction to reflect the fact that one of the four claims sought to be introduced by the Amendment Summons was disallowed. In doing so, the Court implicitly agreed with the Plaintiffs' position that the Court leans heavily against 'issues-based' costs orders, i.e. separate costs orders for issues won/lost. Rather, overall justice can be achieved by partially reducing the costs recovery of the successful party.
Accordingly, the Grand Court relevantly held:
- that the Active Defendants pay 80% of the Plaintiffs' costs of the summonses, to be taxed at the conclusion of the proceedings on an indemnity basis if not agreed; and
- that the Active Defendants shall pay to the Plaintiffs the sum of US$560,000 on account of their liability on costs.
Further to the above, the Court also expressly ordered that the Plaintiffs' recoverable costs and the payment on account should include the fees of their foreign lawyers, and that the normal restrictions in relation to foreign lawyers' fees and expenses in GCR O.62, r.18(3) – (7) were to be disapplied for the purposes of taxation.
Conduct of the Defendants
In arriving at the decision to award indemnity costs, the Court took the view that the Defendants' conduct across the summonses was "unreasonable to a high degree" and the way in which they litigated the summonses fell outside the norm, thereby warranting an Order for indemnity costs.
The Court also listed aggravating factors in relation to the Defendants' conduct, including that the Defendants:
- Had sought to resile from the original agreement in relation to the Amendment Summons which resulted in the Court having to assess a large volume of evidence, filed late, and which took up considerable resources in breach of the Overriding Objective;
- Introduced unnecessary complexity, which took the matter outside the norm;
- Issued the Security Summons which was "manifestly hopeless";
- Issued the Disclosure Summons at a very late stage (which failed in any event); and
- Conducted the litigation for clearly "tactical and strategic" purposes.
This Costs Decision provides useful guidance as to what conduct falls 'outside the norm' to merit the award for indemnity costs and is to be welcomed in encouraging parties to adhere to the Overriding Objective in litigating before the Grand Court of the Cayman Islands.
Our team included Gareth Murphy, Nick Dunne, Chaowei Fan, and David Lee, along with Thomas Grant KC of Wilberforce Chambers and Stuart Cribb of Essex Court Chambers.
