IXIS Corporate & Investment Bank v West LB Ag

MR JUSTICE AIKENS: I have to deal with the costs of the application by West LB, the second defendants in this action, to consolidate the current action with two other actions. I gave detailed reasons for rejecting that application in a judgment which I handed down yesterday. The submission of all the parties involved, including Nomura who West LB sought to bring into the current proceedings by the consolidation application, is that I should make a summary assessment of the costs of the application. I should add that I have already ruled that West LB should pay the costs of the application on the standard basis.

The submission of West LB is that the costs should be subject to a detailed assessment. However, it is accepted by Mr Taylor on behalf of West LB that if required by one or more parties, there could be an immediate detailed assessment in accordance with the provisions of CPR part 47.1. Mr Taylor also accepts that although he has reservations about the amount, there could be a payment of costs on account if there were not a summary assessment.

The totals of the cost schedules that have been submitted by the other parties are large. As an example, in respect of Terra Firma, who are the third defendants in the IXIS proceedings, the total schedule of costs in respect of the consolidation bill, is about £148,478. The claimant’s schedule of costs, which is in two parts, totals approximately £85,000, give or take a few hundred. The schedule, on the other hand, for CIBC, the first defendants in the current proceedings, is for a comparatively modest £29,439.55. The total altogether is something well over £300,000. That is because the costs of Nomura are themselves estimated in their schedule at being over £112,000.

The principle issue that I have to decide is whether I should assess summarily or there should be a detailed assessment. In principle I must assess the costs in a manner which is proportionate to the matters in issue, and I must resolve any doubt which the costs that court may have as to whether costs were reasonably incurred or reasonable and proportionate in amount, in favour of the paying party. The point that is foremost in Mr Taylor’s argument is that, given the number of schedules and the amounts involved and the nature of the hearing and the costs incurred, or said to be incurred, it will be impossible for me to make an assessment in accordance with CPR 44.4(2), in the manner I have just indicated, if I do only a summary assessment.

The response of all the other parties to that submission is that there is sufficient material in all the schedules to enable me to do this summarily, perhaps with the aid of additional submissions in writing, in a manner which will fully discharge the duties that are laid upon the assessing court by CPR 44.4(2).

There are other supplementary submissions which are made but that, it seems to me, is the key issue that I have to resolve. I have not been taken through the schedules in detail. This, I indicated this morning, was not something I thought would be of assistance. However, I have examined the schedules for myself sufficiently to come to the clear conclusion that it would be difficult, if not impossible, for me to discharge the duties which I have under CPR 44.4(2) by making a summary assessment of the costs. Not only are the sums claimed large, but there are a large number of either solicitor fee earners or counsel involved and a large number of parties. Any assessing judge will have to try and see whether or not there was duplication or all the work that was done by each of the parties and the solicitors and counsel involved were reasonable and proportionate with regard to the application that was made.

Accordingly, I accept Mr Taylor’s first submission that it is inappropriate in the circumstances of this case to deal on a summary assessment with the costs. However, that is not the end of the matter. There are three things which have to be dealt with as a consequence. The first is that CIBC, which has by far the lowest amount of costs, says that it is in a different position from the rest of the parties because its bill is comparatively modest. There is much force in that. The problem that I have, however, is that it seems to me that their bill will have to be considered in relation to the others if there is to be an overall view as to whether or not the costs incurred were reasonable and proportionate. So, my inclination is to say that there will have to be a detailed assessment in respect of that if other things are equal.

The second matter is that all the parties who want a summary assessment submit in the alternative, if I am against them, that there should be a payment on account pending a detailed assessment. Mr Taylor did not resist that submission in general although he did submit that it created difficulties in deciding what amounts should be paid on account.

The third point is that (and I think this was generally agreed apart from counsel for CIBC) if there is to be a detailed assessment, it should be an immediate one. However, CIBC said that it is not worth the additional costs involved for them. They would wait until the end of the trial.

Taking those matters all into account, I have concluded that the most sensible way to proceed with regard to CIBC is in fact to make a summary assessment of their costs. If Mr Taylor wishes to make any specific submissions with regards to those, then they are to be put in writing and to be sent to me before close of play tomorrow and I will issue a judgment in respect of that summary assessment of CIBC’s costs. That will not stop Mr Taylor’s clients from making comments in any subsequent detailed assessment of costs on this or that and, therefore, other work was either unreasonable or disproportionate from the circumstances.

Secondly, with regards to the other parties, I am going to make an order for an interim payment. This inevitably is going to be somewhat rough and ready and I fully take on board the point made by Mr Taylor that some of the figures may turn out to be much higher than that which the costs judge will allow. Accordingly, I am not going to grant an across-the-board figure, but will tailor it to the different parties involved.

With respect to IXIS where the total claimed is somewhere in the region of £85,000, I will order that there be an interim payment of 50 per cent of that amount.

In respect of Terra Firma where the total amount claimed is in the region of £148,000 I am going to make an order that there be an interim payment of £70,000.

In respect of Nomura, where the amount claimed is £112,000, I am going to make an order that there be a summary assessment of £66,000 which is just about 50 per cent.

I think that covers each of the parties. There will be an order for an immediate detailed assessment in respect of all the parties other than CIBC.