IN THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
PRACTICE DIRECTION NO. 5 OF 2014
DIFC Courts’ Costs Regime
This Practice Direction will come into effect on the date of signature. It may be cited as Practice Direction 5 of 2014 — DIFC Courts’ Costs Regime — and may be abbreviated to PD 5/2014.
Costs on the Indemnity Basis — RDC 38.17
1. In determining whether costs should be assessed on the indemnity basis as opposed to the standard basis (see in this regard RDC (Rules
of the DIFC Courts) 38.17
), the following factors, inter alia
, will be taken into consideration in the exercise of a judge’s discretion:
(i) circumstances where the facts of the case and/or the conduct of the paying party are/is such as to take the situation away from the norm; for example where the Court has found deliberate misconduct in breach of a direction of the Court or unreasonable conduct to a high degree in connection with the litigation; or
(ii) otherwise inappropriate conduct in its wider sense in relation to a paying party’s pre-litigation dealings with the receiving party, or in relation to the commencement or conduct of the litigation itself; or
(iii) where the Court considers the paying party’s conduct to be an abuse of process.
2. It is open to the Court to award costs on the indemnity basis in relation to specific portions of the trial or hearings (such as reliance on deficient expert evidence, uncalled for behaviour during cross-examination etc.) that have led to unnecessary costs being incurred by the other party to litigation.
3. An order for indemnity costs will not enable a party to receive more costs than they have incurred. Even on the indemnity basis the receiving is restricted to recovering only the amount of costs which have been reasonably incurred (subject to RDC 38.19
). The award of costs on the indemnity basis is normally reserved to cases where the Court wishes to indicate its disapproval of the conduct in the litigation of the paying party.
4. For the purposes of clarification, RDC 38.55
, (which provides that where the Court issues an Order which does not mention costs the general rule is that no party is entitled to costs in relation to that Order), applies only to sealed orders and does not extend to judgments. The Court may subsequently issue a consequential order including a Costs Order regardless of whether costs were dealt with in a judgment on the merits.
Costs on Account
5. Where the Court has ordered a party to pay costs subject to detailed assessment unless agreed, it will order 50% of the amount claimed in the statement of costs to be paid on account before the costs are assessed, unless the Court sees fit to order otherwise.
Costs Assessment Fees
6. The applicable fee for a costs assessment is hereby amended to 7.5 % of the amount claimed in the bill of costs, with a 50% refund if the parties settle in full and advise the Court within 21 days of the date of the detailed costs assessment hearing.
Costs Summary/Bill of Costs — Signed Statement
7. Any costs summary or bill of costs must include a statement signed by a registered practitioner that the bill accurately reflects the amounts which the Client is liable to pay and that there are no arrangements in place which will reduce the amount due and payable by the Client dependent on the outcome of the costs assessment.
8. In exercising its discretion as to costs, the Court may take into account parties’ conduct in relation to any attempt at mediation or any other means of alternative dispute resolution. Moreover, parties are encouraged to seek mediation in the context of costs liability.
Dated this 12th day of August 2014
Chief Justice Michael Hwang