Epic costs assessment ‘unprecedented’, says judge

A judge appears to have finally concluded an epic costs battle where the arguments over who should pay what far exceeded the length of the actual trial.

Senior Costs Judge Gordon-Saker said the 97 days taken up by detailed assessment in Deutsche Bank AG v Sebastian Holdings Inc were ‘unprecedented’ and more than twice as long as set out in the first directions hearing.

He said the bill had taken so long to assess partly because most of the hearing was held remotely due to pandemic restrictions. The defendant also chose to challenge virtually every item in the bill and neither party settled even when they had an indication of the court’s direction of travel.

Gordon-Saker said there was ‘no alternative’ but to allow the paying party to challenge every item, which resulted in what he described as a ‘painstaking exercise’ of ‘forensic archaeology’.

The underlying trial, which was concluded in 2013, had lasted only 44 days. The commercial court had given judgment for the claimant Deutsche Bank for the sum of $243m and ordered the defendant to pay 85% of the claimant’s costs on the indemnity basis.

Gordon-Saker said the case was ‘huge and hard fought’ but that the detailed assessment proceedings were just as keenly contested. They started in 2017 when the claimant applied – unsuccessfully – for directions that the detailed assessment should be heard in two tranches. This had been argued on the basis that producing a detailed bill could take up to two years and cost £2.5m. The application was dismissed as the judge ruled that a paying party was entitled to know at the outset what was being claimed.

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The claimants served a bill in January 2019 for around £53m, including disbursements of more than £30m. There were then 40 documents schedules, one for each month, of which, individually, seven were over £1m and 15 were between £500,000 and £1m. The documents schedules ran to over 2,000 pages.

The defendant served points of dispute running to 289 pages and served replies in December 2019.

The court heard that the defendant made ‘recurring criticisms’ about how the claimant’s solicitors had recorded their time. It was submitted that descriptions were inadequate to identify precisely what work had been done and that most composite entries did not divide the time spent between different tasks.

Despite the claimant’s costs lawyer attempting to explain in detail what tasks had been done, the judge recorded there were few attendance notes or files notes.

Gordon-Saker said the way in which time was recorded and the absence of complete files led to ‘substantial reductions’ and overall the costs had come down by around 32%. He further ruled that the claimant should not be entitled to all of its costs of the detailed assessment and he reduced these by 30%.


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