The cost of security

One aspect of the preliminary issues judgment in Motto & Ors v Trafigura Ltd & Anor [2011] EWHC 90201 (Costs) (15 February 2011) that I did not quite understand concerned the cost of security.

The claimants’ solicitors had needed to pay for security for their employees whilst working in a dangerous part of the world. These costs were claimed as a specific category of legal costs. Master Hurst allowed such costs and said:

“The decision which I have reached in relation to hourly rates does not reflect an additional element for the cost of security in the Ivory Coast, but rather, as Mr Williams submits, the overheads of a firm based in Clarkenwell. Had the hourly rates included an element for overseas security, I should have had to hear argument and details before arriving at a final figure. In the event, therefore, to the extent that it is reasonable and proportionate, the cost of security is recoverable.”

However, when dealing with the issue of what hourly rates to allow he ruled:

“In my view it is also necessary to take into account the inevitable increase in overheads that will be incurred by having to employ people to work in dangerous conditions overseas.”

Perhaps this was meant to mean that staff might have had to be paid more than normal to work in dangerous conditions, and thus the firm would be paying higher salaries (so incurring higher overheads) than would normally be the case. However, this might have been worded more clearly.

One thought on “The cost of security

  1. I can understand why a blog from the perspective of defendant interests focuses on issues such as this. But there is another very striking feature of this case – striking because although here played out by the “big boys” it can be found in every county court in the ocuntry, day in and day out.

    It is the significant number of stupid, hopeless, unarguable points being taken by the defendant. For example, despite the presence of 3 QCs, it was thought to be a reasonable argument (a) these claims should have been brought in the Ivory Coast; (b) the Ivory Coast would have provided legal aid; (c) if not, the UK would have provided legal aid.

    The defendant was a British company. It has no significant assets in the IC. It had agreed to pay the costs of the English proceedings. The Ivory Coast is one of the poorest and most corrupt countries in the world. The corruption extends to its courts. The restrictions on legal aid in England are well known. For these and many other reasons, the points made were fatuous and unwinnable.

    Another argument was that these cases, which turned on expert evidence of fantastic complexity, should have been brought as small claims. As they say: “comment is superfluous”.

    I am afraid that defendants in smaller cases take equally ludicrous points, usually under the indemnity principle, every day. And there is equal misconduct by claimants, eg in insisting that CFAs and ATE policies should not be disclosed.

    Why is it in costs alone that people think it worth their while to take hopeless points? It does not help your client. It pollutes your good points. If you manage to hoodwink a dozy DJ or costs judge, it simply leads to an appeal.

    In much county court litigation, a part explanation for this is, I am afraid, the lamenatable standards of training of many costs draftsmen, and the professional misconduct – for that is what it is – of the solicitors who instruct them to argue points they obviously are not competent to handle. But that does not explain the Ivory Coast case, where there was a City solicitor and 3 silks in play.

    One of the problems in that, with honourable exceptions, costs is the province of judges of a fairly low calibre. Anyone who practises there will know that this description includes a number of the SCCO masters. They do not have the gumption or the intellectual self confidence to challange those running these hopeless arguments.

    As the blog points out, the claim for costs in Ivory Coast was over 100 million. Why is this dispute before a costs judge? If the money was labelled “damages” instead of “costs” the litigation would be managed by a senior judge of the Commercial Court.

    This delegation of costs to the lowest tier of judiciary is a relic of a belief by high court judges (all ex barristers) that costs is “grubby”. It’s not what “gentlemen” argue about. It isn’t too crazy to see it as another eruption of our lovely English class system – “costs is for the solicitors, old boy… Speak to my clerk about money…”. Look as Maurice Kay LJ’s notorious statement about “costs counsel” in Crane v Cannons Leisure (“… for such people exist…”)

    This is not just irritating. It is precisely because costs is a ghetto that the costs wars lasted so long. Take the example of the enforceability of CFAs. That was a huge pooint. It wasn’t until May 2003 – 3 years into the new regime – that it got to the Court of Appeal. Before that, there was just a morass of county court and SCCO decisions. If the point had been referred to a high court judge, as it should have been, there would have been a binding decision by the end of 2000, and a CA decision by mid 2001.

    Costs needs to be brought into the mainstream. And those who have made a living by arguing hopeless points need to be sorted out. It’s well known that one of the [costs counsel has a]* penchant for arguing the unarguable (see It has to stop!

    Yet, instead we have Jackson. The logic of this appears to be that rather than sorting things out, we will simply abolish costs as an issue is as many areas as possible, regardless of the injustice that causes.

    * Censored by the Editor

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