What was the specific dispute regarding the quantum of costs in Jonathan David Sheppard v Sadapay Technologies Ltd?
The litigation arose following the dismissal of the Defendant’s Renewed Application for permission to appeal an earlier order made by H.E. Justice Roger Stewart. Following the dismissal of this application on 29 January 2026, the Court ordered the Defendant to pay the Claimant’s costs, which were to be assessed by the Court on the papers. The Claimant submitted a statement of costs totaling AED 59,600 for the work performed during the Renewed Application phase.
The Court’s assessment was necessitated by the Claimant's filing of this statement, which the Defendant did not contest. Despite the lack of opposition, the Court exercised its inherent duty to ensure that the costs claimed were both reasonable and proportionate. As noted in the judgment:
On 29 January 2026, orders were made dismissing the Defendant's Renewed Application and ordering the Defendant to pay the Claimant's costs of the Renewed Application to be assessed in accordance with the procedure specified in those orders. The first step in that procedure has been implemented and the Claimant has filed a statement of costs climbing to AED 59,600.
Which judge presided over the assessment of costs in CFI 025/2025?
The assessment was conducted by H.E. Chief Justice Wayne Martin. The procedure for this assessment was established by his own prior order dated 29 January 2026, which mandated that the quantum of the Claimant’s costs be determined by way of immediate assessment on the papers.
Chief Justice Wayne Martin dated 29 January 2026 (the “29 January Order”), dismissing the Renewed Application and ordering at paragraph 6 that the quantum of the Claimant’s costs will thereafter be assessed by H.E.
How did the parties approach the assessment of costs in the DIFC Court?
The Claimant, Jonathan David Sheppard, sought recovery of AED 59,600, representing the legal fees incurred by two practitioners, both described as senior counsel with 13 years of experience. The Claimant’s position was that these fees reflected the time and expertise required to respond to the Defendant’s Renewed Application for permission to appeal.
Conversely, the Defendant, Sadapay Technologies Ltd, adopted a passive stance. Despite being granted the opportunity to challenge the Claimant's statement of costs, the Defendant failed to file any submissions in opposition. As recorded by the Court:
The Defendant has not taken advantage of the opportunity to file submissions in opposition to the amount claimed.
What was the specific legal question the Court had to answer regarding the reasonableness of the claimed fees?
The primary legal question before the Court was whether the hourly rates and the total hours claimed by the Claimant’s legal team were "reasonable and proportionate" under the DIFC Court’s rules, specifically when measured against the caps set out in the Registrar's Practice Direction No. 1 of 2023. The Court had to determine if a practitioner with 13 years of experience, who is not a partner, could justify an hourly rate of AED 3,700, and whether the time spent drafting skeleton arguments for multiple similar cases was excessive.
How did Chief Justice Wayne Martin apply the test for proportionality and reasonableness in this assessment?
The Chief Justice applied a two-fold test. First, he compared the claimed hourly rates against the thresholds established in the Registrar's Practice Direction No. 1 of 2023. He noted that while AED 3,700 might be appropriate for a partner, it exceeded the permitted range for a non-partner practitioner with 10+ years of experience, which is capped at AED 3,298. Second, he scrutinized the efficiency of the legal work performed across three concurrent cases involving the same Defendant. He concluded that because the skeleton arguments were substantially similar, the hours billed were inflated.
As the practitioner is not said to be a partner, the costs claimed should be reduced to allow for the fact that the rate claimed for that practitioner is excessive.
The Court further reasoned that the duplication of effort across cases required a downward adjustment:
The similarity between the cases meant that the skeleton arguments in each case were substantially similar, with the result that the original drafting required in each case was limited.
Which specific authorities and Practice Directions governed the Court's assessment of hourly rates?
The Court relied primarily on the Registrar's Practice Direction No. 1 of 2023. This instrument provides the definitive framework for assessing the reasonableness of hourly rates in the DIFC Courts. The Court used the specific caps defined in this Direction to identify that the Claimant’s rate of AED 3,700 for a senior counsel (who was not a partner) was inconsistent with the maximum threshold of AED 3,298 for practitioners with over 10 years of experience.
How did the Court utilize the concept of "reasonableness and proportionality" in its review?
The Court utilized these concepts as a safeguard against excessive billing, even in the absence of a challenge from the opposing party. The Court affirmed that it retains an independent oversight role to ensure that the costs awarded do not exceed what is necessary for the proper conduct of the proceedings.
Nevertheless, it is appropriate for the Court to review the amount claimed in order to be satisfied that the amount claimed is reasonable and proportionate.
By applying this standard, the Court effectively signaled that practitioners cannot rely on a lack of opposition from a respondent to recover costs that are objectively excessive or inefficiently incurred.
What was the final disposition and the total amount of costs awarded to the Claimant?
The Court ultimately reduced the Claimant's requested amount from AED 59,600 to AED 45,000. This reduction accounted for both the excessive hourly rate charged by the senior counsel and the excessive number of hours claimed for drafting work that had been largely replicated across three similar cases.
Taking these matters into account the Claimant's costs are assessed in the amount of AED 45,000.
What are the wider implications for DIFC practitioners regarding costs assessments?
This order serves as a stern reminder that the DIFC Court will proactively police legal costs, even when the opposing party remains silent. Practitioners must ensure that their hourly rates strictly align with the categories set out in the Registrar's Practice Direction No. 1 of 2023. Furthermore, when handling multiple cases against the same party that involve similar legal issues, practitioners must demonstrate efficiency. Billing full hours for "original drafting" when the work is substantially similar to other concurrent matters will likely lead to a significant reduction in recoverable costs upon assessment.
Where can I read the full judgment in Jonathan David Sheppard v Sadapay Technologies Ltd [2026] DIFC CFI 025?
The full order can be accessed via the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/cfi-0252025-jonathan-david-sheppard-v-sadapay-technologies-ltd-5 or via the CDN: https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/court-first-instance/DIFC_CFI-025-2025_20260324.txt
Legislation referenced:
- Registrar's Practice Direction No. 1 of 2023 (Hourly Rate Caps)