The DIFC Court of First Instance clarifies the procedural timing for the assessment of interlocutory costs, ruling that such assessments must generally await the final conclusion of proceedings unless explicitly ordered otherwise.
Why did the Claimants in Marin v Markku argue that the Costs Order of 5 January 2021 permitted an immediate assessment of costs?
The dispute in CFI 042/2019 centered on the timing of cost recovery following an interlocutory order. The Claimants, Marin, Marita, and Mistan, initiated assessment proceedings on 16 March 2021, seeking to quantify the costs awarded to them under a Costs Order dated 5 January 2021. The Claimants contended that the mere existence of the Costs Order granted them an immediate right to have those costs assessed, placing the burden on the Defendant, Markku, to appeal the order if he wished to delay the assessment until the conclusion of the main litigation.
The Court firmly rejected this interpretation of the procedural rules. Justice Sir Richard Field addressed the Claimants' position directly, noting that their reliance on the Costs Order as a standalone trigger for immediate assessment was legally flawed. The Court emphasized that the absence of an express provision for immediate assessment in the original order meant that the standard procedural timeline must prevail. As noted in the judgment:
Accordingly, I reject the submission of the Claimants that the effect of the Costs Order is that there can be an immediate assessment of the costs and it was up to the Defendant to appeal the order if it wished to contend that assessment of the costs should await the conclusion of the proceedings.
Which judge presided over the application for a stay of assessment proceedings in CFI 042/2019?
The application was heard and determined by Justice Sir Richard Field sitting in the DIFC Court of First Instance. The Order with Reasons was issued on 20 May 2021, following a series of procedural steps, including a temporary stay previously granted by Registrar Nour Hineidi on 6 April 2021, which had paused the assessment process pending the Court’s final determination on the Defendant’s application for a de novo review and the stay of proceedings.
What were the competing arguments regarding the stay of assessment proceedings in Marin v Markku?
The Defendant, Markku, sought a stay of the assessment proceedings initiated by the Claimants, arguing that the assessment of interlocutory costs should not occur until the final resolution of the substantive claim. The Defendant relied on the principle that interlocutory costs are generally deferred to avoid piecemeal litigation and unnecessary procedural burden on the Court and the parties. He pointed to the equivalence between DIFC Rules of Court (RDC) and the English Civil Procedure Rules (CPR) to support the contention that no presumption of immediate assessment exists.
Conversely, the Claimants argued that the Costs Order dated 5 January 2021 was final in its nature regarding the specific costs awarded, and therefore, they were entitled to proceed with the detailed assessment procedure immediately. They maintained that the Defendant’s failure to challenge the Costs Order at the time it was issued precluded him from seeking a stay of the assessment process later. The Claimants viewed the assessment as a separate, enforceable right that did not require the conclusion of the main proceedings to be exercised.
What was the precise doctrinal issue the Court had to resolve regarding the assessment of interlocutory costs under RDC 40.1?
The Court was tasked with determining whether there is an inherent presumption in DIFC Court proceedings that interlocutory costs are subject to immediate assessment upon the issuance of a costs order. The core issue was the interpretation of RDC 40.1, which governs the timing of the detailed assessment procedure. The Court had to decide if the "general rule" stated in the rule—that assessment occurs at the conclusion of proceedings—is overridden by the mere fact that a costs order has been made, or if the Court requires an explicit directive for "immediate assessment" to deviate from that general rule.
How did Justice Sir Richard Field apply the test for immediate assessment of costs in Marin v Markku?
Justice Sir Richard Field applied a strict interpretation of RDC 40.1, determining that the rule establishes a clear default position: assessment is deferred until the end of the case. The judge reasoned that because the Costs Order of 5 January 2021 did not contain an express instruction for immediate assessment, the default rule must apply. He found that the Claimants' attempt to force an early assessment lacked a sound basis in the Rules of the DIFC Courts. The reasoning process was summarized by the Court as follows:
There is no presumption in DIFC Court proceedings that there shall be an immediate assessment of interlocutory costs. It follows that, since the Costs Order did not provide for immediate assessment of the costs therein ordered, the assessment of those costs must await the conclusion of these proceedings, subject to any further order made in the meantime.
Which specific RDC rules and comparative authorities were applied to determine the stay in Marin v Markku?
The Court primarily relied on RDC 40.1, which provides the framework for the detailed assessment of costs. The rule states: "The general rule is that the costs of any proceedings or any part of the proceedings are not to be assessed by the detailed procedure until the conclusion of the proceedings. However, the Court may order them to be assessed immediately."
In interpreting this rule, Justice Sir Richard Field looked to the English Civil Procedure Rules (CPR) for guidance, specifically CPR r. 47.1. The Court noted that the English rule is the equivalent of RDC 40.1. By referencing the White Book—the authoritative commentary on English civil procedure—the Court confirmed that the prevailing practice in both jurisdictions is that there is no presumption of immediate assessment for interlocutory costs. This comparative analysis served to reinforce the Court's decision that the default position under RDC 40.1 must be upheld in the absence of a specific order to the contrary.
How did the Court utilize the White Book commentary on CPR r. 47.1 to interpret DIFC procedural law?
The Court utilized the White Book commentary as a persuasive authority to clarify the intent behind RDC 40.1. By drawing the Court's attention to the note on CPR r. 47.1, the Defendant provided a clear doctrinal basis for the argument that interlocutory costs are not intended to be assessed immediately as a matter of course. Justice Sir Richard Field explicitly agreed with this note, stating:
The Defendant helpfully draws the Court’s attention to CPR r. 47.1 which is the equivalent to RDC 40.1 and the following note thereon in the White Book that is to the effect that there is no presumption that there shall be an immediate assessment of interlocutory costs.
This alignment with English practice ensured that the DIFC Court’s interpretation remained consistent with established common law principles regarding the efficient management of costs and the avoidance of premature assessment proceedings.
What was the final disposition of the application and the specific orders made by the Court?
Justice Sir Richard Field granted the Defendant’s application for a stay. The Court ordered that the assessment proceedings be stayed until the conclusion of the main proceedings (CFI 042/2019) or until a further order of the Court is made. Additionally, the Claimants were ordered to pay the Defendant’s costs of the stay application, to be assessed on the standard basis if not agreed. The Court also granted the Defendant liberty to apply for an interim payment of 50% of the costs awarded, provided the Defendant produces a verified Bill of Costs in accordance with RDC 38.13 and Practice Direction No. 5 of 2014. The Court’s conclusion was definitive:
It follows that the Defendant has an unanswerable case for the stay it applies for and I shall make the order sought.
What are the wider implications of Marin v Markku for DIFC practitioners regarding interlocutory costs?
This case serves as a critical reminder for practitioners that the DIFC Courts will not deviate from the general rule of deferred assessment without a clear and explicit order. Litigants seeking to recover costs immediately following an interlocutory victory must ensure that the specific order for costs includes a provision for "immediate assessment." Failing to secure such a provision at the time the costs order is made will likely result in the assessment being stayed until the final conclusion of the case, regardless of the merits of the underlying costs claim. Practitioners should anticipate that the Court will strictly enforce the default position under RDC 40.1 to prevent the proliferation of satellite assessment proceedings.
Where can I read the full judgment in Marin v Markku [2021] DIFC CFI 042?
The full judgment can be accessed via the official DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/cfi-042-2019-1-marin-2-marita-3-mistan-v-markku or via the CDN link: https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/court-first-instance/DIFC_CFI-042-2019_20210520.txt.
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| English Civil Procedure Rules (CPR) | r. 47.1 | Used as an equivalent rule to RDC 40.1 to establish the lack of presumption for immediate assessment. |
Legislation referenced:
- DIFC Rules of Court (RDC) 40.1
- DIFC Rules of Court (RDC) 38.13
- Practice Direction No. 5 of 2014, paragraph 5