Registrar Nour Hineidi provides a stern reminder on the limits of recoverable costs in the DIFC Courts, slashing a claim of nearly AED 80,000 down to AED 15,000 for a procedural application.
Why did the Claimant in CFI 051/2017 seek AED 79,820.50 in costs for a single procedural application?
The dispute arose following an application by the Defendant, Minali, for a retrospective extension of time. The Claimant, Montal, responded to this application and subsequently filed a statement of costs seeking a total of AED 79,820.50, which included a disbursement of AED 11,339.50. The Claimant’s position was that this figure represented the actual costs incurred by their solicitors and counsel in considering the application, obtaining client instructions, and preparing a response.
The Registrar found this figure to be entirely disproportionate to the work performed, noting that the submission provided by the Claimant was largely comprised of unedited case law. The Registrar’s assessment highlighted the lack of justification for such a high expenditure in a standard procedural matter. As stated in the judgment:
The amount claimed by the Claimant of AED 79,820.50 (which includes the disbursement of AED 11,339.50) is excessive.
Which judge presided over the summary assessment of costs in Montal v Minali?
The matter was presided over by Registrar Nour Hineidi in the DIFC Court of First Instance. The order was issued on 24 February 2021, following the Registrar’s earlier order dated 9 December 2020, which had dealt with the underlying application for a retrospective extension of time.
What arguments did the Claimant advance to justify the AED 79,820.50 cost claim?
The Claimant attempted to justify the high costs by submitting a 76-page response to the Defendant’s application. However, the Registrar observed that the vast majority of this submission—some 73 pages—consisted merely of copies of cases cited in a three-page letter. The Claimant failed to highlight relevant sections of these authorities, suggesting that the work involved was limited to basic legal research and the mechanical act of annexing case law to their correspondence.
Furthermore, when the Registry requested a detailed breakdown of how the costs and the specific disbursement of AED 11,339.50 were accrued, the Claimant failed to provide the necessary transparency. Specifically, the Claimant neglected to annex the counsel’s invoice to the Statement of Costs or provide it upon subsequent request by the Court, leaving the Registrar with no evidentiary basis to justify the disbursement.
What was the primary legal question regarding the proportionality of legal fees in CFI 051/2017?
The core legal question was whether the costs claimed by the Claimant were "fair and reasonable" under the principles of summary assessment. The Court had to determine if the time spent by legal representatives was commensurate with the complexity of the task—a three-page letter responding to a procedural application for an extension of time. The issue was not merely the quantum of the fees, but whether the work performed, specifically the inclusion of 73 pages of unhighlighted case law, could be considered a reasonable expenditure for which the Defendant should be held liable.
How did Registrar Nour Hineidi apply the test of reasonableness to the Claimant’s bill of costs?
Registrar Hineidi applied a strict test of proportionality, evaluating whether the hours billed by the Claimant’s solicitors and counsel were justified by the actual output produced. The Registrar noted that the Claimant’s submission was largely padding, consisting of cases that were not even annotated for the Court's benefit. The reasoning focused on the disparity between the effort required to prepare a three-page letter and the nearly AED 80,000 fee requested.
The Registrar’s assessment was particularly critical of the lack of evidence regarding counsel's fees, which led to the total exclusion of that disbursement from the award. As the Registrar noted:
It would seem quite unreasonable that almost AED 80,000 was accrued by the Claimant’s solicitors and counsel in considering the Application, seeking client instructions and preparing a three-page letter in response to the Application (with some 5 or 6 cases exhibited to the submission).
What specific DIFC Rules and evidentiary requirements did the Registrar highlight regarding the recovery of counsel’s fees?
The Registrar emphasized the requirement for transparency when claiming disbursements, particularly regarding counsel’s fees. By failing to provide the underlying invoice, the Claimant failed to meet the evidentiary burden required to recover those costs. The Registrar’s reasoning was clear:
On that basis, I am plainly not in a position to award the Claimant a reimbursement of counsel’s fees.
The Registrar’s approach reinforces the expectation that parties must provide clear, itemized breakdowns of costs, especially when disbursements constitute a significant portion of the total claim. Without such documentation, the Court will not speculate on the validity of the charges.
How did the Registrar characterize the Claimant’s 76-page submission in the final assessment?
The Registrar was blunt in her assessment of the Claimant’s filing, noting that the volume of the submission was not indicative of the quality or necessity of the work. The Registrar observed that the 73 pages of case law were simply "exhibited" without any effort to direct the Court to specific, relevant passages.
The Claimant’s submission in response to the Application was 76 pages long, with the first three pages being a letter and the remaining 73 pages containing copies of cases referred to in the letter.
This characterization served as the foundation for the Registrar’s decision to drastically reduce the recoverable hours, as the Court viewed the preparation of these exhibits as a low-value administrative task rather than high-level legal work.
What was the final disposition and the specific monetary relief ordered by the Court?
The Registrar summarily assessed the Claimant’s costs at AED 15,000, a significant reduction from the AED 79,820.50 claimed. This amount was calculated based on approximately 6 hours of fee-earner time, accounting for work at the Associate and Senior Associate levels, with a small allowance for Partner review. The Defendant was ordered to pay this amount within 14 days. Additionally, the Court mandated that interest would accrue on the awarded amount from 23 February 2021 until the date of full payment.
On the basis of the above, it would seem to me that awarding AED 15,000 (being approximately 6 hours of fee earner time, at an Associate and Senior Associate level with some brief time set aside for Partner review), is fair and reasonable.
What are the practical implications for DIFC practitioners regarding the summary assessment of costs?
This case serves as a warning to practitioners that the DIFC Courts will not rubber-stamp inflated costs, particularly in procedural matters. Practitioners must ensure that their costs submissions are not only itemized but also proportionate to the work performed. The inclusion of "bulk" materials, such as unhighlighted case law, will be viewed with skepticism and may result in a significant reduction of recoverable fees. Furthermore, the failure to provide underlying invoices for disbursements—such as counsel’s fees—will likely lead to the total disallowance of those items. Transparency and proportionality are the twin pillars of cost recovery in the DIFC.
Where can I read the full judgment in Montal v Minali [2021] DIFC CFI 051?
The full judgment can be accessed via the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/cfi-051-2017-montal-v-minali. The text is also available via the CDN: https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/court-first-instance/DIFC_CFI-051-2017_20210224.txt
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| N/A | N/A | No specific case law precedents were cited in the Registrar's Order. |
Legislation referenced:
- Rules of the DIFC Courts (RDC) - General provisions regarding costs and summary assessment.