This order addresses the final quantification of legal costs following the dismissal of a jurisdiction application, clarifying the Court’s approach to assessing hourly rates and the proportionality of legal teams in complex DIFC litigation.
What was the total amount of costs claimed by the Claimants in CFI 079/2023 and why did the Third Defendant challenge this figure?
The dispute concerns the assessment of legal costs incurred by the Claimants, Thamer Abdulaziz Albulaihid and Moustafa El Sayed Abdulghani El Shafaei, following their successful defense against a jurisdiction application filed by the Third Defendant, Health Insights Asia (L) BHD. The Claimants sought a total of USD 43,310.31 in costs. This sum comprised professional fees for three fee earners—a partner, an associate, and a paralegal—alongside significant disbursements, primarily attributed to counsel fees.
The Third Defendant contested this amount, arguing that it was both unreasonable and disproportionate. Specifically, the Third Defendant contended that the hearing, which lasted four hours, addressed a relatively narrow legal issue and that the costs were inflated by the presence of multiple fee earners and counsel. Furthermore, the Third Defendant argued that the disbursement costs were excessive and that the Claimants’ legal team had engaged in unnecessary duplication of work. As noted in the submissions:
The Claimants argue that the Third Defendant's objections to the costs are misconceived and that the full amount claimed should be awarded for the following reasons. 14.
The Third Defendant urged the Court to adopt a global approach, suggesting that the recoverable costs should be limited to 65% of the total amount claimed.
Which judge presided over the assessment of costs in the DIFC Court of First Instance on 25 June 2025?
The assessment of costs was conducted by H.E. Justice Rene Le Miere in the DIFC Court of First Instance. Justice Le Miere had previously presided over the substantive jurisdiction application, having issued the order dismissing the Third Defendant’s challenge on 30 April 2025 and the subsequent order for costs on 23 May 2025.
How did the Claimants and the Third Defendant differ in their arguments regarding the necessity of multiple fee earners and counsel?
The Claimants maintained that the complexity of the proceedings necessitated the involvement of a partner, an associate, and both leading and junior counsel. They argued that the presence of multiple fee earners at the hearing was essential for effective coordination and to provide accurate, real-time advice to the clients. They emphasized that the jurisdiction application was not a "narrow question of law" but rather involved three distinct, complex legal grounds that required significant preparation, including the drafting of witness statements.
Conversely, the Third Defendant argued that the staffing level was disproportionate to the task. They specifically challenged the reasonableness of having both a partner and an associate present at the hearing, particularly when leading and junior counsel were also in attendance. The Third Defendant asserted that the Claimants had failed to demonstrate that the costs were incurred in the most efficient manner, suggesting that the Court should penalize the Claimants for what they characterized as an excessive and redundant legal team structure.
What was the precise doctrinal issue the Court had to resolve regarding the assessment of costs on a standard basis?
The Court was required to determine whether the claimed costs met the threshold of being "reasonable and proportionate" under the standard basis of assessment. The doctrinal challenge lay in balancing the Claimants' right to choose their own legal representation against the Court’s duty to ensure that the unsuccessful party is not burdened by excessive or unnecessary expenditure. This required the Court to evaluate whether the hourly rates charged by the fee earners—specifically the associate, whose rate exceeded the indicative guidelines—and the total time spent on documentation were justified by the complexity of the legal issues, including the interpretation of jurisdictional statutes and forum non conveniens arguments.
How did Justice Rene Le Miere apply the test of proportionality to the Claimants' bill of costs?
Justice Le Miere utilized a global assessment approach to determine the final award. While acknowledging that the work performed was necessary given the stakes of the jurisdiction application, the Court exercised its discretion to reduce the total amount to account for rates that exceeded the Registrar’s indicative guidelines and for instances of excessive documentation work. The Court’s reasoning focused on the necessity of the legal effort relative to the potential outcome of the application. As stated in the judgment:
Given the potential impact of the application—namely, the possibility of the Third Defendant being excluded from the proceedings—the Court finds that the legal work undertaken was justified and necessary. 29.
The Court further clarified its methodology regarding the complexity of the underlying application:
The Court accepts that the application involved complex legal and procedural issues, including the interpretation of Article 5A(1)(e) of the Judicial Authority Law, RDC 20.7, procedural matters concerning the joinder of the Third Defendant, and considerations under Article 13 of the Arbitration Law and forum non conveniens. These matters required detailed legal analysis and argument. 26.
Ultimately, the Court concluded that while the Claimants' team was highly qualified, the total bill required a downward adjustment to reflect a reasonable market rate and efficient work practices.
Which specific DIFC statutes and procedural rules were cited in the Court’s assessment of the jurisdiction application costs?
The Court’s assessment was grounded in the following legal authorities:
* Judicial Authority Law, Article 5A(1)(e): Cited regarding the Court’s jurisdiction over the subject matter and parties.
* Arbitration Law, Article 13: Referenced in the context of the procedural arguments raised during the jurisdiction challenge.
* RDC 20.7: Applied in the context of procedural matters concerning the joinder of the Third Defendant.
* Registrar’s Direction No. 1 of 2023: Utilized as the primary guide for assessing the reasonableness of the hourly rates charged by the Claimants' fee earners.
How did the Court utilize the Registrar’s Direction No. 1 of 2023 in its assessment of the Claimants' hourly rates?
The Court used the Registrar’s Direction No. 1 of 2023 as a benchmark for reasonableness. While the rates for the partner and paralegal were found to be within the average hourly rates provided in the Direction, the rate for the associate, Khadija El-Leithy, was noted to be above the average of USD 651 for a lawyer with up to five years of experience. The Court treated the Direction not as a rigid cap, but as a guide, allowing for the reduction of the final award to align the total costs more closely with the expected market rates for such work in the DIFC.
What was the final disposition of the Court regarding the costs award and the specific orders made?
The Court ordered the Third Defendant to pay the Claimants’ costs in the amount of USD 40,000. This represented a reduction from the original claim of USD 43,310.31. The Court’s order was issued on 25 June 2025, following the prior order of 23 May 2025 which had established the liability of the Third Defendant to pay costs on the standard basis. The Court confirmed the finality of this amount, stating:
Having reviewed the submissions and supporting documents, the Court is satisfied that the global amount of USD 40,000 in relation to the Jurisdiction Application is reasonable and proportionate. 25.
The Court also affirmed the fairness of this figure:
Accordingly, the Court finds the claimed amount of USD 40,000 to be fair, reasonable, and recoverable. [Q5]
What are the practical implications of this ruling for practitioners appearing before the DIFC Courts?
This ruling serves as a reminder that the DIFC Courts will actively scrutinize bills of costs, even when the underlying legal work is deemed necessary and the application is complex. Practitioners should anticipate that:
1. Indicative Rates Matter: While the Registrar’s Direction is a guide, charging rates significantly above these figures without clear justification will likely lead to a reduction in recoverable costs.
2. Staffing Proportionality: The Court will evaluate whether the presence of multiple fee earners at hearings is truly necessary. Over-staffing, particularly at the partner/associate level, is a common target for cost reductions.
3. Standard Basis Rigor: The Court is willing to perform a "global" assessment to ensure that the final figure is proportionate, meaning that even if individual items are justified, the total sum must remain reasonable in the eyes of the Court.
Where can I read the full judgment in Thamer Abdulaziz Albulaihid v Nasser Shehata [2025] DIFC CFI 079?
The full order can be accessed via the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/cfi-0792023-1-thamer-abdulaziz-albulaihid-2-moustafa-el-sayed-abdulghani-el-shafaei-v-1-nasser-shehata-2-health-insights-fz-llc-6
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| N/A | N/A | No specific case law precedents were cited in the text of this specific costs order. |
Legislation referenced:
- Judicial Authority Law Article 5A(1)(e)
- Arbitration Law Article 13
- RDC 20.7
- Registrar’s Direction No. 1 of 2023