Kazakhstan Kagazy Plc & Ors v Zhunus & Ors [2015]

In Kazakhstan Kagazy Plc & Ors v Zhunus & Ors [2015] EWHC 404 (Comm) the Claimants had made an application to the court to amend its particulars of claim which was unsuccessful and the court ordered them to pay the Defendants’ costs.

The statements of costs presented to the court by the Defendants totalled about £945,000 with neither party agreeing on interim payments. The Claimants contended that the Defendants’ costs were unreasonable and out of proportion to the matter. They further contended that an application should be made to the court for a detailed assessment by a judge and that if an order was made for a payment on account of costs then a hearing date should be fixed lasting half a day.

Justice Leggatt observed that the hearing required by the Claimants was not in accordance with the terms in the court order and as such would be inappropriate and for no purpose but he continued that in circumstances where there were large amounts of money at risk it may be considered reasonable for the party who is liable for costs to pay any amount of money towards trying to win its case. He also observed that when deciding what costs were recoverable from another party, expenses cannot be unreasonably sustained or excessive in amount. The Court would look at what expenses were reasonable and appropriate by looking at the least amount a party in proceedings could be reasonably anticipated to have spent in order to have demonstrated to the court that it had presented its case in an effective and competent manner.

It was considered that the Defendants’ costs were unreasonable and excessive and that detailed assessment of the costs would be required to ascertain what would be their correct amount of costs. Justice Leggatt observed that the probable amount of recoverable costs should be discounted and that an interim payment generally awards less than what could be recoverable. He accordingly made an order for the Claimants to pay £220,000 on account of costs.

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