Costs in the DIFC Courts: Interim payments and immediate assessment

In this article, Patrick Tomison and Ben Brown provide insights and reflections arising out of the Court’s costs judgment in (1) AES Middle East Insurance Broker LLC (2) AES Financial Services (DIFC) Limited (3) AES Financial Services Limited v GSB Capital Ltd CFI 060/2023.

Following the dismissal of all of the claims brought against GSB Capital Ltd (“GSB”) by AES International (or “AES”), the Court of First Instance of the DIFC Courts handed down its decision on costs in a judgment dated 28 August 2025 (“the Costs Judgment”).

Read the judgment here

Ben Brown, Partner, and David True, Senior Associate, of Clyde & Co LLP, along with Stephen Doherty of Serle Court and Patrick Tomison of Outer Temple Chambers, represented GSB from the outset of proceedings.

Background

The background to the AES v GSB litigation is summarised in the article by Clyde & Co posted on 11 August 2025. In summary, AES sought damages from GSB arising from clients moving their custom from AES to GSB following four financial advisors leaving AES and joining GSB. AES’s claims were dismissed in their entirety.

AES accepted that it was liable to pay GSB’s costs of the proceedings. Under Rule 38.7 of the Rules of the DIFC Court (“RDC”), the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party. AES’s concession was inevitable considering this general rule.

GSB’s total claimed costs are just under USD 1.7 million. GSB is not, however, entitled to be paid the entirety of these costs without restraint. The Court retains control over the amount of costs which an unsuccessful party will be required to pay to the successful party in the proceedings. Consequently, the matters in dispute between the parties on costs were:

1. The basis on which the Court should assess GSB’s claimed costs. The Court can either assess costs on the ‘standard basis’ or the ‘indemnity basis’, as defined in RDC 38.18 and 38.19. The indemnity basis would be more favourable for the receiving party, but the Court will only assess costs on the indemnity basis if there has been particularly reprehensible conduct by the party who is liable to pay. 
2. The procedure by which those costs are assessed. The Court can either make an immediate assessment of costs or order a detailed assessment of costs: see RDC 38.28. Detailed assessment is a procedure by which the amount of costs is decided by the Court (typically the Registrar) in accordance with the comprehensive framework set out in Part 40 of the RDC. Detailed assessment can take months, and the costs incurred in undertaking detailed assessment can be substantial (including payment of a court fee).
3. If the Court were to order detailed assessment (which would mean that costs would not be finalised for a number of months), whether AES should pay GSB an interim payment on account of its costs. An interim payment would typically be a proportion of the total costs claimed by the receiving party.

In summary, on each of these points the Court decided that:

1. GSB’s costs would be assessed on the standard basis because, whilst aspects of the Claimants’ conduct justified criticism, it did not reach the level of improper, unreasonable or exceptional conduct to warrant an award of indemnity costs.
2. The costs would be subject to detailed assessment.
3. AES was required to pay GSB an interim payment of USD 1,000,000, which represented around 60% of its claimed costs.

Insights from the Costs Judgment

There are several interesting insights which can be drawn from the judgment, particularly when considered alongside other recent decisions from the DIFC Courts.

Maximising interim payments:

The interim payment represented 60% of the Defendant’s claimed costs. Paragraph 5 of PD 5/2014 states that the Court will ordinarily order 50% of the amount claimed in the statement of costs to be paid on account, so the Court’s order represented a significant uplift on the guideline rate. 

A significant reason for the uplift was the obvious proportionality of the Defendant’s costs (USD 1.6 million) in a claim valued at one point at £38 million, particularly compared with the Claimants’ costs of at least USD 3.5 million. If a party’s costs are obviously proportionate to the value and complexity of a dispute, a Court is more likely to award a higher interim payment.

The Court was helped in its decision by the provision from the Defendant of “detailed evidence in support of its claim”. That evidence consisted of a detailed witness statement from Ben Brown at Clyde & Co setting out the costs incurred by the Defendant at each stage of the proceedings accompanied by a narrative on how the Defendant had taken steps to conduct the proceedings as cost-effectively as possible. The provision of this detailed evidence enabled the Court to take a provisional view on the Defendant’s likely costs recovery, and to gain confidence that the Defendant’s likely costs recovery was going to be much higher than 50% of its claimed costs.

The lesson is an obvious one, but one which can be overlooked at the costs stage: evidence is vital. The receiving party needs to consider carefully what evidence it needs to adduce in support of its claimed costs, because the costs decision is going to turn on the quality of that evidence.

The flipside to the Defendant’s evidence is that the Claimants raised specific disputes about the Defendant’s costs which amounted to only 4% of the Defendant’s total costs claim. Even if all of the Claimants’ disputes were accepted, 96% of the Defendant’s costs were unchallenged. This was problematic for the Claimants because the inference was that 96% of the Defendant’s costs were unlikely to be the subject of substantial dispute.

Immediate or detailed assessment:

The Defendant asked the Court to undertake immediate assessment of its costs. The rationale was that the trial judge was familiar with the case and the procedural background, having case managed the proceedings throughout. The only stage in proceedings not managed by the trial judge was the first CMC.

The context is that the DIFC Courts has introduced a new practice of “docketed case management”. We are unaware of a practice direction or other document in which this practice is recorded, but practitioners will be aware that this is the practice of the DIFC Court of First Instance (CFI). It has also been recorded in judgments from the DIFC Courts. For example, H.E. Justice Andrew Moran referred to the practice “whereby important case management applications, in substantial cases allocated to a particular judge for trial, and case management towards the trial, should be dealt with by the Judge to whom the case has been allocated”: Stone v (1) ABHI Fintech Ltd and (2) ABHI Ltd [2023] DIFC CFI 089 (16 April 2025) at §7.

The Defendant’s contention was that Justice Le Miere’s detailed knowledge of the case management history meant that he was uniquely well placed to undertake an immediate assessment, despite the usual practice ordering detailed assessment for cases where trials have lasted more than a day. Docketed case management in the DIFC Courts should empower the trial judge to take robust costs decisions, which has the benefit of avoiding further costly litigation at detailed assessment.

Justice Le Miere disagreed with the Defendant’s argument and ordered detailed assessment: see §§38-42 of the costs judgment. In summary, he found that immediate assessment was inappropriate due to RDC 38.30(1), the complexity of the litigation, the fact that the Court could not undertake a detailed assessment itself, and the fact that precedent did not support immediate assessment in circumstances comparable to the case.

Practitioners should not, however, be deterred from seeking immediate assessment of costs following a multi-day trial in the appropriate case. In a recent decision handed down in Al Buhaira National Insurance Company v Arab War Risks Insurance Syndicate [2024] DIFC CFI 013 (9 September 2025), in which Clyde & Co led by Leonard Soudagar represented the Claimant, H.E. Justice Michael Black KC immediately assessed the Claimant’s costs in the sum of AED 4,563,051.74 (i.e. 100% of the Claimant’s claimed costs) following a 4-day trial. At §212 of the judgment, Justice Black held that:

It should be noted that both parties seemed content with an immediate assessment, so the Court was not faced with deciding between rival submissions. However, Justice Black’s decision shows that the Court is increasingly willing to undertake immediate assessment following multi-day trials due to the trial judge’s familiarity with the entirety of the proceedings.

Ben Brown, Partner, and David True, Senior Associate, of Clyde & Co LLP represented GSB throughout its successful defence of the claim. Stephen Doherty of Serle Court and Patrick Tomison of Outer Temple Chambers were instructed throughout the proceedings and represented GSB at trial and during costs submissions.

Costs in Employment Disputes post-9 October 2025

On 9 October 2025 Chief Justice Wayne Martin issued Practice Direction No. 1 of 2025 – Access to Justice in Employment Disputes. The Practice Direction is a huge change for employment disputes. The general rule will be that in employment disputes each party will bear their own legal costs. 

This article addresses costs for cases falling outside the scope of Practice Direction No. 1 of 2025. It is easy to identify cases that would fall within the scope of the Practice Direction No. 1 of 2025, but it is less easy to clearly delineate the boundaries. For example, AES’s claims against GSB were employment-related: they arose from the employment by GSB of four former employees of AES. However, the claims were not pursued under the DIFC Employment Law and it was more akin to a commercial claim. 

Full analysis of the effects of Practice Direction No. 1 of 2025 will be a matter for another article – and the DIFC Court in due course – but there is at least scope for dispute about which claims will be caught within the scope of the new costs neutral regime for employment disputes.