Winning Doesn't Guarantee Costs in DIFC Employment claims

Hot on the heels of our article about the recent costs decision in AZ v BY (CFI 119/2025) available below, the DIFC Court of First Instance has issued further guidance on the award of costs in employment cases in the DIFC Courts. In BGC Brokers LP v Adam Tillman (CFI 038/2025), the Court held that even substantial success in an interim application is not, by itself, sufficient to justify a costs award.

Read our previous article

Background

BGC Brokers filed a claim against Mr Tillman for liquidated damages arising out of an alleged breach by Mr Tillman of his employment contract. Mr Tillman withdrew from taking up his role approximately seven months before commencing employment with BGC Brokers.

During the proceedings, BGC Brokers applied for a document production order. While the Court granted most of BGC Brokers’ requests, some categories of documents were narrowed and one request was refused entirely. 

Following the document production order, BGC Brokers sought its costs of the application on the basis that it was the successful party.

Mr Tillman’s position was that (i) the result was mixed, emphasising that one request was refused entirely and a number of other requests were substantially narrowed; and (ii) the application fell within the scope of Practice Direction No. 1 of 2025 (the “Practice Direction”) and that each party should bear its own costs of the application. 

The Practice Direction

Paragraph 3.1 of the Practice Direction provides that, in employment claims, each party bears its own costs. The Practice Direction therefore departs from the ordinary rule in civil litigation that costs generally follow the event.

Paragraph 3.2 confers a discretion on the Court to depart from that position in specified circumstances, including where a party has conducted the proceedings unreasonably or where it is otherwise in the interests of justice to make a costs order.

The Decision

Although Mr Tillman had never commenced employment with BGC Brokers, both parties accepted that the proceedings fell within the Practice Direction on the basis that the underlying claim arose out of an alleged breach of an employment contract. H.E Justice Le Miere observed that the fact that certain issues involved contractual principles and the enforceability of a liquidated damages provision did not alter the essential character of the proceedings as an employment claim.

H.E Justice Le Miere concluded that the overall outcome of the application favoured BGC Brokers. The Court ordered production for most of the categories of documents sought. Although a number of requests were narrowed and one request was refused, BGC Brokers obtained orders requiring Mr Tillman to produce documents in respect of most of the categories at issue. BGC Brokers therefore obtained the principal relief sought by the application.

However, H.E Justice Le Miere held that BGC Brokers’ greater success did not determine the costs issue.  The question was whether there is a sufficient basis under paragraph 3.2 of the Practice Direction to depart from the general rule that each party bears its own costs.

Justice Le Miere held that if substantial success alone were sufficient to engage the interests of justice exception, the general rule would frequently be displaced and its practical effect significantly diminished. He was therefore not persuaded that the greater success of BGC Brokers in the application justified a departure from the general rule established by paragraph 3.1 of the Practice Direction.

BGC Brokers also argued that (i) Mr Tillman had acted unreasonably in refusing a number of the requests for documents; and (ii) the commercial nature and significance of the dispute (including the indemnification of Mr Tillman by his new employer) justified a departure from the general rule. 

Justice Le Miere disagreed with BGC Brokers on the basis that (a) Mr Tillman’s opposition to the document requests was reasonably arguable and achieved some success; (b) the Practice Direction does not distinguish between employment claims according to their value or commercial importance; and (c) the source of a party's litigation funding is not a matter identified in the Practice Direction as relevant to the exercise of the discretion conferred by paragraph 3.2.

The Court therefore concluded that there was no basis to depart from the default position under the Practice Direction and ordered that each party bear its own costs of the application.

Key Takeaways

This decision confirms that the Practice Direction applies to interlocutory applications in employment proceedings in the DIFC Courts (although that was not in significant doubt). 

The decision also reinforces our view that costs applications under the new Practice Direction will be difficult and that success in applications or proceedings themselves will not, on its own, justify a departure from the general rule that each party pays its own costs.

Justice Le Miere was, however, more amenable to borrowing principles under the ET Rules 2024, which is perhaps unsurprising given the provisions are very similar.