In Yao Juan v Kwok Kin Kwok and Crown Treasure Group Limited, the Court of Appeal handed down another seminal decision on costs’ recovery agreeing with the Appellant that costs incurred by lawyers not admitted to practice in the BVI are not recoverable.
The Respondents were successful on their substantive appeal which resulted in costs award in their favour (the matter is, however, under appeal to the Privy Council). The Respondents, therefore, applied to the Commercial Court to have their costs assessed and these costs included fees incurred by foreign in-house lawyers at Conyers’ Hong Kong office who were not admitted to practice BVI law. Nonetheless, the Commercial Court held that the fees referable to the work of the Hong Kong associates were recoverable.
The Appellant appealed the order made by the Commercial Court on the basis that the combined effect of sections 2 and 18 of the BVI Legal Professions Act meant that costs incurred by a person practising BVI law who is not on the roll of legal practitioners in the BVI are not recoverable. In response, the Respondents argued that the Hong Kong associates were being supervised by two partners in the Conyers team who were admitted to practice BVI law. The Respondents argued that the fees of the Hong Kong associates were, therefore, to be construed as part of the Conyers fees which are being claimed.
The Court of Appeal building upon the decisions in Garkusha, Shrimpton and Gany Holdings allowed the appeal and concluded that the costs of the Hong Kong associates were not recoverable as the Hong Kong associates were in fact acting as legal practitioners while not being enrolled as BVI legal practitioners. The Court concluded inter alia that it was in the public interests of the BVI that only fees and disbursements of BVI registered practitioners should be allowed as unqualified foreign lawyers are not the provisions of the Legal Profession Act.
Harneys acted for the successful Appellant.
This decision is the latest in the corpus of authorities from the Court of Appeal that foreign lawyers’ fees are not recoverable unless the work done is in the nature of the provision of expert evidence on foreign law.