Recently in the BVI the recoverability of the fees of foreign
lawyers from opposing parties has been the subject of both judicial
and legislative concern. The Legal Professional Act, 2015
("LPA") was enacted last year, which
changed the way practitioners are regulated and in turn affected
how the Court views recoverability.
The traditional position in the Commercial Court was that the
fees of instructed foreign lawyers are treated as a disbursement in
a BVI costs assessment, to be justified as a reasonable expense
incurred by the BVI lawyers in and about the conduct of the case in
the BVI (Grand Pacific Holdings Ltd v Pacific China
Holdings Ltd BVIHCV 2009/389).
Just before the LPA, the Court revisited this issue and held
that, in international commercial litigation, the involvement of
lawyers who are not practitioners of the jurisdiction's law are
a reality and a practical and reasonable necessity. Even though
they are not practising local law, subject to the same
considerations that apply to all members of the legal team, the
value of their work should be recognized and included in assessed
costs (Olive Group Capital Limited v Gavin Mark
Mayhew BVIHC (Com) 2015/115).
The LPA went through various revisions and included restrictions
on the practice of BVI law to a strict practicing certificate
regime. During these revisions the extra-territorial effect was
removed from the Bill before its enactment.In an appeal in which
Ogier acted for the appellant, the Court of Appeal of the Eastern
Caribbean Supreme Court construed the LPA and found costs of
foreign lawyers irrecoverable and the foreign law firm in that case
(instructing Maples & Calder) was found to have breached the
criminal law (Dmitry Garkusha -v-Ashot Yegiazaryan
& Others BVIHCMAP 2015/0015). Maples & Calder
invited the Court 'to correct' its judgment under the slip
rule, but the Court declined.
Recently, the Commercial Court clarified the position. A foreign
legal practitioner or anyone else, wherever located, can assist a
BVI legal practitioner by doing work under the ultimate supervision
of a BVI legal practitioner who is ultimately responsible for the
final work product. The focus at assessment should be what tasks
were performed, not so much by whom or where, and whether the
paying party should pay the receiving party for those tasks having
regard to the CPR 65.2 considerations of reasonableness,
proportionality and so forth. (Inna Gudavadze &
others v Carlina Overseas Corporation & others BVIHC (Com)
This is the most recent view of current BVI law by the
Commercial Court. However, as there is a Court of Appeal judgment
there is always the possibility that a different Commercial Court
or Court of Appeal judge would take a different view.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Last year we reported that the DIFC had successfully established itself as a so called ‘conduit' jurisdiction for the enforcement of foreign and domestic arbitral awards as well as foreign money judgements.
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