Supplemental Terms for English Litigation and International Arbitrations
The provisions below apply to our engagement where Akin Gump LLP (the “firm” or “we”) represents a client (“you”) in litigation in the English courts or in an international arbitration.
1. Disclosure in English litigation and in international arbitration and preservation of documents
You should note that there are strict legal obligations regarding the preservation and disclosure of relevant documents within your possession or control when legal proceedings are on foot, or impending. These obligations are wide-ranging: documents for these purposes include any record of information such as diaries, emails, handwritten notes etc.; documents may be relevant if they support or undermine your case or that of your opponents; and documents may be within your control if they are held by third parties such as service providers and you have a right to obtain them. These obligations may require the suspension of your standard document destruction policies. You agree that all appropriate personnel and third parties will be notified of any current or impending legal proceedings and of the above obligations, and that we will be consulted before any relevant documents are destroyed. Failure to comply in a timely manner with document requests, or destruction of, or tampering with, evidence can result in the court or arbitral tribunal imposing sanctions or entering an adverse ruling on the merits. Further, care should be taken in the creation or receipt of any further documents in relation to a dispute, as they may have to be disclosed and could be damaging to your case. If in any doubt about the above, please consult with us.
2. Recovering and paying English litigation costs
In the case of litigation in the English courts, recoverability of the costs of the litigation as between the parties is entirely at the discretion of the courts. In deciding whether to make an award of costs, the court has a wide discretion and is entitled to take all the circumstances of the case into account, including but not limited to the conduct of the parties, the success or otherwise of each party in the arguments they advance and any formal offers to settle of which the court is aware. If you are successful in a hearing, the court is likely, although not bound, to order that the other side pays your legal costs. Equally, should you be unsuccessful at a hearing, you will probably be ordered to pay the other side’s costs, in addition to paying your own costs. The court may also order that the losing party pays interest on costs payable to the successful party. Recovery of costs in lower value court cases which fall within the English “small claims track” or “fast track” is limited.
An order for costs may be made by the court at any interim hearing as well as at the end of trial. The procedure for determining the precise amount payable in respect of the costs of that particular hearing is known as “assessment”. For some short and most longer hearings, a detailed assessment of these costs will be ordered. Although a detailed assessment of costs may take a significant time to complete, you will be required to pay the whole of our outstanding fees once we render an invoice. You must therefore be prepared for some delay between your paying our invoice and effecting a recovery from the other side. It may be possible in these circumstances to ask the court to order the paying party to make an interim payment on account of the costs payable. The court may also have the power to make a "summary assessment" of costs. This involves the court ordering one party to pay a specific sum to the other party in respect of the costs of that hearing instead of having to wait for a detailed assessment. This will be a relatively rough and ready figure (based on short statements of costs filed before the hearing) which may fall well short of the costs actually incurred.
An award of costs in your favour does not mean that you will recover the full amount of your costs from the other side. You must therefore expect there to be a shortfall (possibly substantial) between what you recover if you succeed and what you are liable to pay us.
Once the amount of costs payable has been determined, payment of those costs will usually need to be made promptly (e.g. within 14 days). There can be serious sanctions for the non-payment of costs. We will of course inform you promptly if a costs order is made against you and explain to you why that order was made and by when payment needs to be made.
It is possible for costs orders to be made against the firm if the court believes that the court’s time (or the time of another party) has been wasted or that a course of action was (in the court’s view) unacceptable. If, as a result of following your instructions, an order for costs is made against the firm, then you will be required to reimburse the firm for payment of that costs order.
Parties to litigation in the English courts may be required to file with the court estimates of costs already incurred and to be incurred, including disbursements, at certain key stages of the proceedings. You will be sent a copy of these estimates, and of the estimates filed by the other side, which will give you a more detailed picture of your potential costs liabilities as the matter develops.
The court might also order you to pay an amount as, or demonstrate that you have sufficient financial resources to provide, adequate security for the other side’s costs in case they obtain a costs order against you, in particular if you are resident outside the jurisdiction of the court.
In practice, even where a costs order has been made in your favour, you might not recover any of your costs if the other side does not have the means to pay, or is legally aided. You might also have to incur further legal costs in enforcing a costs order if the other side refuses to pay. You will in any case be responsible for payment of our fees in full relating to this matter, regardless of the outcome of the proceedings or of any costs orders made in your favour or of the amount of recovery you make from the other party.
3. Recovery and paying costs in international arbitration
In international arbitration, whether and the extent to which an arbitral tribunal has power and/or discretion to award the recovery of the costs of the proceedings depends on the terms of (a) the parties’ arbitration agreement, (b) any institutional rules they may have agreed to adopt and (c) the law of the place or seat of arbitration.
Frequently arbitral tribunals do have the power and discretion to award costs, and in those circumstances they may adopt a similar approach to that outlined in the first paragraph of Clause 2 above. The principles in the last paragraph of Clause 2 above also apply to arbitration proceedings.
4. Insurance and funding arrangements
You should check your existing insurances to see whether you are covered for legal expenses and, if you are a defendant to a claim or counterclaim, for any damages that you may have to pay to the claimant. If you believe you are covered, you should tell us and immediately notify your insurers.
If you do not have an existing policy which covers legal expenses, it may be possible to obtain "after the event insurance" from one of a number of specialist legal expenses insurers. After the event insurance may be obtained to cover both the fees and disbursements that you have to pay to us and the amount that you may have to pay to the other side if you lose. However, the premium payable for this type of insurance is not recoverable from the other side even if you win. If you would like us to investigate the possible availability of after the event insurance, or of third party funding to cover all the costs (if you are a claimant), for this matter please let us know and we can refer you to a specialist broker who can advise you on the appropriate cover. We accept no responsibility for the quality of information or advice which the broker may give you.
5. Termination of Engagement
If we are on the court record on your behalf in English litigation and our services have been terminated, you will file and serve notice of change of solicitor or of acting in person. Upon your failure to do this promptly, we shall have the right to apply to be removed from the court record as acting for you and recover from you the fees and expenses we incur. In cases that we consider (in our absolute discretion) to be urgent, we may exercise this right as soon as 24 hours after notifying you of your obligation above to file and serve notice of change of solicitor or of acting in person.