In (1) Meretz Investments NV (2) Britel Corporation NV v (1) ACP Ltd (2) First Penthouse Ltd (3) Hakan Olov Olsson (4) Annika Silja Olsson (5) Fahad Al Tamimi – Lawtel 21.11.07 the Chancery Court held that where there was no express agreement concerning the division of costs a general rule of thumb was to divide them equally between the relevant parties. However that was only a general rule and was not to be allowed to produce injustice. Where costs could be shown to be attributable to one party rather than to another, the liability fell only on that party.

Once it was established that a firm of solicitors was acting for a receiving party a presumption arose that the client was liable to pay the solicitor and the onus was on the paying party to rebut that presumption. In order to rebut the presumption it had to be shown that there were no circumstances in which the solicitor would be able to look to the client for payment.

As regards costs claimed in respect of work done by a lawyer who had advised in relation to the transactions giving rise to the litigation, those incurred in assistance or general preparation of the case as a solicitor and the cost of attendance at court were allowable. The work involved in producing his witness statement had two components: work done by him as a witness of fact; and work which would have been done by a legal team in producing the witness statement. The costs of that task were not allowable save to the extent that the work done in completing that task was attributable to the solicitor in his capacity as a solicitor rather than in his capacity as a witness of fact.