Christmas costs showdown

One of the most controversial cases of the last decade is being heard by the senior costs judge Master Hirst and Mr Justice MacDuff in the Senior Courts Costs office this week as Leigh Day & Co tries to justify its £105m legal bill for its part in the Trafigura case.


Sean Wilken QC
Sean Wilken QC

The revelation that Leigh Day had claimed a 100 per cent success fee as part of its £105m bill stunned the profession.

Trafigura’s counsel, Sean Wilken QC of 39 Essex Street, told the High Court that the fees were “staggeringly high”, adding: “I’m told that this is one of the largest – if not the largest – costs claims in legal history.”

Yet Leigh Day partner Martyn Day, who represented the 30,000 Ivory Coast residents who sued oil company Trafigura, insisted that the risks involved with such a complex case meant the firm could justify the 100 per cent uplift.

“These cases are a massive risk,” says Day. “You’re talking about claimants who live in a war-torn country and you’re up against a company that turned over $80bn (£54.41bn) last year. They’re fighting for their reputation and the battle is fierce. The risks are extremely high.

“It’s entirely right that we should be compensated for that risk.”

But the case never reached the High Court and the £100m claim was settled without Trafigura admitting liability, although it did pay £30m into a compensation fund to be distributed amongst the 30,000 claimants.

In the build up to the trial, media firm Carter Ruck was instructed by Trafigura to shut down rumours circulating in the press about the company’s alleged involvement in the dumping of toxic waste that was alleged to have caused health problems for the claimants.

Claims were launched against the BBC and The Guardian, while Day was the recipient of a libel writ from the defendant company.

When the settlement was reached MacDuff J, who is also hearing the costs case, commented: “I’ve been following what’s been happening in the media both in the newspapers and on TV and radio. I’ve witnessed myself how wildly inaccurate some of the statements have been.”

This will no doubt be a point of contention at the costs hearing, with Trafigura’s counsel closely scrutinising the itinerary of costs built up by the firm.

Judgment in the case is expected to come early next year and will cause yet more controversy. But it could still be that Trafigura, whose legal bill for the case amounted to £14m (£91m less than Leigh Day), that comes out on top.

Timeline

August 2006: Oil tanker Probo Koala dumps 400 tonnes of toxic waste in and around Ivory Coast capital Abidjan.

September 2006: Trafigura commissions scientists to investigate effects of the dumping.

November 2006: Leigh Day launches class action against Trafigura.

February 2007: Trafigura agrees a $200m (£136.04m) settlement with the Ivory Coast government, but does not accept liability.

March 2008: The Ivorian Court of Appeal says there is insufficient evidence to pursue criminal charges against the company.

11 September 2009: Carter-Ruck issues a ’super-injunction’ in the High Court on behalf of its client Trafigura to prevent The Guardian from publishing the Minton report.

Mid-September 2009: Trafigura issues libel threats against The Guardian and the BBC via Carter-Ruck.

23 September 2009: Trafigura agrees to compensate 31,000 claimants with around £1,000 each. The payout offer amounts to a total of around £30m. The company refuses to admit liability.

12 October 2009: The Guardiancontacts Carter-Ruck with a copy of Paul Farrelly MP’s parliamentary question, which refers directly to the Minton report and the injunction againstThe Guardian

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13 October 2009: The Guardianbrings a formal challenge to the super-injunction before Mr Justice Tugendhat.

16 October 2009: Carter-Ruck lifts the injunction.

13 May 2010: Leigh Day and Trafigura’s lawyers meet in court to discuss costs.

6 December 2010: Costs hearing at Senior Courts Costs office before Master Hurst and Mr Justice MacDuff.