Dispute resolution in Guernsey is commonly international in its nature, frequently involving parties outside of this jurisdiction.
However, Guernsey is a distinct legal jurisdiction and only Guernsey Advocates are qualified to advise on Guernsey law and have rights of audience before the Guernsey courts.
Given the global nature of business in Guernsey, it is not uncommon for lawyers in other jurisdictions to be involved in disputes before the Guernsey courts. For example, parties based outside of Guernsey may have lawyers in their “home” jurisdiction with whom they have long established relationships with or have panel solicitors they use. In addition, where a matter involves a particular specialist area of law on which there is limited Guernsey case law or where Guernsey law may be influenced by that of other jurisdictions, Guernsey Advocates may instruct specialists from the English Bar or another appropriate jurisdiction.
The starting point as regards the recovery of costs incurred in a dispute before the Guernsey courts is that only the costs of Guernsey Advocates are recoverable. The Royal Court has rules regarding costs and fees which set down the rate of recoverable fees for Advocates.
However, it is recognised that there will be circumstances where the use of external lawyers is beneficial to the administration of justice. The courts will allow recovery of the costs of external lawyers where “exceptional and appropriate”.
Guidance on “appropriate and exceptional” circumstances was set down in the Royal Court case of Ladbrokes PLC v Galaxy International Limited, and several examples were provided:
These examples are not exhaustive but provide an example of the practical and constructive approach the Guernsey court will take in supporting litigants to access justice.
If you anticipate issuing proceedings in Guernsey and have retained lawyers in another jurisdiction (for example if you are an insurer using a panel firm) it is recommended that Guernsey Advocates are involved from an early stage to ensure that appropriate advice on recovery of costs is received.
Finally, it should be noted that VAT is not payable in Guernsey. Therefore, if external lawyers have charged VAT on their costs, that VAT is unlikely to be recoverable under a costs order in the Guernsey courts.
At Ferbrache & Farrell LLP, we frequently work with firms in other jurisdictions, insurers and unions. We welcome a collaborative and proportionate approach with our colleagues in other jurisdictions to ensure the best result is achieved for the client.