The High Court has ordered the Investor Compensation Company DAC (ICCL) to pay the official liquidator’s costs on a solicitor and own client basis for an information and distribution restriction motion linked to the ICCL’s unsuccessful directions application concerning its asserted subrogation rights.
Mr Justice Heslin’s ruling dealt with costs, not the underlying dispute, which had been decided in a judgment delivered on 13 October 2021. The parties had agreed the form of final order on most matters but disputed who should bear certain costs and whether the liquidator’s costs should be assessed on an indemnity basis.
The ICCL brought its information motion in July 2019, seeking client and asset information from the liquidator. At the hearing, it also sought to restrict distributions to clients. The liquidator raised concerns about data protection and about withholding client assets while the ICCL pursued its position on subrogation. Orders made in August and October 2019 restricted distributions, including a requirement to retain €20,000 per client. The court’s costs ruling records that those restrictions were to be vacated; it does not revisit whether the information should have been provided or determine whether the liquidator’s GDPR advice was correct.
Mr Justice Heslin found that the information and stay motion was brought to prepare for the directions application and could not fairly be treated as a separate dispute between the ICCL and the liquidator. The court had rejected the ICCL’s interpretation of its subrogation rights in the October 2021 judgment. The judge said the liquidator had acted on bona fide legal advice and that it was not appropriate or necessary in deciding costs to determine whether that advice was correct.
The judge ordered the ICCL to bear the costs of the information and stay motion, including costs due to Mr Nugent, a notice party. He also directed that the liquidator’s costs be assessed on a solicitor and own client basis, describing this as the just outcome in the unusual circumstances. He said the costs arose from the ICCL’s decision to pursue claims that the court had rejected, and should not potentially fall on the liquidator, the company or its clients.
The court declined, however, to include wording that would automatically require the ICCL to pay the costs of any adjudication of the liquidator’s costs. The judge said that would risk interfering with the Legal Costs Adjudicator’s authority under the court rules, including to consider whether a special reason justified a different outcome. He invited the parties to submit an agreed order reflecting the ruling.