Conyers’ Norman Hau and Catherine Wong examine the latest offshore positions and guidance from recent cases.

As is the case in most common law jurisdictions, the general costs principle in so-called ‘offshore jurisdictions’ or ‘British Overseas Territories’, including the British Virgin Islands (BVI), Cayman Islands and Bermuda is that costs follow the event, and the loser normally pays the winner’s costs. The rationale behind this principle is that a successful party to any proceeding should recover from the opposing party the reasonable costs incurred by him in conducting that proceeding in an economical, expeditious and proper manner, unless otherwise ordered by the Court.

This article focuses on costs in respect of “foreign lawyers” who work on “offshore law” but are qualified in jurisdictions outside offshore jurisdictions. Foreign lawyers who practise offshore law are not uncommon. The factors traditionally cited as reasons for the popularity and broad appeal of practising law in British Overseas Territories include a legal system which is based on common law; confidence in the judiciary with rights of appeal to the Judicial Committee of the Privy Council in London; legal, accounting, banking and fiduciary service providers which meet the highest international standards; and convenient time zones.

In addition, given the cross-jurisdictional nature of disputes litigated in offshore jurisdictions, parties frequently instruct overseas legal counsel, and multiple law firms and/or jurisdictions may be involved in a single dispute.

In litigation proceedings, understandably, how much of the winning party’s costs can be recovered from the unsuccessful party is an important consideration for insurers, funders and, of course, the parties involved in the disputes. In each of the BVI, Cayman Islands and Bermuda, can the costs of foreign lawyers be recovered from an unsuccessful party? If so, how much of these costs can be recovered?


Pursuant to section 18(3) of the BVI Legal Profession Act (the LPA), the general rule in respect of costs of legal practitioners is that costs due to lawyers who are not on the roll maintained by the Registrar of the BVI High Court are not recoverable. This is because, as highlighted by various judges in key BVI judgments, it is only proper that BVI cases should be conducted by BVI-qualified legal practitioners, and the BVI Courts have been careful to protect the standing of the BVI Court and of the BVI legal profession by interpreting the provisions of the LPA accordingly.

Interpretation by the BVI Courts of section 18 of the LPA has been strict. It has been the position that any costs of foreign lawyers, however incurred, cannot be recovered under the section, and no exception is made for work carried out under the supervision of a BVI legal practitioner. There is no recent BVI case law that suggests otherwise, although we are aware of the BVI Bar Association now starting a consultation process to comment on this position. We anticipate that further clarifications by the BVI Director of Public Prosecutions, the BVI Bar Association and the Attorney General will follow.


The position in the Cayman Islands is less restrictive. A recent case has provided further guidance on the circumstances in which the Cayman Court will permit foreign lawyers’ costs to be recovered, relying on one of the exceptions to the general rule that work done by foreign lawyers is generally not recoverable.

The starting point is that the principles upon which costs are awarded are governed by Order 62 of the Grand Court Rules (GCR). With reference to Order 62, rule 18 of the GCR, costs of foreign lawyers may only be recovered on taxation on the standard basis provided that, first, the foreign lawyer has been temporarily admitted as an attorney and, second, the work was done after he was admitted. There are however three exceptions to the rule: first, fees can be claimed as disbursement where expert evidence is required from foreign lawyers regarding foreign law issues that arise in Cayman proceedings; second, where an order for indemnity cost was granted to the successful party; and third, where the Cayman Court grants a dispensation, and fees can be recovered on taxation on the standard basis.

The limitations on costs recovery outlined above reflect the long-established public policy of the Cayman Islands. While costs incurred by foreign lawyers are not improper and will not unnecessarily cause delay, the Cayman Courts have indicated that they are inherently uneconomic, as work done by foreign lawyers could result in some duplication of work and some extra cost, which is contrary to the limitations on cost recovery. Such limitations were intended to protect a party from the financial consequences of his opponent’s decision to conduct his case in an extravagant manner, by engaging foreign lawyers in addition to local lawyers. Also, the limitations were intended to deter litigants from conducting their case through unqualified persons, who are not subject to the disciplinary regime applicable to Cayman attorneys.

In the March 2023 decision in Grand State Investments delivered by the Grand Court, the Court found that it was satisfied that a dispensation was appropriate in the circumstances, and allowed costs incurred by attorneys in Hong Kong and China to be recovered. In summary, Grand State had retained lawyers in Hong Kong and China to advise on legal issues connected to and/or governed by Hong Kong and Chinese laws, both of which were connected to the Cayman winding-up proceedings. Mr Justice Parker concluded that while a mere desire to communicate with lawyers in a party’s own language or time zone is not sufficient to warrant a dispensation with the usual rule against recoverability of foreign lawyers’ fees, given the various issues of foreign law which were integral to the proceedings, it was necessary for Grand State, in the proper preparation of its defence, to engage foreign attorneys. Moreover, the Cayman Court also held that this was a matter of which the petitioner should have been aware given the nature of the issues.


In contrast with the positions in the BVI and Cayman Islands, there is no statutory provision or rule in Bermuda limiting the recoverability of foreign lawyers’ fees. The Bermuda Courts follow the English common law approach, allowing recovery of foreign lawyers’ fees on an assessment or taxation of costs where it can be shown that the costs were necessary and proper for the attainment of justice.

To avoid difficulty for the taxing master in deciding the proper rate of charge for relevant services, a bill of cost should normally be prepared, detailing the circumstances which required the services of foreign lawyers, accompanied by a detailed charge for the individual items.


We set out below some practical steps that potential litigants in the BVI, Cayman Islands and Bermuda can take to ensure most costs incurred by their legal representatives, including those incurred by foreign lawyers, can be recovered from an unsuccessful party in an offshore litigation.

First, if litigants are relying on insurance to pursue or defend proceedings, it is important to read the policies in detail, and consult with the insurer as appropriate. It is possible that insurers may refuse to cover the foreign lawyers’ costs, but some may be open to reimbursing litigants for work carried out by foreign lawyers.

Further, litigation funding agreements are lawful in contentious matters in the BVI, Cayman Islands and Bermuda. Entering into these agreements would be helpful as they can be drafted to address how non-recoverable legal fees are to be treated.

Overall, it is conceivable that costs incurred by foreign lawyers might be challenged under certain circumstances and in certain offshore jurisdictions. The relevant courts would decide on the facts before them, and it is important to seek offshore law advice before incurring expenses.

Norman Hau is a partner and Catherine Wong is an associate in the dispute resolution practice of Conyers’ Hong Kong office

This article was first published in Commercial Dispute Resolution.

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