(a) Whether it is appropriate, notwithstanding the general rule in employment disputes that each party bears its own costs, that an adverse costs order in favour of the Claimant be made; and

(b) If so, what the nature and amount of that costs order should be.

(a) Paragraph 1.1 identifies that it was issued to enhance access to justice in employment-related disputes, recognizing the need for a proportionate, fair and efficient procedural framework within the DIFC Courts;

(b) Paragraph 1.2 applies the direction to all employment claims brought before the Court of First Instance;

(c) Paragraph 2 contains provisions:

(d) Paragraph 3.1 provides that the general rule in employment disputes shall be that each party bears its own legal costs;

(e) Paragraph 3.2 provides “The Court may, in its discretion, make an adverse costs order where: (a) a party has brought or conducted proceedings unreasonably; (b) a party has acted vexatiously or in bad faith; or (c) it is otherwise in the interests of justice to do so” and goes on to say that any such order must be proportionate and accompanied by reasons;

(f) Paragraph 4 provides that Employment proceedings shall, by default, be conducted in private but the Court may “upon application or of its own motion, lift confidentiality where it is necessary in the interest of justice, including but not limited to: 9a) public accountability; avoiding prejudice to third parties; or (c) preventing abuse of process” and further permits final judgments to be published in anonymized form unless the Court decides that full publication is warranted.”

(a) relies on the sub-paragraph (c) of paragraph 3.2 of PD 1/2025 in support of her submission that is “otherwise in the interests of justice” to make a costs order in her favour as the objectives of the practice direction would otherwise be undermined if she were left to bear the substantial costs herself; and

(b) emphasises the exceptional nature of jurisdiction challenges as arising before the merits are ever considered in employment claims.

(a) That there is no relevant distinction between a dispute as to jurisdiction and any interlocutory dispute;

(b) That PD 1/205 promotes access to justice through a costs neutral regime not through a regime under which a successful employee ordinarily recovers their costs;

(c) That there is no evidence or basis for the assertion that jurisdictional challenges are exceptional; and

(d) That the practice direction should not be interpreted so that costs orders become the norm in relation to jurisdictional challenges.

(a) That there were no relevant DIFC decisions indicating how the practice direction should be construed with the result that general principles of the common law should be sought (see [5]);

(b) That paragraph 3.2 created three exceptional gateways, one of which had to be established, in order for the general rule that each party bore its own costs to be disapplied (see [6]);

(c) That in relation to the first gateway (namely a party acting unreasonably) a strong analogy was to be drawn between the circumstances in which indemnity costs would be awarded and those where a party would be found to be acting unreasonable and that courts had generally required unreasonableness of a high degree in such circumstances (see [7] and [8]);

(d) That, given that the relevant application was one for expedition, the Claimant had to provide good grounds for such application and the Court had to provide its assent which mean that an application would always be required (see [9] and [10]);

(e) That the Defendant had not acted unreasonably to a high degree in the circumstances which meant that that there had not been conduct on the part of the Defendant which was sufficiently unreasonable to engage either the first gateway or any of the other gateways in paragraph 3.2 which meant that the Court had no discretion to order costs or, if that was wrong, that such discretion would not be exercised (see [11]).

(a) Emphasised the purpose of PD 1/2025 as being to enhance access to justice and that this involved the removal of costs barriers for employees where there is often a significant imbalance in power and resourcing between employer and employee;

(b) Drew attention to [47] of the Order of 4 August 2026 which had referred to the fact that national systems of law often apply minimum standards or requirements to employment disputes for humanitarian and economic purposes;

(c) Suggested that the purpose of the practice direction would be undermined if heavy applications were issued at minimal costs risk;

(d) Drew attention to the decision of the Deputy Chief Justice in Hallam v Natixis [2025] CFI 016 where he stated that the purpose of the practice direction was to implement a general not costs rule not immune parties to employment proceedings from paying costs altogether or limiting the Court’s case management powers with the result that the practice direction acts to give a starting point not enforce a no-costs obligation;

(e) Relied on the fact that the costs incurred by the Claimant amounted to about 25% of the total claim with the consequence that it was perverse for such costs not to be recoverable given:

(f) Asserted that the Jurisdiction Application should not have been brought given the terms of the Order of 4 August; and

(g) Further asserted that in considering whether to make an adverse costs order that the Court must consider all the circumstances of the case with the consequence that a relevant factor is that D1 decided to issue and resource an application rarely seen in employment disputes.

(a) The Deputy Chief Justice’s observations as identified in paragraph 9d) above to the effect that PD 1/2025 gives a starting point as to costs not enforcing a general no-costs obligation; and

(b) H.E. Justice Pelling’s analysis of the steps necessary to depart from the staring point in employment claims as set out in paragraph 8 above namely:

(a) The word “otherwise” plainly refers to the first two gateways with the consequence that the Court is considering a situation where the party against whom proceedings has been brought has not acted unreasonably (the first gateway) or vexatiously or in bad faith (the second gateway);

(b) The “interests of justice” plainly gives the Court a wide discretion but it, like any discretion, is one which has to be exercised judicially and, for which, as expressly stated in the practice direction, reasons have to be given;

(c) In the context of considering what the interests of justice require, particular attention should, in my view, be given to the stated purpose of PD 1/2025 itself namely to enhance access to justice in employment related disputes recognizing the need for a proportionate, fair and efficient procedural framework;

(d) The “interest of justice” is referred to in PD 1/2025 in two other places as well as paragraph 3.2”

(e) Paragraph 4.2 could plainly apply to both parties and go beyond considerations directly relating to the stated purpose of the Practice Direction and is therefore of limited if any relevance to paragraph 3.2

(f) Paragraph 2.1 would, however, seem to contemplate at least substantial overlap with consideration under paragraph 3.2 in that it involves consideration of fees and costs in relation to employment claims and, in particular, the likely effect of any order in promoting access to justice in employment-related disputes as identified in paragraph 1.1.

(a) D1 was not obliged to issue or pursue the Application;

(b) There may well have been other benefits for D1 in obtaining clarity as to the applicable jurisdiction for employment disputes with its employees given the apparent structure of its employment agreements and the location of its office in the DIFC.

(a) The overall purpose of the Practice Direction is to enhance access to justice in employment-related disputes;

(b) Giving effect to the “general rule” in paragraph 3.1 that each party bears its own costs, in the circumstances of this Application, would be likely to restrict rather than enhance such access to justice;

(c) There was no necessity for D1 to bring this Application;

(d) From the point of view of the Claimant, the only effect of the unsuccessful Application was to delay the resolution of her Claim and cost her money;

(e) The Application did nothing to further the substantive resolution of the dispute;

(f) The ordinary and natural home of this dispute (and the one provided for by legislation) was the Courts of the DIFC; and

(g) D1’s Application was, accordingly, one to deny access to justice at the ordinary and natural forum of the dispute.

(a) There is no explanation as to why two firms of solicitors were instructed and what work KBH did;

(b) There is no justification for having three solicitors and a barrister at the hearing;

(c) The Mischcon rates are higher than the indicative rates permitted by Registrar’s Direction 1 of 2023;

(d) There are sums in relation to attendances on others which are unexplained;

(e) AED 32,891.50 is sought in respect of work on negotiations when there were no negotiations in relation to the Application;

(f) AED 143,807 is excessive for work done on documents given that the Claimant’s witness statement totalled only 12 pages;

(g) AED 10,000 for local counsel advice and translation costs should not be permitted;

(h) The overall figure is excessive for a one day hearing and no more than AED 150,000 should be permitted.

(a) That the reason for having two firms was that the main fee earner moved firms and Mishcon de Reya was still obtaining DIFC registration with the contemplation that KBH would come off the record (as has now occurred);

(b) It was not unreasonable for there to be four fee earners at the hearing given that D1 had two solicitors and 2 counsel;

(c) Attendances on others included liaison with the Court, discussions with English Counsel and discussions with local counsel;

(d) The work on documents included considering 3 witness statements from D1 and skeleton arguments; and was reasonable;

(e) The Claimant is not seeking the costs of work done on negotiations;¹

(f) The local law advice was to obtain advice on a specific point in Mr Pilar’s second witness statement and a translation; and

(g) D1 has not shared its own costs of the Application which would likely have been higher than that of the Claimant.

(a) She had no choice but to fight the Application if she wished to maintain her Claim;

(b) This Application was important to her as an individual but it may well have been of greater importance to D1 given the consequences for its employees; and

(c) I suspect that there is considerable force in the Claimant’s suggestion that the Defendant’s costs were at least equal to hers given, in particular, that both leading and junior counsel were employed.

(a) Given the explanation, I do not consider that the employment of two firms leads, of itself, to a reduction, particularly given the modest amount of KBH’s costs;

(b) I do consider attendance by four fee-earners at the hearing to be excessive (and not justified by the fact that D1 also had four fee earners) with the consequence that a deduction should be made of AED 8,316 which appears to be the amount sought for the most junior fee-earner including VAT;

(c) I do not consider the rates charged to be excessive given the length of time since the Registrar’s Direction of 2023;

(d) The amount sought for work on negotiations, which is shown as AED 32,891.50 is not attributable to this Application;

(e) I further consider the overall amount of work done on documents to be high and requiring a modest reduction;

(f) I consider that there is likely to have been some modest duplication in some of the attendances

(g) I consider the Claimant’s explanation for the other points to be reasonable.