Court of Appeal Calls £2m Brief Fee for a Four-Day Russia Arbitration Enforcement Appeal 'Astonishing', Orders Reduced Security for Costs of Nearly £1m
The Court of Appeal has described as 'astonishing' a £2 million brief fee charged by leading counsel to act on a four-day appeal in long-running litigation brought by three companies seeking to enforce arbitration awards against Russia, and has ordered a significantly reduced amount of security for costs. The case, which began in 2015, concerns three arbitration awards made in The Netherlands in which the tribunal found Russia liable to pay the claimant companies around $50 billion in compensation plus interest. Following extensive Dutch proceedings over the validity of the awards and a preliminary issue on state immunity heard in the Commercial Court in 2023, Russia is now appealing a decision by Mr Justice Bright handed down earlier in 2026 on various other preliminary issues. The substantive appeal is listed for hearing next summer. The respondent companies sought £2.5 million in security for costs based on an anticipated total costs bill of over £3.6 million. The costs schedule included: a £2 million brief fee for leading counsel plus refreshers of £20,000 per day; a £375,000 brief fee for junior counsel; and £125,000 for a consequentials hearing. Lord Justice Fancourt, sitting with Lord Justice Phillips, rejected the use of those figures as a baseline, describing the schedule as 'too extravagant' and noting that 'however much the respondents choose to spend on their lawyers, the appellant can only be expected to pay what is reasonable and proportionate.' The court allowed £600,000 as sufficient security for counsel's fees alone and ordered Russia to pay nearly £1 million in total security for costs. Counsel for the respondents before Bright J included Jonathan Crow KC, David Peters KC, Guy Olliff-Cooper and Naomi Hart.
Why this matters
This ruling has immediate implications for how security-for-costs applications are assessed in high-value commercial litigation, particularly where one party is a sovereign state with strong incentives not to satisfy an adverse costs order. Fancourt LJ's explicit refusal to use the respondents' costs schedule as a baseline, on the ground that it was 'too extravagant', signals that courts will scrutinise elite counsel fees even in the most complex, high-value disputes rather than simply awarding a percentage of whatever the winning party elects to spend. The $50 billion underlying liability and Russia's well-documented resistance to paying the awards give the decision significant geopolitical as well as commercial colour. The case also illustrates the limits of 'market forces' as a justification for fees in an inter partes costs context, a distinction every litigator and their clients need to understand.
On the Ground
This decision is directly relevant to commercial litigation, international arbitration, and costs law practice groups. Disputes lawyers advising claimants seeking to enforce arbitration awards against sovereign states will need to advise on the security-for-costs risk and on how courts will assess the reasonableness of proposed costs schedules. The ruling also matters for firms setting or advising on elite counsel brief fees: the judgment makes clear that 'seniority and market forces' will not justify fees against the proportionality standard a costs judge applies. No specific law firms are named in the sources as acting solicitors. A trainee on this matter would prepare a costs schedule, research the legal test for security-for-costs orders, assist in drafting a skeleton argument on the proportionality of counsel fees, and compile a chronology of the Dutch and English proceedings for the trial bundle.
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