In Elkamet Kunststofftechnik GmbH v Saint-Gobain Glass France SA [2016] EWHC 3421 (Pat) , the claimant successfully won its patent case in the High Court of England and Wales and was awarded 93% if its legal costs.   However as a result, in part, of the outcome of the EU referendum, the exchange rate had fallen sharply during the life of the litigation from £1 to €1.39 to £1 to €1.14.  By the time Elkamet was awarded its costs, that award being made in pound sterling, the value Elkamet was entitled to on a summary assessment of it costs was significantly less than the value of fees it had paid to its solicitor.  In fact the Claimant argued that it would lose €29,602 or £25,193 if it was awarded the pound sterling equivalent from the Defendant. Elkamet argued that it ought to be compensated for the decline in the exchange rate since the proceedings were launched and particularly since the decision in the EU referendum.  The Defendant declined an offer to simply pay the costs in euros arguing that as the litigation was progressing in this jurisdiction any award should be expressed in sterling and satellite litigation over levels of exchange rates should be discouraged.  The Court agreed with Elkamet and compensated it for the exchange rate loss following the significant fall in the value of the pound.

This first instance decision has been welcomed by successful non-UK based parties to litigation who have suffered as a result of the recent, quite significant, currency fluctuations.  However, the decision was not followed in Bruce Macinnes v Hans Thomas Gross [2017] EWHC 127 (QB) in which the Court said it was “uncomfortable” about making a similar order.  Coulson J noted that any liability to pay for currency fluctuations is uncertain and wholly outside a party’s control.  He also pointed to the “generous” rate of interest on costs at 4% over base and suggested that this provides some protection to the payee against events such as currency exchange rate fluctuations which are outside the control of the parties.

It therefore remains to be seen whether we will see exchange rate losses claimed as a standard head of loss in any proceedings with a non-UK based Claimant but notwithstanding this uncertainty, if such a claim is applicable, it is certainly something worthy of consideration by litigating parties.