Landmark Constitutional Costs Ruling Opens the Door to Public Law Challenges in Gibraltar
Author: Charles Gomez & Co
• Acting for VSB Limited, Charles Gomez & Co successfully advanced arguments that led the Supreme Court of Gibraltar to adopt, for the first time, a constitutional costs principle protecting bona fide claimants challenging the State.
• The Court held that genuine constitutional litigants should not ordinarily be liable for the Government's legal costs simply because they are unsuccessful.
• The Court also limited the Government's recoverable costs to those of a local legal team, rejecting recovery of substantial London King's Counsel fees in the absence of prior approval.
• The ruling is likely to have lasting implications for constitutional litigation and public law challenges in Gibraltar.
Not every constitutional case is won or lost on the merits.
Sometimes, it’s the costs ruling that shapes the future of public law.
In VSB Ltd v HM Government of Gibraltar & Ors (Supreme Court of Gibraltar, 2026/GSC/020), Chief Justice Dudley handed down a notable post-judgment decision on costs not just about who pays, but why.
Mr Allan Asquez, the owner of a popular sports bar at Gibraltar’s Victoria Stadium, had brought a constitutional motion against the Gibraltar Government and others. He did not win. But he did persuade the court to do something of importance from both an academic and financial perspective, which was to adopt, for the first time, the principle long familiar in other common law jurisdictions (but not England) from the cases of Ahnee (Mauritius) Biowatch (South Africa) and Barbosa (Bermuda) - namely, that where a claimant brings a genuine, non-frivolous constitutional challenge to the state, the usual “costs follow the event” rule does not apply.
Put simply, if you lose a bona fide constitutional case, you don’t usually have to pay the government’s legal bill and if you win, the government should normally pay yours.
That’s now the default in Gibraltar constitutional litigation.
Why this matters
Because constitutional claims aren’t just legal disputes, they are public tests of power. They often clarify the meaning of rights for others who weren’t parties to the case, and they should not be chilled by the threat of undue financial burden.
The twist in VSB is that the court took a nuanced path. The motion involved two limbs: a constitutional challenge and a separate vires claim. The former engaged the new principle; the latter did not. So, the court split the costs, VSB was ordered to pay only 50% of the government’s costs.
Equally striking was the ruling on who’s fees could be recovered.
VSB was not one of the high-value commercial disputes that regularly come before the Gibraltar courts. Nevertheless, the Government instructed two of the most prominent London King's Counsel and their respective teams, who were brought into the case shortly before the hearing.
Chief Justice Dudley made clear that Gibraltar citizens seeking constitutional protection will not be burdened with imported firepower. The government, he held, was entitled to recover only for the costs of a home-grown legal team, unless advance leave had been sought and justified. None had.
As a result, VSB’s liability was limited to 50% of the Government's recoverable costs to be assessed by reference to local counsel rates only.
This is a significant moment in Gibraltar’s constitutional jurisprudence, one that puts access to justice ahead of punitive costs, and reins in the growing arms race of legal fees. The Gibraltar courts are thus, still open to citizens wishing to have their constitutional rights tested.
An important decision, and one likely to resonate far beyond the Rock.