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Duke of Sussex & Ors v MGN Ltd (Re Costs)

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Duke of Sussex & Ors v MGN Ltd (Re Costs) [2024] EWHC 274 (Ch)

This case deals with the costs decisions reached by Justice Fancourt following the trial of 3 of the 4 test claims in the mirror newspaper hacking litigation, Ms Sanderson, Ms Wightman & Mr Turner. The fourth being the action by the Duke of Sussex which was being considered separately. 

The first Claimant, Ms Sanderson's, claim failed on limitation grounds. But for that, she would have been awarded £67,500 in damages, in addition she would have failed to beat Calderbank and Part 36 offers made by MGN before her claim was issued.

Ms Wightman's claim failed on limitation grounds. But for that, she would have been awarded £22,750 in damages. There were no Calderbank or Part 36 offers in her case.

Mr Turner’s claim succeeded in part, he was awarded damages in the sum of £31,650 but only succeeded on 4 out of the 28 articles relied upon and failed to beat Calderbank and Part 36 offers.

The costs decisions are somewhat complex as there were two main and distinct parts to the trial that took place last year. The first was the generic part of the claims, concerned with the period during which MGN was carrying on unlawful and illegal activities; to what extent and whether they tried to cover it up.

The second part of the trial was the individual claims for damages of the 4 sample claimants regarding articles that were published about them and unlawful information gathering (UIG) activity directed at them.

Individual Claims

In the Sanderson and Wightman claims, where both  failed on limitation, they were ordered to pay MGN its individual costs of their claims. Firstly, the claimants were plainly on notice of the risk of the limitation defence succeeding. Secondly, in Ms Sanderson’s case, MGN made two generous offers to settle before the claim was even issued, for sums significantly more than she would have recovered. This removed any realistic argument that she should not have to pay MGN’s individual costs.

Ms Wightman did succeed in establishing more occasions of UIG than MGN had admitted in her case, but not to a very significant extent, and she did not succeed in proving that her private information was obtained by hacking of her phone. On that basis, Ms Wightman did not have a sufficient degree of success to justify depriving MGN of its costs of her individual claim.

The third Claimant, Mr Turner, was the successful party overall at trial, including on the generic issues, but failed to beat both a Calderbank and a Part 36 offer and was also not successful on all of the issues raised. MGN accepted that they were liable to to pay costs up to the expiry of the offer but Mr Turner contended he should not be required to pay any of their costs. In making his decision Justice Fancourt stated:

“Mr Turner was given another chance to walk away with compensation in money and all his reasonable costs up 25 March 2023 when MGN made its Part 36 offer, shortly before the trial, but he did not accept it. That failure to accept a reasonable offer at a late stage and recoup his costs reinforces the conclusion that I have reached, and indeed requires an order under CPR 36.17(3) that Mr Turner pay MGN’s costs from 25 March 2023 unless I consider that it would be unjust to do so. I do not consider it would be unjust to do so as regards the individual costs of his claim.”

Trial of the Generic Issues

When reaching their decision on the generic issue trial, Justice Fancourt outlined that the generic issues were for all practical purposes a separate trial alongside (but supporting) the trial of the individual claims. It would therefore be wrong to conclude that the common costs of the trial of those issues should simply follow the incidence of the individual costs or to make an order on the basis that in overall terms MGN has won. Despite MGN being the successful party overall in 2 of the 4 claims tried, there were very substantial and important issues on which it failed and on which the claimants had a conspicuous success.

Given the scale and nature of the trial it was not appropriate to make a proportionate or issues-based costs order with no order for the costs of the generic issues.

Justice Fancourt stated:

“Unusually, this is a case where justice was only done by awarding the claimants their costs of the generic issues separately……… offends all sense of fairness for the claimants as a whole not to be awarded their costs of the trial of those issues, on which they have collectively succeeded.

The claimants have uncovered and proved the shockingly dishonest way that MGN acted for many years. It would also be unjust because the common costs of the generic issues were incurred for the benefit of all the claimants, not just for the benefit of the 3 claimants.

The costs on both sides have been significantly increased because of MGN’s attempts to conceal the truth, in particular the extent of the unlawful and illegal activity.

I consider that, exceptionally, MGN should pay the claimants, including Ms Sanderson, Ms Wightman and Mr Turner, their common costs of the generic issues.”

Indemnity Costs

This was an unusual case where the conduct of each party led the Judge to make an order for indemnity costs against some of the claimants and the defendant.

The Judge was in no doubt that indemnity costs should be awarded to the Claimants in the generic issues claim. The defence ran by MGN was dishonest and attempted to conceal the extent of the unlawful and illegal activity which took place. The Judge outlined that it was difficult to imagine a clearer case for costs to be paid on an indemnity basis.

Due to Ms Sanderson’s conduct, an unreasonable approach to settlement negotiations, and findings of exaggeration leading to significantly increased costs meant that the Judge awarded costs in her individual claim to MGN on the indemnity basis.

MGN only sought standard basis costs against Ms Wightman.

Costs were only payable by Mr Turner because he did not beat the settlement offers made by MGN. Again, the Judge found his claim to have been exaggerated, unrealistic and that he was unwilling to engage with settlement. Therefore, indemnity costs were again awarded to MGN from the date of expiry of the offer.

This decision highlights the importance of conduct and engaging with settlement at all stages in litigation in order to avoid significant consequences.