High Court further decides on new test of Proportionality

The reader is referred to the preceding paper on MGN Wave 1 proportionality.

The parties were able to agree the reasonable individual base costs of 64 out of the 65 Wave 2 Claimants, the exception being Mr Jackson Scott, whose costs had previously been sent for detailed assessment before the Senior Costs Judge. They were also able to agree the reasonable and proportionate common costs in respect of each claim, being £7,716 (excluding VAT). The proportionate costs of all but ten Claimants in the Wave 2 litigation were agreed shortly prior to the hearing in question. The Senior Costs Judge was asked to determine the proportionate costs of the remaining ten claims.

Simon Browne QC and David Sherborne appeared for the Claimants and George McDonald for the Defendant.

CPR 1998

As with the Wave 1 claims, it was agreed that the post-LASPO proportionality test applied to each of the ten Wave 2 claims in issue:

Rule 44.3 of the Civil Procedure Rules

(2) Where the amount of costs is to be assessed on the standard basis, the court will –

(a)   only allow costs which are proportionate to the matters in issue. Costs which are disproportionate in amount may be disallowed or reduced even if they were reasonably or necessarily incurred; and

(b)   resolve any doubt which it may have as to whether costs were reasonably and proportionately incurred or were reasonable and proportionate in amount in favour of the paying party.

[…]

(5) Costs incurred are proportionate if they bear a reasonable relationship to –

(a)   the sums in issue in the proceedings;

(b)   the value of any non-monetary relief in issue in the proceedings;

(c)    the complexity of the litigation;

(d)   any additional work generated by the conduct of the paying party; and

(e)   any wider factors involved in the proceedings, such as reputation or public importance.

Judgment

As in the Senior Cost Judge’s judgment on the proportionality of the Wave 1 claims[1], each of the five factors were considered in turn:

(a)   the sums in issue in the proceedings;

The Judge took a broad view of “sums in issue”, finding that the sums in issue will inevitably vary over the lifetime of any given claim. He took as a range the band of £30,000 to £50,000 as the sums in issue for the five claims which settled below £50,000, and a band of £50,000 to £100,000 for the five claims which settled at and above £50,000.

(b)   the value of any non-monetary relief in issue in the proceedings;

As in Wave 1, despite the Wave 2 Claimants not having the same benefit of a judgment following trial, the Senior Costs Judge found “it seems to me that the injunctions that were sought and the undertakings, statements in open court and apologies that were given were of substantial value. These claims were not just about damages” (paragraph 50).

(c)    the complexity of the litigation;

MGN’s Defences of “mitigation” in Wave 2 took article-specific issues on quantum, which were not taken in Wave 1. Unlike in the Wave 1 litigation, the Claimants were required to prove a causal link between the hacking and many of the articles published.

The Judge therefore found that “although the methodology for the calculation of damages was resolved in the Wave 1 judgment and subsequent decision of the Court of Appeal, and although there had been a general acceptance of wrongdoing by the Defendant, I do not accept that these claims were straightforward. The need to establish the articles which resulted from information derived from phone hacking, the number and nature of the interlocutory hearings and the estimated length of the trials (10 days for groups of 4 or 5 cases) take these cases out of any comparison with the straightforward or run-of-the-mill” (paragraphs 51-52).

(d)   any additional work generated by the conduct of the paying party; and

As in his judgment on the proportionality of the Wave 1 claims, the Senior Costs Judge did not accept that hard-fought litigation with fairly major interlocutory skirmishes amounted to “conduct” generating additional work.

(e)   any wider factors involved in the proceedings, such as reputation or public importance.

The Judge found, as in his Wave 1 proportionality judgment, that there were a number of wider factors involved in Wave 2. The “deplorable conduct of the Defendant made these claims of continuing public interest and importance” (paragraph 56) and the reputations of the Claimants were engaged as much as they had been in Wave 1. The Wave 2 Claimants were faced with denials and non-admissions despite the judgment in Wave 1, and therefore there was also a degree of vindication to be considered.

The Judge once again held that in each of the ten remaining Wave 2 claims, the agreed reasonable individual costs were also proportionate, even when taking into account the common costs.

Conclusion

The Senior Costs Judge reinforced his finding in the Wave 1 proportionality judgment that costs can be proportionate even though they exceed damages. He was of the view that the sums in issue should be looked at as a whole range across the litigation and not just the pleaded figures claimed or the settled figures.

[1]Various Claimants v MGN, 1 June 2018

View the Judgement here

 

2018-09-12T17:24:22+00:00 August 7th, 2018|News, Uncategorized|0 Comments

Leave A Comment

error: Content is protected !!