The senior costs judge has slashed a claimant’s costs bill in a high-profile media case because of the proportionality tests brought in by the Jackson reforms – despite deeming it to be ‘reasonable and necessary’.
The claimant, a primary school teacher, launched a privacy action against Mirror Group Newspapers after the Sunday People newspaper, following a tip-off from a source who found her mobile phone, discovered that she had been in a relationship with a Premier League footballer.
BNM v MGN Limited settled by consent a year later after the defendants agreed not to disclose the confidential information, to pay £20,000 in damages and to pay the claimant’s costs.
The claimant originally claimed costs of £241,817, including a 60% success fee for her solicitors, defamation firm Atkins Thomson, a 75% success fee for her counsel and a premium of £58,000 for after-the-event insurance.
After a detailed assessment, Master Gordon-Saker ruled that, subject to proportionality, success fees for solicitors and counsel were allowed at 33% and the full insurance premium was allowed as claimed. He assessed costs at £167,389, including solicitors’ fees of £16,780 and counsel’s fees of £14,687.
But he cut the bill to £84,855 after Mirror Group Newspapers claimed that the sums were disproportionate.
On the post-Jackson proportionality rule, Gordon-Saker (pictured) said: ‘It is clear that the new test of proportionality was intended to bring about a real change in the assessment of costs.’
He ruled that the tests should apply to additional liabilities as well as to base costs, and said that each of the items on the costs bill, apart from court fees, should be cut in half.
Noting that the claimant did not launch her claim until two years after she discovered the newspaper had obtained information on her phone, he said that the costs in the case should bear a ‘reasonable relationship to the value of the claim’.
Gordon-Saker said: ‘I do not think that the conduct of the defendant added significantly to the costs. Nor do I think that there were any wider factors involved in these proceedings. There was no real threat of publication and the claimant was not seeking in any real way to protect her reputation.
‘While the defendant's conduct can fairly be categorised as reprehensible, so much of civil litigation is based on the bad behaviour of others. I cannot see there was any wider public importance.’
He said that in these circumstances costs of £46,000 and counsel’s fees of £14,000 were ‘disproportionate’ under the new test, as it was three times the agreed damages and was for work that never went to trial.
He added that although the ATE insurance premium was necessary, it should also be halved to bear relation to the level the claim settled at.
Lord Justice Jackson will deliver the keynote speech at this year’s Commercial litigation conference, on Monday 10 October 2016 at the Law Society. Find out more here.