The court's decision provides insights into cost management and the emphasis placed upon proportionality and efficiency in high-profile litigation.
Background
The court considered cost budgets presented by both claimants and the defendant. Despite the case’s prominence, Senior Master Cook stressed that the underlying issues—whether unlawful methods were employed to gather information for the articles in question—were primarily fact-based and not exceptionally intricate. The judges (Senior Master Cook and Mr Justice Nicklin) found the proposed costs to be "manifestly excessive and therefore disproportionate."
Key factors influencing this conclusion included:
- Contingent Costs: Significant sums in the budgets were allocated to speculative developments, such as disclosure applications, amendments, or strike-out applications.
- High Hourly Rates: The defendant’s solicitors charged rates far above prevailing Guideline Hourly Rates (including £740 for Grade A fee earners).
- Overlap of Claims: Despite engaging separate legal teams, the claimants' cases significantly overlapped, with the same counsel team instructed by three firms - yet the proposed budgets failed to take due account of this.
- Uncertainty in Litigation Trajectory: The parties' plans for trial progression involved considerable ambiguity.
- Legal Team Expertise: The claimants’ legal teams, with experience in similar cases including the Leveson Inquiry, were deemed well-equipped to manage the litigation without starting from scratch - yet the proposed budgets failed to account for that well of experience.
Cost Management and Case Budgets
Senior Master Cook required amended budgets, distinguishing individual costs from common costs (the claimants’ initial method—calculating common costs and distributing them among individual solicitors—was revised).
Although no Group Litigation Order (GLO) was in place, the court directed the parties to draft a cost-sharing provision for inclusion in the case management order. This approach meant that the Court could address/approve a single budget for the Claimants and the Defendant, which the judge said "provides a far more transparent mechanism for controlling the budgeted costs in circumstances where there is a substantial generic case presented with a large degree of overlap between individual claims."
When the parties failed to agree on revised budgets, the court set the budgets for the remaining litigation phases, focusing on proportionality while avoiding excessive detail on every litigation phase.
Revised Costs Allowances
Senior Master Cook significantly reduced the proposed budgets, approving the following allowances:
The approved total budgets were £4,084,000 for the claimants (down from £18,744,761.72) and £4,445,000 for the defendant (down from £19,850,282.40).
Judicial Commentary
Senior Master Cook emphasised that costs management should focus on setting reasonable, proportionate boundaries for litigation costs, rather than reducing them to the lowest possible level. While acknowledging the case’s factual complexities, the judge noted these were typical of court proceedings and did not justify excessive budgets.
The court also reiterated the importance of efficient litigation, particularly in high-profile cases, ensuring proportionality governs costs allocations.
Conclusion
The judgment demonstrates that courts will scrutinise even large costs budgets with rigour, and even in prominent and complex cases. Proportionality remains the cornerstone of the costs budgeting regime, with courts striving to ensure litigation is managed efficiently and equitably. The judgment serves as a reminder of the need to ensure that budgets are anchored in realistic costs projections.
