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Vardy v Rooney – Costs Assessment Misconduct Claim Rejected By Court of Appeal

The claimant (Vardy) lost a defamation claim against the defendant (Rooney) and was ordered to pay 90% of Rooney’s costs on the indemnity basis.

 

During the costs assessment, Vardy alleged that Rooney’s legal team had engaged in misconduct by understating incurred costs in their budget (Precedent H) while criticising Vardy’s higher incurred costs.

Key Issue on Appeal

Whether the defendant’s solicitors acted improperly or unreasonably (under CPR 44.11) by:

  • Listing only recoverable (not actual) incurred costs in their budget.

 

  • Criticising Vardy’s higher incurred costs without clarifying their own approach.

First Instance Decision

The Costs Judge found Rooney’s lack of transparency "not wholly satisfactory" but held it did not amount to misconduct. The defendant’s solicitors had interpreted Precedent H as requiring only costs they deemed recoverable on a standard basis which the Judge felt was a permissible approach per Pan-NOx Emissions Litigation [2024] EWHC 1728 (KB).

Appeal Ruling Key Points

Mr Justice Cavanagh dismissed the appeal. Emphasising a deference to the expertise of the Costs Judge, who he described as an experienced judge in a specialist jurisdiction he concluded that:

  • While greater transparency would have been preferable, the defendant’s solicitors credibly believed their approach complied with Precedent H’s wording and did not deliberately mislead the court or compare “apples with oranges” (as they assumed both sides used the same methodology).

  • CPR 44.11 Threshold was not met. Misconduct requires more than a misjudgment or lack of transparency. It must be unreasonable or improper by professional consensus (Bamrah and another v Gempride Ltd [2018] EWCA Civ 1367applied).

Conclusion

The appeal failed as the defendant’s conduct, though imperfect, did not cross the line into sanctionable misconduct under CPR 44.11:

‘None of the comments and observations relied upon by the Claimant’s legal advisers is clear evidence that the Defendant’s lawyers were covering up the fact that their incurred costs figures were less than their actual costs figures’

Takeaway

Transparency in costs budgeting remains paramount, but errors of judgment alone will not trigger sanctions absent dishonesty or professional impropriety.

Details

Vardy v Rooney – Costs Assessment Misconduct Claim Rejected By Court of Appeal

The claimant (Vardy) lost a defamation claim against the defendant (Rooney) and was ordered to pay 90% of Rooney’s costs on the indemnity basis.

 

During the costs assessment, Vardy alleged that Rooney’s legal team had engaged in misconduct by understating incurred costs in their budget (Precedent H) while criticising Vardy’s higher incurred costs.

Key Issue on Appeal

Whether the defendant’s solicitors acted improperly or unreasonably (under CPR 44.11) by:

  • Listing only recoverable (not actual) incurred costs in their budget.

 

  • Criticising Vardy’s higher incurred costs without clarifying their own approach.

First Instance Decision

The Costs Judge found Rooney’s lack of transparency "not wholly satisfactory" but held it did not amount to misconduct. The defendant’s solicitors had interpreted Precedent H as requiring only costs they deemed recoverable on a standard basis which the Judge felt was a permissible approach per Pan-NOx Emissions Litigation [2024] EWHC 1728 (KB).

Appeal Ruling Key Points

Mr Justice Cavanagh dismissed the appeal. Emphasising a deference to the expertise of the Costs Judge, who he described as an experienced judge in a specialist jurisdiction he concluded that:

  • While greater transparency would have been preferable, the defendant’s solicitors credibly believed their approach complied with Precedent H’s wording and did not deliberately mislead the court or compare “apples with oranges” (as they assumed both sides used the same methodology).

  • CPR 44.11 Threshold was not met. Misconduct requires more than a misjudgment or lack of transparency. It must be unreasonable or improper by professional consensus (Bamrah and another v Gempride Ltd [2018] EWCA Civ 1367applied).

Conclusion

The appeal failed as the defendant’s conduct, though imperfect, did not cross the line into sanctionable misconduct under CPR 44.11:

‘None of the comments and observations relied upon by the Claimant’s legal advisers is clear evidence that the Defendant’s lawyers were covering up the fact that their incurred costs figures were less than their actual costs figures’

Takeaway

Transparency in costs budgeting remains paramount, but errors of judgment alone will not trigger sanctions absent dishonesty or professional impropriety.