The Duke of Sussex and six other high-profile figures may have to cover millions of pounds personally after their unsuccessful legal action against Associated Newspapers Limited (ANL), the publisher of the Daily Mail, due to a shortfall in insurance cover.
Failed legal action and cost hearing
A group including Baroness Doreen Lawrence and Sir Elton John sued ANL over allegations of unlawful information-gathering, which the publisher strongly denied. After an 11-week trial in London, Mr Justice Nicklin dismissed all claims in a 436-page judgment on July 7. The case returned to the High Court on Wednesday for a hearing on costs.
The court heard that ANL's costs exceed £34 million, while the claimants' combined insurance cover is £16.2 million, leaving a potential gap of many millions.
Arguments over indemnity basis
ANL's barrister, Antony White KC, argued that the group should pay costs on an indemnity basis rather than the standard basis, which would allow ANL to recover a larger amount. He claimed the legal action was brought for a "collateral purpose" of pressuring the government to introduce the second stage of the Leveson Inquiry, describing it as "a campaign rather than ordinary and reasonable litigation."
White said the cases were launched with a press release in October 2022, calling it "a monstrous thing to publish" intended to be as damaging as possible. He also said Baroness Lawrence was "recruited as the national treasure," which he called a matter of regret for his client.
Claimants' response
Nicholas Bacon KC, for the claimants, urged the judge not to award costs on the stricter indemnity basis. In written submissions, he said that if costs were awarded on that basis, the current insurance cover would be insufficient, possibly by many millions of pounds.
Bacon said ANL's incurred costs as of earlier this month were nearly £34.5 million, exceeding its approved budget by more than £18.6 million. He described this as "an astonishingly high legal spend" and a "cavalier approach" to proportionality.
He argued that the claimants had acted honestly and in good faith, that the court had largely accepted their evidence, and that the case had merit. He said it would be unjust to order costs on an indemnity basis.
Decision pending
The hearing before Mr Justice Nicklin is expected to conclude on Wednesday or Thursday, with a written decision to be issued later. Arguments about potential appeal bids have been deferred until after costs are finalised.
