Prince Harry could have to pay millions of pounds from his own pocket to cover the costs of his failed legal action against the publisher of the Daily Mail.
A group of seven household names, including the Duke of Sussex, Sir Elton John and Baroness Doreen Lawrence, sued Associated Newspapers Limited (ANL), accusing it of unlawful information gathering. ANL strongly denied the claims. Earlier this month, following an 11-week High Court trial in London, the claims were dismissed in their entirety in a 436-page judgment.
Costs Hearing
Today, the case returned to the court for a hearing over costs, where it was heard that there was a shortfall between the insurance cover and ANL’s costs, which are more than £34 million.
At the hearing, lawyers for ANL said the group of household names, which also include Sadie Frost, Elizabeth Hurley, David Furnish and former MP Sir Simon Hughes, should pay its costs on an indemnity rather than a standard basis, which would be more favourable to ANL in terms of the amount they can recover.
Arguments Over Indemnity Basis
Antony White KC, for the publisher, said the legal claims were brought for a “collateral purpose” of trying to pressure the Government into introducing the second stage of the Leveson Inquiry, describing it as “a campaign rather than ordinary and reasonable litigation”.
The barrister said that the cases “were launched in a blaze of publicity knowing that these were likely to attract significant attention on the world stage” with a press release in October 2022. Discussing the high-profile figures, Mr White said: “They knew that this was an all-out attack on Associated. They were at pains to emphasise that there were others who could join the bandwagon.” Mr White also said he was “sad” to say that Baroness Lawrence was “recruited as the national treasure”, adding: “That is a matter of regret for my client, but it is not to be shrunk from.”
The barrister later criticised the breadth of the allegations and how they “shifted”. He said that the claimants cast a “strikingly wide” net for their claim “in the hope of catching some fish”. He said that the court should “step back and ask itself why the net was cast so wide”. Mr White added that “the answer surely is that these proceedings were brought as a vanguard, or first wave” of cases ahead of a “banquet of litigation”.
Insurance Cover Shortfall
Nicholas Bacon KC, for the group of claimants, said that Mr Justice Nicklin should not award ANL their costs on the stricter, indemnity basis. The barrister said in written submissions that it could be “very significant” if the group of seven had to pay ANL’s costs on this stricter basis and could lead to them being without enough insurance cover.
He said that on the standard basis, a judge will need a good reason to award more costs than were set out in court-approved budgets, but this does not apply when costs are awarded on an indemnity basis. Mr Bacon said that ANL’s incurred costs as of earlier this month were nearly £34.5 million, which “exceed its approved budget” by more than £18.6 million.
He continued: “The above figures reflect an astonishingly high legal spend by Associated and an entirely cavalier approach to the principle of proportionality and the overriding objective, which seeks to ensure that parties are on an equal footing.” The barrister added that the group of seven household names have obtained insurance cover of a combined £16.2 million. Mr Bacon said: “At that level of cover, the claimants would reasonably expect to be insured for the total of Associated’s incurred costs and approved estimated costs. If the claimants were required to pay Associated’s costs on the indemnity basis, however, the current level of cover would be insufficient to meet their total costs exposure, possibly to the tune of many millions of pounds.”
The barrister later said that the group had “conducted themselves honestly and in good faith”. He continued: “In particular, the court largely accepted the claimants’ evidence, commended their straightforward answers and declined to find that any of them were in any way dishonest.” Mr Bacon said that it was “always inevitable” that the cases would attract publicity and that it was “unrealistic to expect that the claimants themselves would remain wholly silent”. He added: “The court did not find in its judgment that the claimants did not genuinely believe they had been the victims of unlawful information gathering or that the allegations they pursued in their claims, as reflected in the press release of October 2022, were made disingenuously.”
Mr Bacon said that the cases “were neither speculative nor weak” and had merit, with the breadth of the allegations “carefully monitored and crafted” by the judge through case management decisions. He also said: “It must follow from the outcome of the court’s decisions on the evidence, which went against the claimants, that they should pay Associated’s costs of the claims. It would, however, be unjust to make an order that they do so on the indemnity basis.”
The hearing before Mr Justice Nicklin is expected to conclude today or tomorrow, with a decision due in writing at a later date.
