Preliminary issue hearings in media cases should have their own budgets, says judge

Parties seeking preliminary issue trials in media and communications cases need to address costs budgeting as part of that process, the judge in charge of the list has cautioned.

Mr Justice Warby said there was “an emerging practice of mandatory case management and costs budgeting” before trials of meaning or other substantial or preliminary applications. “Dingemans J, Nicklin J and I have all had things to say on these issues,” he noted.

In the case before him, Price v MGN Ltd [2018] EWHC 3395 (QB), where there had not been budgeting, the claimant had succeeded on the preliminary hearing on meaning, and his costs were £120,000. The defendant said the judge should only allow £33,000.

Warby J referred to his comments in Sube v News Group on 14 February 2018, in which he made an order for a trial of preliminary issues and of his own motion issued cost management directions requiring the parties to file budgets so he could make a costs management order. As a result, he cut the claimant’s budget from over £105,000 to £41,810.

Warby J contrasted this with Bokova v Associated Newspapers Limited [2018] EWHC 320 (QB), which he said illustrated “the problems that can arise if there is no case and costs management of applications for preliminary trials”.

He continued: “All of this serves to underline the need, in applications for substantial preliminary trials in media and communications cases, for the parties and the court to address separately and in advance the question of whether there should be a preliminary issue trial, whether on meaning or anything else.

“That issue should not be left for determination until the very date on which the trial is due to take place. That is so even if, as in Bokova and the present case, there is consent or no opposition to the application for a preliminary issue trial.

“If a preliminary issue trial is sought, the parties and the court should address the question of costs budgeting. It is highly undesirable, particularly for defendants, if costs of over £100,000 are incurred by claimants in the preparation for and conduct of a substantial hearing without any form of prior costs control. I say it is particularly so for defendants because experience shows that their costs tend to be significantly lower.”

Turning to the assessment of costs in Price, Warby J said he did not “usually” find it helpful to compare one side’s costs with those of the other, “as there are so many reasons why the two may differ”. But he noted the “striking” disparity here, with the defendant’s costs amounting to £29,000.

“The disparity does not prove that the claimant’s costs figure is disproportionate or unreasonable, but it does put me on the alert and tends to encourage close scrutiny of the figures.”

However, given that he was looking at the figures for the purposes of summary assessment and after the costs had been incurred – making it “a rather different exercise from costs budgeting” – he accepted that he “should not lean too far in the direction of an overly critical examination of the costs”.

Nonetheless, he reduced the claimant’s Liverpool-based sole practitioner’s hourly rate from a claimed £350 to £250, based on his experience and standing. The guideline hourly rate was £217.

“I conclude that some of the work done would not have justified the attention of a solicitor on a rate as high as that. If this were a firm with other junior personnel within it, it should in principle have been delegated. The fact that that could not in fact be achieved is nothing to the point.”

In all, Warby J assessed the claimed costs at £55,000 + VAT. Costs of the assessment would be the claimant’s if the action succeeded.

Robert Sterling (instructed by Carruthers Law) for the claimant; Adam Wolanski (instructed by Simons Muirhead and Burton) for the defendant.

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Costs News
Published date
13 Dec 2018

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