UKIP made subject of third-party costs order after delaying settlement for political reasons

The UK Independence Party (UKIP) has been ordered to pay some of the costs of one of its MEP’s defence in a libel action, after Mr Justice Warby found that it delayed a possible settlement for political purposes in the run-up to 2015’s general election.

He ruled that UKIP made the decision despite “knowing this would in all probability make settlement more difficult and more expensive, having reckoned that this risk was outweighed by the prospects of political gain (or avoiding political damage)”.

He added: “This was a process of calculation in which extra votes were expressly weighed in the balance against the certainty of additional costs, and the risk that these might be unaffordable.”

The claimants were three Labour MPs for constituencies in or near Rotherham, who successfully sued Jane Collins (pictured) for slandering and libelling them about their responses to the Rotherham child sexual exploitation scandal in a speech she gave to the UKIP conference in September 2014, when she was the party’s prospective parliamentary candidate for the town.

Eventually, at an assessment hearing on the damages arising from the MEP’s offer of amends, Warby J ordered her to pay each claimant £54,000 and make an interim payment on account costs of £120,000. Nothing has been paid and the claimants said they did not expect to recover much from Ms Collins; instead they sought a third-party costs order against UKIP.

The total bill, including success fee and ATE insurance premium was £670,000. It also covered costs incurred after 22 June 2015, which is the point at which Ms Collins became a litigant in person and it was accepted UKIP’s involvement came to an end. The costs claimed in respect of work done up to that date were £178,000.

Warby J found that UKIP could not be regarded as bearing any responsibility for the origins of the litigation, or for its conduct before December 2014. “The party cannot be criticised, either, for its initial decision of December 2014 to provide limited funding for Ms Collins… [it] was prompted by motives of conscience.”

He explained: “The period and the activities which that funding was intended to cover were both restricted. This was in essence an investigative phase, at least from UKIP’s perspective.

“It was acting in good faith by funding the provision of initial advice and representation to a defendant towards whom it felt some moral responsibility and sympathy. It would be unjust and contrary to the public interest to expose such a third party to the risk of costs’ liability.”

However, after a conference with counsel on 16 January 2015, the judge said it was clear that the case would have to be settled. That meant the only real questions were on what terms, and when.

Some weeks later, he said, UKIP took “a deliberate, informed and calculated decision, for reasons of party political advantage, to ensure that the case was not settled before the general election.

“In my judgment, it very probably did thereby prevent a settlement that it had been advised should be made and which would otherwise have occurred quite swiftly. The likelihood is that, but for its role, the case would have settled. At any rate, it had a causative role…

“The consequence was that the action continued until the acceptance of the offer of amends. The decision to delay meant that, by this time, the costs had escalated to a point that made settlement unaffordable for the party (or so it decided).

“There was so little room left for manoeuvre that the party was unable to achieve a settlement, alone or jointly with Ms Collins. Further costs that could have been avoided were therefore incurred after that, to no useful purpose, until late June 2015 when Ms Collins was left to her own devices.”

Ms Collins’ conduct thereafter as a litigant in person was not “caused or contributed to by UKIP, nor was it foreseen or reasonably foreseeable by the party”.

As a result, Warby J ruled it was “just and reasonable” to make UKIP jointly and severally liable with Ms Collins in respect of the claimants’ reasonable costs incurred between 20 March and 24 June 2015 (the period when UKIP were seen to be funding/controlling the litigation), the claimants’ reasonable costs of and caused by the assessment of damages hearing in January 2017, and their reasonable costs of enforcement proceedings following the decision on quantum. These now fall to be assessed.


Picture credit: Lygo Photography (Creative Commons)

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Costs News
Published date
22 Feb 2018

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