Here come ‘anything goes’ costs

Appeal court’s weak decision undermines efforts to constrain legal costs and adds to judges’ burden

Iain Stark 150

The Court of Appeal (CoA) decision last week in Henry v News Group Newspapers Ltd ruled that there was good reason to depart from the previously approved costs budget of Baby P social worker Sylvia Henry in her defamation case against The Sun newspaper. This decision represents nothing more than a fudge. The CoA has missed the chance to remind solicitors of their obligations ahead of the costs regime taking effect from 1 April.

Furthermore, it does nothing but fuel the fears of Lord Neuberger et al about the open-ended nature of litigation. Geoffrey Bindman characterised the litigation process as having no limits, saying: “The more work one did, the more one got paid; and there was no limit to the amount of work one could do…”

It seems this approach is one the CoA is happy to let prevail.

The judgment sends out the wrong message to anyone involved in litigation. The Government has made it clear it wants costs budgeting to constrain the spiralling costs of litigation, yet the decision flies in the face of this intention. Not only does it undermine the Government’s efforts, it also gives licence to further undermine district and costs judges and places yet more burdens on them.

The tri-party responsibility between claimant, defendant and court the judgment appears to support is at odds with how our justice system works. The court is impartial, not on trial. The rules dictate that claimants and defendants should be on an ‘equal footing’, so how can it be possible that one of the parties can get away with withholding information?

Ignoring a budget begs the question – what’s the point of having one in the first place? A budget is there for good reason. It adds transparency to the litigation process and provides valuable information for both sides. Budgets are not a stick to beat a claimant or defendant with, but a tool to aid the smooth running of a case. This ruling gives litigants carte blanche to ignore the rules and satellite litigation is certain to follow.

Furthermore, the fact that the judgment does not even attempt to set out why there may be good reasons for departing from the approved budget means a whole raft of interpretations will be applied in the absence of set criteria, resulting in an ‘anything goes’ approach to costs budgeting. 

I would like to see the defendants take this case to the Supreme Court. However, the impending reforms combined with the time such action would take means this is highly unlikely.

After April it looks like we will be waiting, as in the bad old days of the costs war, for cases to reach the CoA, paralysing the courts underneath and the administration of justice. This will produce greater uncertainty – exactly what these reforms were supposed to stop.

One looks to the CoA to take a lead in such important matters, but instead, it has shown a lack of backbone. This judgment assists nobody.