Libel costs shock

A social worker subjected to numerous defamatory newspaper articles for her involvement in the Baby P case is facing costs of about £300,000, despite winning her case.

In Henry v News Group Newspapers [2012] EWHC 90218 (Costs), Senior Costs Judge Hurst held that Sylvia Henry could not recover her full costs for her libel claim against The Sun and was therefore liable for the shortfall.

Henry was entirely innocent of all the newspaper’s allegations.

The case was one of the first to be dealt with under the defamation proceedings costs management scheme, under which each party prepares a costs budget in advance. The parties liaise with each other monthly to check the budget is not being exceeded, and if a party is going over budget then they must apply to the court for a costs management conference.

In this case, Henry’s solicitors did not provide the required notification that they were exceeding their budget.

Hurst J assessed the costs to see if there was “good reason” to depart from the budget, applying a value judgment to the facts, as required by the Practice Direction covering the scheme.

The claimant’s solicitors argued the defendants had used tactics that gave rise to extra work in pursuing the claim for Henry, who stood to lose her house if she lost at trial.

The defendants retorted that the claimants had failed to comply with the terms of the Practice Direction, so that neither court nor defendant was aware of the increase in costs.

Delivering judgment, Hurst J said: “While I have no doubt that the claimant could make out a very good case on detailed assessment for the costs being claimed, the fact is the claimant has largely ignored the provisions of the Practice Direction and I therefore reluctantly come to the conclusion that there is no good reason to depart from the budget.”

The case is likely to be appealed—Hurst J having already stated that he would grant permission for such an appeal.