High Court rejects lawyers' bid to recover Â£1m advertising costs
By Nicola Laver
Solicitors' advertising costs in BA group litigation are the cost of getting the business in and not recoverable
A court has ruled that advertising costs incurred by solicitors acting for claimants in the British Airways (BA) data event group litigation are simply the cost of “getting the business in” and should not be borne by BA if it loses.
At a case management costs conference in Weaver & Ors v BA, Mr Justice Saini heard that PGMBM had spent £443,000 in advertising the proceedings to potential joiners to the group action and planned to spend a further £557,000 on publicising the claims.
Provision had been made in the group litigation order (GLO) for PGMBM to “take reasonable steps” to publicise the GLO, but BA contended that the claimant solicitors had launched a substantial media campaign.
BA challenged the recoverability of the advertising costs incurred and raised an issue in relation to the budget for the future costs. BA sought to rely on the case of Motto v Trafigura, in which Lord Neuberger MR ruled that “the expenses of getting into business”, including “advertising to the public as potential clients” should be treated as part of a solicitor’s “general overheads or expenses”, which should be taken into account when setting their fees.
However, the law firm argued that it was a well-established principle that advertising costs constitute work done “for use and service in litigation” relevant to the claim and or attributable to the conduct of the paying party.
Saini J ruled that the facts of Motto aligned with the present case and ruled that the advertising costs were “essentially general overheads… incurred in the context of a GLO” and amounted to the cost of PGMBM “getting the business in”.
Therefore, the advertising costs were not recoverable and outside of the budget.