Legal costs battle looms for claimants

The Association of Costs Lawyers (ACL) anticipates that the cost assessment process will be rigorous, particularly given that the unsuccessful claimants—including Sir Elton John and Baroness Lawrence—will be liable for Associated Newspapers’ legal expenses. The costs will be scrutinised in detail by a specialist judge in the Senior Courts Costs Office unless both parties reach a settlement.

In typical litigation circumstances, costs are awarded on a 'standard' basis, where a judge decides whether each part of the bill is reasonable and proportionate. Winning parties usually recover about 70% of their costs, with the court retaining discretion over the final amount. However, Associated Newspapers is likely to pursue its costs on an ‘indemnity’ basis, which could allow them to recover 85-90% of their expenses if it can demonstrate that the claimants acted outside accepted litigation norms.

The case has already been influenced by an initial budget approval by the High Court in January 2025, which deemed the claimants' £39 million spending plan to be grossly excessive. The claimants had budgeted £18.7 million while Associated Newspapers estimated £19.8 million. Ultimately, the court approved only £4.1 million for the claimants and £4.4 million for the defendant, an indication of the likely recovery amount. If the defendant can provide a "good reason," they may argue for costs exceeding budgeted sums before the costs judge.

In another twist, a ruling in late 2025 established that the claimants would be jointly liable for any adverse common costs should they lose, creating potential financial repercussions for all involved. The claimants had also secured legal expenses insurance to mitigate risks of covering Associated’s costs but concerns have emerged over potential claims that they breached the insurance terms.

Amidst this intricate landscape, the Daily Mail will request an “interim payment on account of costs,” which could be significant after considering the complexities and time involved in these proceedings. David Bailey-Vella of the ACL remarked that the resolution of costs will be "just as hard fought as the main claim" and could take an extended time, echoing the timeline seen in the Wagatha Christie libel case.

With various aspects of the claimants’ dealings with their lawyers and insurers remaining under wraps, this case underscores the importance of transparency and the role of Costs Lawyers in ensuring that legal costs are fairly assessed and recovered.