Prince Harry faces £50m legal costs bill after Daily Mail defeat, former Costs Judge says
Prince Harry and his co-accused could face one of the biggest costs ever seen in a British privacy case, a former Costs Judge has warned, after the High Court dismissed their claims against Associated Newspapers, publishers of the Daily Mail and Mail on Sunday, in full.
Mr Justice Nicklin dismissed all 97 allegations of illegal data collection brought by the Duke of Sussex, Sir Elton John, David Furnish, Baroness Lawrence, Elizabeth Hurley, Sadie Frost and Sir Simon Hughes, ruling that the allegations alone were insufficient and that the plaintiffs had failed to prove that the publisher obtained the information illegally. The full verdict followed a 46-day trial earlier this year.
But according to Colin Campbell, a former Costs Judge at the Royal Courts of Justice and now a consultant at law firm Kain Knight, the accounting has only just begun.
“The case is not over,” Campbell said. “Associated Newspapers has already made it clear that it intends to recover the legal costs it has incurred in defending these allegations. Given that the case has dragged on for several years and that Associated Newspapers says more than £50 million has been spent on legal fees, the financial consequences may now be almost the same as the verdict itself.”
Campbell believes the publisher is likely to seek damages in the form of indemnification, which is a type of order reserved for cases where a court deems a party’s behavior to be out of line.
“It would not be surprising if Associated Newspapers wanted to recover its costs in the form of compensation, which is the most favorable type of cost order reserved for cases where the court considers that the group’s conduct is contrary to normal procedure,” he said. “If granted, it will make it easier for ANL to recover a much larger portion of its legal costs because it will not have to satisfy the court that those costs were reasonable and necessary, only that they were reasonably incurred. In a trial of this scale, the difference could be a significant amount of money.”
Defense cost orders are far from theoretical. Richard Desmond’s Northern & Shell was hit with a £40m costs bill on the basis of compensation following the failure of its National Lottery claim, a reminder of how quickly cost exposure can end a dispute.
The biggest unknown, Campbell says, is insurance. “One key unanswered question is whether the claimants have post-event insurance, which is often used in high-value courts to cover some or all of the legal costs a claimant may be ordered to pay if they lose. That is not publicly known at this time, but could be a major issue as the trial enters the costs phase.”
Post-event cover and third-party funding have become standard features of high value claims, with a growing market built around litigation funding as a way to manage cost risk. Without such protection, the seven claimants could be personally exposed to part of the bill amounting to tens of millions of pounds.
A two-day hearing to address key issues, including costs, is expected to begin on July 29. For businesses watching on the sidelines, the case is a stark illustration of a reality that goes beyond celebrity lawsuits: as recent class action lawsuits at the Supreme Court have shown, losing a lawsuit is often the start of financial pain.
