There needs to be “a progressive acceptance of the need for greater cost control” in defamation work, Mr Justice Warby has said, while slicing 40% from a defendant’s estimated future costs.
In Stocker v Stocker [2015] EWHC 1634 (QB), the claimant is suing his former wife for defamation in relation to comments made during a Facebook exchange and in an email.
After ruling on various applications, Warby J turned to the costs budgets. The claimant’s budget, including contingencies, was agreed at £260,624, of which £92,134 was incurred costs. The defendant’s budget amounted to £575,441, of which £225,536 was incurred.
Warby J accepted the defendant’s submission that it was not possible to approach the costs budgeting exercise in a case of this kind by assessing a case as relatively modest in scale, and the costs as high, and then simply reducing the costs to match the perceived importance of the case. “As I observed in Yeo, many would suggest that the costs of litigation in this category become disproportionate at an early stage. There is no avoiding that in many cases. So I agree that an approach based purely on financial proportionality would run the risk of disabling litigants from fairly presenting their cases.
“I accept also that the ‘small’ cases such as this, involving relatively few publishees, are not inherently cheaper and can tend to be more expensive than cases over mass media publication. I readily acknowledge the importance of ensuring that the costs budgeting process does not result in a party being unable to recover the costs necessary to assert their rights.”
Nevertheless, he continued, it was vital, “in most cases at least”, for the court to control the recoverable costs of such litigation. “Excessive costs tend to stifle justice, becoming the main issue between the parties. The overall total of the parties’ incurred and estimated costs in this case are unquestionably far beyond anything that could reasonably be thought proportionate to the importance of the issues at stake… In addition, if costs on this scale are allowed in litigation of this kind, many will be deterred from even attempting to vindicate their rights.”
While he acknowledged that the defence of such cases could be very time-consuming and costly, “in my judgment it is not necessary for such cases to consume as much time, or to cost as much, as the defendant’s budget assumes. An indication of this is the scale of the costs budget of the claimant. I recognise that it is not possible to cut radically, at a stroke, the costs of this class of litigation. The process, if it is to be successful, must be gradual. But there does need to be, in my view, a progressive acceptance of the need for greater cost control in this area of litigation.
“The fact, on which the defendant relies, that there is as yet no small claims court for defamation is a spur to controlling the costs and procedural complexity of defamation litigation, rather than a justification for allowing higher costs.
“In my opinion, the defendant’s global costs figure is clearly considerably out of proportion to what is at stake and the nature of the issues, and should be substantially reduced for that reason, as well as in order to ensure a reasonably level playing field as between the parties.”
Warby J then addressed some points of detail, including making no allowance for the defendant’s contingencies, which he considered improbable. “If an unanticipated interim application is made that can be accommodated outside the budget,” he said, referencing Yeo.
The overall result of the exercise was to reduce the defendant’s estimated future costs from £330,000 to some £197,000. The judge concluded: “This exceeds the claimant’s agreed future costs estimate by very nearly £30,000 and thus appropriately reflects the somewhat greater burden on a defendant in a case such as this. It would in my judgment be absurd to suggest that such a sum is insufficient to allow a proper defence of this claim.
“I note also that the sum I have approved for the future is set against a background of far greater incurred costs on the defendant’s side, which means that the total approved budget is still in excess of £420,000.”