The Court of Appeal decision last week in Henry v News Group Newspapers Limited ruled that there was ‘good reason’ to depart from the previously approved costs budget of Baby P social worker Sylvia Henry in her defamation case against The Sun newspaper. This decision represents nothing more than a fudge. The Court of Appeal has missed the opportunity to remind solicitors of their obligations ahead of the new costs regime taking effect from April 1.
Furthermore, it does nothing but fuel the fears of Lord Neuberger et al about the open ended nature of litigation. Geoffrey Bindman characterised the litigation process as having no limits, saying: “The more work one did, the more one got paid; and there was no limit to the amount of work one could do…” It seems that this approach is one that the Court of Appeal is happy to let prevail.
This judgment sends out completely the wrong message to anyone involved in litigation. The Government has made it clear that it wants costs budgeting to help constrain the spiralling costs of litigation, yet the decision flies in the face of this intention. Not only does it undermine the Government’s efforts, but it also gives licence to further undermine district and costs judges and places yet more burdens on them.
The tri-party responsibility between claimant, defendant and court that the judgment appears to support is completely at odds with how our justice system works. The court is impartial and not on trial!
The rules dictate that both claimants and defendants should be on an ‘equal footing’, yet how can it ever be possible that one of the parties can get away with withholding information?
Ignoring a budget just begs the question of what is the point of having one in the first place. A budget is there for good reason. It adds transparency to the litigation process and provides valuable information for both sides. Budgets are not a stick to beat a claimant or defendant with but are another important tool to aid the smooth running of a case. Yet this ruling gives litigants carte blanche to ignore the new rules – and satellite litigation is certain to follow.
Furthermore, the fact that the judgment does not even attempt to set out the reasons why there may be good reasons for departing from the approved budget, means that a whole raft of different interpretations will be applied in the absence of no set criteria. Thereby resulting in an ‘anything goes’ approach to costs budgeting.
I personally would like to see the defendants take this case to the Supreme Court. However, the impending costs budgeting reforms coming into effect in April combined with the ensuing time such action would take means this is highly unlikely to happen.
Post April it looks like we will be waiting, as in the bad old days of the Costs War, for cases to reach the Court of Appeal, thus paralysing the courts underneath and the everyday administration of justice. This will produce greater uncertainty, exactly what these reforms were supposed to stop.
One looks to the Court of Appeal to take a lead in such important matters, instead they have shown an incredible lack of backbone at a time when strong direction is needed. This judgment assists no-one.
Iain Stark is Chairman of the Association of Costs Lawyers