Costs budgeting expected to feature in media case preliminaries

Often parties to defamation cases in England and Wales will seek a pre-trial hearing to determine central issues they disagree on, such as the meaning of allegedly defamatory statements,. However, courts have expressed concern about the substantial costs associated with holding preliminary hearings on the basis that it might serve as a barrier to parties bringing or defending claims for libel.

Imogen Allen-Back of Pinsent Masons, the law firm behind Out-Law.com, said a recent case ruled on by the High Court in London highlighted the attention courts are giving to the topic.

Former director-general of UNESCO, Irina Bokova, has sued Associated Newspapers over material published in the Daily Mail newspaper and Mail Online website on 13 April 2016. She applied to the High Court for a number of issues relevant to her case to be heard as a preliminary issue, including a determination on the actual meaning of the words complained of. Associated Newspapers agreed with the approach and lawyers for both the media group and Bokova prepared for a preliminary issue hearing on this basis.

However, the parties were rebuked by the judge, Mr Justice Dingemans, for failing to formally obtain an order from the court confirming that a preliminary issue hearing was merited. He said that whilst he agreed that a preliminary issue hearing on the meaning of the words was merited, he would not have directed an immediate hearing of two other issues that Bokova and Associated Newspapers had agreed could be dealt with at the same time if he had been given a chance to make an order.

The judge therefore highlighted his concerns about the costs associated with the preliminary hearing, with Bokova lodging cost schedules of over £105,000 and Associated Newspapers over £50,000.

Mr Justice Dingemans said: "I recognise the importance of the issues for the parties, which included on the face of the applications an application for judgment and an injunction. However the sums in the costs schedules are very substantial sums which do not have the appearance of being proportionate to the hearing of a preliminary issue on meaning."

"Excessive and disproportionate costs should not be allowed to become or remain a barrier to either bringing or defending claims for libel. Since the hearing of this action an order providing for costs budgets for a preliminary issue on meaning has been made in other proceedings... It is to be hoped that costs budgets, and costs management if necessary, will ensure that the costs of preliminary issues are proportionate," he said.

Allen-Back said the judgment emphasised the importance of parties seeking, and obtaining, an order for the hearing of a preliminary issue.

Allen-Back said: "In this case, there was no question as to whether it was appropriate for the meaning of the articles to be determined by way of a preliminary issue hearing. The judge’s concern, however, was that there had been no opportunity for the court to exercise its case management powers to decide whether, for example, the parties should be ordered to file and exchange costs budgets for the application, or whether it was appropriate to hear the other applications for strike out and judgment at the same time as the hearing on meaning."

"This is the latest judicial statement to express concern about the costs being incurred by the parties in preparing for hearings on preliminary issues. It is likely that any orders permitting the hearing of preliminary issues will also contain provisions for costs budgeting going forward," she said.