Ewing v News International Ltd & Ors

A prospective defendant served with an application for permission under Senior Courts Act 1981, section 42(3), may become a party to that application and may seek its costs. Applications for permission by a person subject to a civil proceedings order should ordinarily be dealt with on paper. An oral hearing should be exceptional and should not become a mini-trial of the proposed claim. Judges should adopt a cautious, structured approach to the application’s scale and likely costs. The procedure exists to prevent unjustified litigation from consuming court resources and to protect prospective defendants from the resulting expense. Costs must therefore remain proportionate to the complexity and importance of the issues.

The appellant, subject to a civil proceedings order under Senior Courts Act 1981, section 42(1), sought permission under section 42(3) to bring defamation proceedings against the respondents. Coulson J refused permission, holding that the proposed allegations were capable of justification or qualified privilege, that the appellant had not substantively answered them, and that any damages would probably be nominal. The judge ordered costs against the appellant and directed an interim payment of £22,500.

The appeal was limited to the interim costs order. The appellant argued that the respondents had no locus to participate or recover costs, that the interim figure was disproportionate and failed to reflect his means, and that the relevant Practice Direction was ultra vires. The central issues were the respondents’ status following service of the application and the proportionality of the interim costs payment.

1. Appeal allowed. The court set aside paragraph 3 of Coulson J’s order dated 22 July 2008, which required the appellant to make an interim payment of £22,500. There was no order for costs of the appeal.
2. Under [1996] 1 WLR 1580, a prospective defendant was not a party to an application under section 42(3) and had no locus to challenge permission. The later CPR Practice Direction 3A PD.7 changed that position. Where the application notice is served on a prospective defendant pursuant to paragraph 7.6(4), the prospective defendant becomes a party to the application and is entitled to seek costs. A prospective defendant who was not served may challenge the grant of permission under paragraph 7.9 and, if successful, may seek costs.
3. The court declined to determine the appellant’s ultra vires challenge to the Practice Direction. The issue involved the interaction between section 42 of the 1981 Act, other CPR provisions and the power to make Practice Directions under the Civil Procedure Act 1987. The respondents were not represented and the appeal was effectively unopposed.
4. The amount claimed appeared disproportionate to an application for permission, and the judge’s calculation of the interim payment was arguably insufficiently stringent. That justified allowing the appeal on proportionality grounds, without resolving all the appellant’s criticisms of the costs assessment.
5. Future applications should ordinarily be decided on paper. Oral hearings should be exceptional, and written submissions from prospective defendants should be preferred where assistance is needed. The application should be dealt with summarily and should not become a mini-trial, since the purpose of the civil proceedings order is to avoid unnecessary use of court resources and protect prospective defendants from disproportionate expense.

• Court of Appeal (Civil Division) [2010] EWCA Civ 942: allowed the appeal, set aside the interim costs order, and made no order for costs of the appeal.
• Queen’s Bench Division: Coulson J refused permission to commence the proposed defamation proceedings and ordered the appellant to pay the respondents’ costs, subject to detailed assessment, with an interim payment of £22,500.