KC v MGN Ltd

Under the statutory offer-of-amends regime, an appropriate apology and a clear, unequivocal offer of damages are intended to secure vindication without litigation. If an adequate offer is rejected and the claimant thereby causes unnecessary further expense, that expense should normally fall on the claimant. Costs may be allocated by reference to the chronology of negotiations, including any temporary withdrawal and reinstatement of the offer. Where the offer ultimately matches the appropriate damages, the claimant may recover costs only up to the point at which acceptance should reasonably have occurred. Subsequent costs may be awarded to the defendant, ordinarily on the standard basis.

The defendant had published a seriously defamatory newspaper article, then made an apology and an offer of amends under the Defamation Act 1996. It offered £50,000 in damages, together with reasonable legal costs, on 15 December 2010. The claimant rejected the offer, sought a higher sum and commenced proceedings.

Bean J assessed damages at £75,000. On 1 November 2012 the defendant successfully appealed that assessment. The starting point was reduced from £150,000 to £100,000, the statutory 50 per cent discount remained, and the award became £50,000. The present judgment concerned the costs of the litigation and appeal, including the effect of the rejected offer and its temporary withdrawal.

The court held that the defendant’s appeal against the assessment of damages had been successful. The present issue was the allocation of costs.

1. The purpose of the offer-of-amends procedure under the Defamation Act 1996 is to secure vindication through an apology and appropriate compensation without litigation. The court adopted the approach reflected in Cleese v Clarke [2004] EMLR 37 and Warren v Random House Group Limited [2009] 2 WLR 314.
2. Where, following an appropriate apology, a claimant rejects a clear and unequivocal offer of damages and thereby incurs further expense or causes further expense to be incurred by the defendant, the burden of unnecessary legal expense should normally fall on the claimant.
3. The £50,000 offer made on 15 December 2010 was ultimately shown to represent the appropriate level of damages. Although the offer was temporarily withdrawn, it was effectively reinstated. The parties later accepted that £50,000 was the proper damages figure, by which time substantial unnecessary costs had been incurred.
4. The defendant was ordered to pay the claimant’s costs on the standard basis up to and including 16 December 2010. There was no order as to costs up to and including 10 April 2011, to reflect the temporary withdrawal. The claimant was ordered to pay the defendant’s costs after that date, including the costs of the trial and appeal, on the standard basis.

1. Court of Appeal (Civil Division): The defendant’s appeal against the damages assessment succeeded. Damages were reduced to £50,000, and the court then apportioned the costs of the litigation and appeal.
2. Queen’s Bench Division: Bean J assessed damages at £75,000 in claim HQ11DQ2225.