Various Claimants v MGN Ltd

In managed multi-party litigation, a bespoke costs-management regime may be created under the court’s case-management powers. The standard costs-management rules should be adapted with the necessary changes, rather than treated as wholly inapplicable or applied mechanically.

When approving budget phases, the court assesses whether the total figure falls within a range of reasonable and proportionate costs. Proportionality requires an overall review by reference to the sums in issue, non-monetary relief, complexity and wider factors such as reputation, public importance and the realistic prospect of the claims serving as test cases. Where such wider factors are substantial, reasonable costs may also be proportionate.

The judgment concerned costs and costs management in the second wave of the Mirror Newspapers Hacking Litigation. The litigation operated under bespoke orders distinguishing Individual Costs from Common Costs and providing template budgets with a facility for Bespoke Individual Budgets.

John Leslie and Chantelle Houghton sought approval of bespoke budgets after amendments substantially widened the factual inquiry and increased the anticipated trial length. The court considered the appropriate approach to proportionality, the treatment of a late budget revision, a proposed sanction for failure to provide an additional budget, the figures for individual budget phases, and whether specified costs were Individual Costs or Common Costs.

1. Bespoke costs management. The court had power under CPR 3.1(2)(m), reflecting the High Court’s inherent jurisdiction, to create a bespoke costs-management structure. The regime remained an adaptation of the standard regime. The standard rules and Practice Direction applied with the necessary changes. Lloyds/HBOS Litigation - Sharp v Blank [2017] EWHC 3390 (Ch) supported that conclusion.
2. Budgeting task. Under PD3E, paragraph 7.3, the court approved the total figure for each budget phase, making appropriate revisions where phases were not agreed. It was not conducting a detailed assessment in advance or calculating an objectively correct figure. The issue was whether the proposed total fell within the applicable range of reasonable and proportionate costs.
3. Proportionality. The court first undertook an overall review by reference to CPR 44.3(5), including the sums in issue, non-monetary relief, complexity, reputation, public importance and the realistic prospect of the claims operating as test cases. These factors had to be considered together. In this litigation, the wider factors meant that reasonable costs could also be proportionate, despite exceeding the financial value of the claims.
4. Procedural compliance. The failure to provide an additional budget for work connected with a Part 18 request did not justify the sanction under CPR 3.14. The parties’ correspondence indicated that strict compliance had effectively been deferred, the default was minor, and there was no significant prejudice. Mechanical application of the standard sanction would have been disproportionate within the hybrid regime.
5. Budget approval and allocation. The court approved revised figures for the disputed phases, substantially reducing excessive estimates for disclosure, witness statements, trial preparation and counsel’s fees. Costs of the relevant pre-trial review and the costs-management hearing were apportioned equally between Individual Costs and Common Costs. The 2% cap was disapplied because the bespoke applications were necessary. The question of apportioning trial counsel’s fees remained open.

First-instance decision. The judgment itself does not state any subsequent appellate history.