Claire Stephenson v Paymaster (1836) Ltd (t/a Equitini)

The statutory exception permitting recovery of an ATE premium for proceedings for misuse of private information depends on the substance of the claim, not its label. It applies only where the claim is genuine and has a real prospect of success. A defendant’s inadvertent transmission of private information to the wrong recipient is not, without more, a misuse of private information. Misuse requires use of the information, ordinarily involving conduct directed towards achieving an objective. A claimant cannot obtain a costs advantage by adding a contrived MPI claim to a data-protection claim where the MPI claim adds nothing to the substance, merits or value of the proceedings.

The claimant brought claims arising from the inadvertent inclusion of her estimated retirement-benefits pack, containing private information, in a pack sent to another police officer. The claim pleaded breach of the UK General Data Protection Regulation and the Data Protection Act 2018, together with misuse of private information.

The substantive claim settled for £2,000. The issue on costs assessment was whether the claimant’s ATE premium fell within article 4(d) of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (Commencement No. 5 and Saving Provision) Order 2013. The court considered whether a spurious MPI claim could qualify and, if not, whether this MPI claim was genuine.

1. The ATE premium was not recoverable in principle. The statutory exception in article 4(d) concerns proceedings which are, in substance, genuine proceedings for misuse of private information. A claimant cannot secure the exception through artificial or self-serving labelling.

2. The court applied a purposive construction. The interpretation advanced for the claimant would produce anomalous and potentially abusive costs consequences, including allowing an entirely spurious MPI claim to qualify. The court rejected that result as inconsistent with legislative purpose and the avoidance of absurdity.

3. A genuine MPI claim requires misuse of private information. Misuse requires the information to have been used. In context, use involves doing something with the information for the purpose of achieving or obtaining a particular result or objective.

4. The accidental sending of the claimant’s benefits pack to the wrong officer did not satisfy that requirement. The act was inadvertent, was not intended to achieve an objective, and did not constitute use or misuse of the information. The MPI claim therefore had no realistic prospect of success.

5. The reasoning in Stadler v Currys Group was materially indistinguishable and was binding. The DPA claim could succeed to some degree, but the MPI claim added nothing to the substance, merits or value of the proceedings. The characterisation of the MPI claim as contrived was reinforced by Warren v DSG Retail Ltd and Smith v TalkTalk Telecom Group Plc.

6. The settlement compromised the substantive claim and preserved the claimant’s entitlement in principle to costs. It did not waive the defendant’s right to challenge the recoverability of individual costs items on assessment.

First-instance decision in the Senior Courts Costs Office. The judgment states that the ATE premium was not recoverable in principle.