The Duke of Sussex & Ors v MGN Limited

In managed litigation, costs of generic issues may properly be separated from costs of individual claims. The court should assess who succeeded on each distinct part of the litigation and may award common costs according to the benefit obtained from generic findings, even where individual claims failed or settlement offers were not beaten.

The presumption arising from non-acceptance of a successful Part 36 offer remains a formidable obstacle, but it may be unjust to apply it to common costs incurred for the benefit of the wider claimant group. Indemnity costs are appropriate where litigation conduct is outside the norm, including dishonesty, concealment, substantial exaggeration, misleading evidence and unreasonable settlement conduct.

The judgment determined the incidence and basis of costs following the trial of claims by Nikki Sanderson, Michael Turner and Fiona Wightman against MGN Limited. Mr Turner recovered damages but succeeded on only part of his case and failed to beat settlement offers. Ms Sanderson and Ms Wightman’s claims failed on limitation grounds, although findings were made in their favour on generic issues concerning unlawful information-gathering by MGN journalists.

The court also determined the costs of an authenticity dispute, interim payments and interest. The central issue was how the costs of the generic trial should be allocated separately from the individual costs of the sample claims.

1. Generic and individual costs. The costs of the generic issues were, in practical terms, the costs of a separate trial conducted for the benefit of all fourth-wave claimants. They should not simply follow the outcome of the individual claims. Although MGN succeeded overall in the Sanderson and Wightman claims, the claimants achieved substantial success on important generic issues.
2. Part 36 and Calderbank offers. Ms Sanderson and Ms Wightman were liable for MGN’s individual costs because their claims failed. Mr Turner was liable for MGN’s individual costs from 5 March 2022 because he unreasonably failed to accept a reasonable Calderbank offer, and from 25 March 2023 under Part 36. The court rejected explanations based on vindication, disclosure and the alleged refusal of a joint statement.
3. Under CPR 36.17(3), non-acceptance of a genuine offer that is not bettered creates a strong presumption in favour of the offeror’s costs. In the exceptional circumstances of the generic trial, however, it would be unjust to require Sanderson and Turner to pay MGN’s share of the common costs of defending those issues. MGN was ordered to pay the fourth-wave claimants’ common costs of the generic issues.
4. The unexplained late authenticity challenge failed to comply with the overriding objective. The resulting costs were payable by MGN on the indemnity basis.
5. Indemnity costs were also ordered against Sanderson and Turner for their individual claims. Their claims were materially exaggerated, hopeless allegations were pursued, witness statements contained argument or material not properly based on recollection, and settlement conduct was unreasonable. Wightman’s individual costs and relevant common costs were payable on the standard basis.
6. MGN’s generic-issue costs and the authenticity-dispute costs were payable on the indemnity basis. Interim payments were ordered, including £65,000 from Turner. Interest was ordered on individual costs payable to MGN, but not on common costs where the overall payment direction was substantially from MGN to the claimants.

The judgment followed the court’s earlier judgment on the individual claims, given on 15 December 2023. The present judgment determined costs, interim payments and interest.