In Duke of Sussex & Ors v MGN Ltd (Re Costs) [2024] EWHC 274 (Ch) Mr Justice Fancourt made some complex costs orders in relation to the litigation.  However the fundamental point was that parties that the claimants that failed to beat a Part 36 offer still had to face profound costs consequences, including costs on an indemnity basis.

I am concerned about the way that the claims of claimants like Ms Sanderson and Mr Turner are being conducted. The pleadings and witness statements often appear to say what is needed to advance the claim, rather than what the claimant or witness can properly recall; the claim is maximised without apparent regard to whether it is realistic; and there is no proper engagement in attempts to resolve the claim without a full trial. There was a serial failure on the part of the individual claimants to comply with the requirements of PD 57AC, which requires evidence to be limited to relevant facts that could properly have been given in examination in chief, and not argument on the merits of the case.


The claimants brought an action against the defendant alleging phone hacking.  The action by the Duke of Sussex was being considered separately.  Here the judge was giving judgment in relation to three claimants.  Two of the claimants failed to beat Part 36 offers. Two claimantsfailed on the issue of causation.


    1. To recap, Mr Turner’s claim succeeded in part: he was awarded damages of £31,650, but he only succeeded on 4 out of 28 articles relied upon. He failed to beat Calderbank and Part 36 offers made by MGN at various times.
    1. Ms Sanderson’s claim failed on limitation grounds. But for that, she would have been awarded £67,500 in damages, but she would have failed to beat Calderbank and Part 36 offers made by MGN before her claim was issued.
  1. Ms Wightman’s claim failed on limitation grounds. But for that, she would have been awarded £22,750 in damages. There were no Calderbank or Part 36 offers in her case.




    1. I consider that the right analysis in Sanderson and Wightman is that, although MGN is to be regarded as the successful party overall, by virtue of the limitation defence, the Claimants were successful on important generic issues. In Turner, Mr Turner was the successful party overall, including on the generic issues, but failed to beat a Calderbank and a Part 36 offer.



    1. Dealing first with the Sanderson and Wightman cases, my conclusion is that those claimants should pay MGN its individual costs of their claims, which have failed. I reject their argument that, despite their claims failing, there should be no order as to the individual costs of their claims. Part of my reason for reaching that conclusion is that I consider that the generic issues, on the conduct of MGN in relation to which the claimants rely for saying that they should not have to pay any part of MGN’s costs, should be dealt with separately. I do not consider that MGN’s failure to make more extensive admissions than they did is a reason for denying them their costs. The claimants were plainly on notice of the risk of the limitation defence succeeding, as it was used by their Counsel to justify an uplift of 100% on their fees in the event of success.



    1. It is true that Ms Sanderson succeeded in proving extensive phone hacking for a period of 2 months and that 9 articles were the product of phone hacking or other UIG, which was more than MGN admitted. These were in themselves very serious findings adverse to MGN. But MGN also made two generous offers to settle before the claim was even issued, for sums significantly more than Ms Sanderson would have recovered. In my judgment, that really removes any realistic argument on her part that she should not have to pay MGN’s individual costs. I reject the argument that Ms Sanderson could not properly engage with such offers because of disclosure failings on the part of MGN. She made her own offer to settle for £242,500 and was apparently unwilling to settle for less.



    1. Ms Wightman did succeed in establishing more occasions of UIG than MGN had admitted in her case, but not to a very significant extent, and she did not succeed in proving that her private information was obtained by hacking of her or her then husband’s phone. On that basis, I do not consider that Ms Wightman had a sufficient degree of success to justify depriving MGN of its individual costs of her claim.



    1. I will therefore award MGN its individual costs of Ms Sanderson’s and Ms Wightman’s claims.



  1. Mr Turner’s case is somewhat different because he was the successful party in his claim overall, though far from successful on all the issues that he raised; and his success is qualified further by his failure to beat relevant offers. MGN accepts that it is liable to pay Mr Turner’s costs up to and including the last date for timely acceptance of the first relevant offer. Mr Turner contends that he should not be required to pay MGN’s costs after that date. Whether he should do so turns on the significance to be given to the offers.


    1. Although Mr Turner did prove seriously wrongful conduct by MGN in 2011, the limited degree of success that he achieved at trial does not justify no order for the individual costs of his claim in the way that that plainly was justified in Mr Yentob’s case. Accordingly, the usual principles apply and Mr Turner must pay MGN’s costs after 4 March 2022.



  1. Mr Turner was given another chance to walk away with compensation in money and all his reasonable costs up 25 March 2023 when MGN made its Part 36 offer in March 2023, shortly before the trial, but he did not accept it. That failure to accept a reasonable offer at a late stage and recoup his costs reinforces the conclusion that I have reached, and indeed requires an order under CPR 36.17(3) that Mr Turner pay MGN’s costs from 25 March 2023 unless I consider that it would be unjust to do so. I do not consider it would be unjust to do so as regards the individual costs of his claim.



This case was unusual because the “generic issues” trial did lead to the judge finding significant misconduct by the defendant in the way it obtained information.  Unusually the defendant was ordered to pay the costs of the unsuccessful defendant on these issues.

    1. As I have said, the costs incurred on the trial of the generic issues were not just costs of managing the litigation or centralised costs of trying the individual claims. The generic issues were for all practical purposes a separate trial alongside (but supporting) the trial of the individual claims. In those circumstances, it would be wrong to conclude that the common costs of the trial of those issues should simply follow the incidence of the individual costs, or (for reasons that I have explained) to make that order on the basis that in overall terms MGN has won on the important issues for the future conduct of the managed litigation. Despite MGN being the successful party overall in 2 of the 4 claims tried, there were very substantial and important issues on which it failed and on which the claimants had a conspicuous success.



    1. Given the scale and significance of the generic issues and the nature of the trial, this is not simply a case where I should make a proportionate costs order, or even an issues-based order with no order for the costs of the generic issues. Unusually, this is a case where justice is only done by awarding the claimants their costs of the generic issues separately, so far as I have power to do so. That is reinforced by the dishonesty and concealment that surrounded the defence of the generic issues, which justifies an issues-based approach to those costs. Given the nature of my findings on the generic issues – and the fact that they are generic issues tried for the benefit of all the claimants, not just the 4 sample claimants whose individual claims were tried – it offends all sense of fairness for the claimants as a whole not to be awarded their costs of the trial of those issues, on which they have collectively succeeded.



    1. I have considered whether I should only make a costs order in favour of successful 4th Wave claimants and a different order in relation to the individuals whose claims have failed overall, so that in their cases their share of the common costs of the generic issues follows the individual costs of their claims. I do not consider that to be a just approach where the generic issues were such a discrete part of the claim, and where success on these generic issues would otherwise have supported an award of damages to the unsuccessful claimants. It would also be unjust because of the exceptional nature of the findings that I have made and the wrongdoing on the part of MGN that is established by them, which entirely justifies the pursuit of the generic allegations to trial. It was only through these claimants’ claims that the generic issues were brought to trial on behalf of all the claimants. Despite the failures on limitation grounds, there is in my judgment no proper basis on which to distinguish these claimants’ share of the common costs of the generic issues from all the other claimants’ shares of them, where there has effectively been a determination of part of their claims in their favour. As a matter of discretion, I would reach the same conclusion even where a claimant had failed to beat a Calderbank offer.



    1. However, where a relevant Part 36 offer was made in respect of the whole of a claimant’s claim and was not beaten, as is the case in Sanderson and Turner, the effect of rule 36.17(3) is that that the court must order that the defendant is entitled to costs from the expiry of the relevant period and interest on the costs unless it considers it unjust to do so. That rule clearly encompasses in principle all the defendant’s costs of the claim. In deciding whether it is unjust to order the claimant to pay all the defendant’s costs from the expiry of the relevant period, the court must take into account all the circumstances of the case, including the terms of any offer, when it was made, the information available to the parties at the time, the conduct of the parties relating to the provision of information to enable the offer to be evaluated, and whether the offer was a genuine offer to settle the proceedings. Once the court has decided that it would be unjust to order the claimant to pay the defendant’s costs, it has a general discretion as to what part of those costs the claimant should pay.



    1. The Part 36 offer made to Ms Sanderson was clearly a genuine attempt to settle the proceedings, and it was made before the claim was issued. Ms Sanderson’s solicitors did reply saying that her own valuation of her claim could not be fully evaluated at a time when full disclosure had not been given by MGN. That would only come once a claim had been issued, even though some disclosure is given voluntarily pre-action. MGN did not in fact provide some of that post-issue disclosure until a relatively late stage of the claim, but I have rejected the argument that that prevented Ms Sanderson from engaging with the offer and seeking to negotiate.



    1. There is obviously a strong presumption that arises from non-acceptance of a Part 36 offer that has not been bettered – to show injustice is “a formidable obstacle to the obtaining of a different costs order” (per Briggs J in Smith v Trafford Housing Trust [2012] EWHC 3320 (Ch), approved by the Court of Appeal in Webb v Liverpool Women’s NHS Foundation Trust [2016] EWCA Civ 365). The genuineness and size of the offer and the early stage at which it was made support the presumption in this case.



    1. However, I am satisfied that, in the exceptional circumstances of the trial of the generic issues in this case, it would be unjust to order Ms Sanderson and Mr Turner to pay the whole of MGN’s costs of their claims, including the costs of preparation and trial of the generic issues. It would be unjust because the claims as issued, despite only claiming damages and injunctive relief, were also concerned with proving the illegal conduct of MGN and the extent of that illegal conduct as a whole, not just the particular circumstances of a claimant’s own loss; and the claimants have uncovered and proved the shockingly dishonest way that MGN acted for many years. It would also be unjust because the common costs of the generic issues were incurred for the benefit of all the claimants, not just for the benefit of the 3 claimants.



    1. All the claimants have been vindicated by the generic findings that they have obtained by pursuing the generic issues, at very substantial expense to themselves and MGN. The costs on both sides have been significantly increased because of MGN’s attempts to conceal the truth, in particular the extent of the unlawful and illegal activity. It would therefore be unjust for these claimants to pay MGN their share of MGN’s common costs of contesting the generic issues. The fact that Ms Sanderson and Mr Turner did not accept an offer that they should have accepted does not mean that they should have to pay a share of MGN’s very high costs of seeking to defend the indefensible.



    1. That does not mean that a MNHL claimant can refuse a Part 36 offer with impunity. It puts them at risk of having to pay all the individual costs of the claim and their share of any other common costs, apart from the common costs of the trial of the generic issues.



    1. For reasons that I have already given, I consider that, exceptionally, MGN should pay the claimants, including Ms Sanderson, Ms Wightman and Mr Turner, their common costs of the generic issues.



    1. Before reaching that conclusion, I did consider whether, depending on the outcome of other individual claims that have not yet been tried, it could later be considered appropriate that other claimants whose claims fail for other reasons ought not to recover their share of the common costs associated with the generic issues. If that might be appropriate, it would be necessary to limit any order at this stage to the 3 individual claimants’ shares of the common costs of the generic issues, with all other shares of those costs awaiting the outcome of all the other claims.



    1. I do not, however, consider that that could be appropriate for the following reasons.



    1. It is conceivable that another claimant might fail on their claim entirely, and not only on the basis of limitation or failure to beat a relevant offer. In such circumstances, no UIG or phone hacking relating to an article or invoice having been proved, there would be a respectable argument that such claimant ought to pay all MGN’s costs of their claim, or at least not receive any common costs.



    1. However, in the light of my judgment, I consider that such a case would be an outlier. I am also aware of the pattern of settlements in the last two years, which supports that conclusion. An outlier should not be allowed to deflect from what is otherwise the appropriate order to make in this kind of managed litigation, where there are so many claimants; nor should the fact that it cannot be predicted with accuracy what might happen with other claims: see in this regard the Nationwide Building Society case.



    1. This case, like that one, is hostile litigation and it is the policy of the court to make costs awards following the determination of issues and not wait to make a final costs order on the basis of overall success in the claim. In the Nationwide Building Society case, Blackburne J considered that it was appropriate to share the burden (as it was in that case) of the relevant generic costs between all those who at the time of the decision could be said sufficiently proximately to have benefited from the determination of those issues in their claims. I see no reason why the same approach should not apply in reverse in this claim, with all those who have benefited from the determination of the generic issues in their favour as preliminary issues being entitled to be awarded their share of the common costs relating to those issues. The remaining costs of those other claims will be dealt with at a later time.



  1. Accordingly, I will order that the identified common costs (that is, those relating to the pleading, evidence for and preparation and trial of the generic issues – items 1-7 (but not items 8 and 9) of the Claimants’ approved budgeted common costs of the 6th Group Trial – shall be paid by MGN to the claimants (which for the avoidance of doubt means the 3 trial claimants and the other 4th wave claimants who are currently on the register whose claims have not settled or been finally determined – it appears that there are 100 of them, excluding the 4 trial claimants), and that all other costs of Ms Sanderson’s and Ms Wightman’s claim, including their share of any other common costs, shall be paid by them to MGN (and, in Mr Turner’s case, the costs to be paid are from 5 March 2022). I will return to the proper basis of assessment of those costs shortly.



This was an unusual case where the conduct of each party led to the judge to make an order for indemnity costs, in part, against some of the claimants and the defendant.


    1. The next substantial issue for decision is whether any of the costs that I have ordered (in addition to the costs of the challenge to authenticity of documents) should be assessed in detail on the indemnity basis rather than the standard basis. That is appropriate when a party has conducted the litigation in a way that is “outside the norm” such as to justify a higher rate of recovery by the receiving party. It has the consequence that there is no proportionality fetter on the assessment, and that the onus lies on the paying party rather than the receiving party to establish that costs were either unreasonable in amount or unreasonably incurred.



    1. I have no doubt that indemnity basis costs are appropriate for the costs of the generic claim payable by MGN to the claimants. As I have explained at some length in my judgment, the defence that MGN ran in the proceedings was supported by dishonesty of those who were running the litigation within MGN and by some of the witnesses called by it, and was an attempt to continue to conceal the extent of the unlawful and illegal activity between 1995 and 2011. It also involved an attempt to row back from the extent of the findings of Mann J in the Gulati case, which increased the costs. Disclosure that should have been given sooner was wrongly resisted until a relatively late stage of the proceedings. It is difficult to imagine a clearer case for costs to be paid on an indemnity basis.



    1. As for the individual costs that I have awarded to MGN against Ms Sanderson, Ms Wightman and Mr Turner, MGN only seeks a standard basis assessment against Ms Wightman, so I need say nothing more about her case.



    1. As for Ms Sanderson, MGN strongly argues for an indemnity basis order, relying on various aspects of the way that her claim was pursued that are said to be out of the norm, namely: (a) a wholly unreasonable approach to attempts to settle her claim; (b) exaggeration of her claim; and (c) misleading of the Court at the summary judgment stage and at trial. I deal with these as follows:



    1. Settlement negotiations. MGN pushed Ms Sanderson before issue to engage in negotiations, and she did make an offer to settle for £267,500. There was then a “without prejudice save as to costs” meeting, at which MGN offered £50,000. On 18 August 2020, MGN requested a breakdown of Ms Sanderson’s valuation, which her solicitors refused to provide. They said that the gap between £50,000 and £267,000 was not capable of resolution before action. MGN proposed mediation, and then responded promptly with an offer of £105,000 plus costs, to which Ms Sanderson responded, saying that MGN’s offer was too low and was rejected, and making a counteroffer of £242,500 and costs and a joint statement in open court. On 8 October 2020, Ms Sanderson refused the offer of mediation and said that she could not properly value her claim before full disclosure.



    1. On 27 October 2020 MGN offered £125,000, which was explained to be in order to settle quickly and protect themselves on costs. Ms Sanderson did not respond. In November 2020, Ms Sanderson again refused to give a breakdown of her valuation. In response, on 20 November 2020, MGN made a Part 36 offer of £160,000, a private letter of apology and a statement in open court in terms to be agreed. There was no response. On 7 December 2020, Ms Sanderson wrote an open letter explaining that a claim was being issued because MGN had consistently undervalued her claim and left her with no alternative. The refusal to break down her valuation, the refusal of mediation and the absence of a response to the offers made was unreasonable. It is not the case that Ms Sanderson was saying only that, until disclosure, she was not in a position to put a figure on her claim. She was trying to force MGN to offer much more.


    1. Exaggeration. Ms Sanderson’s claim was exaggerated. 28 of her 37 articles failed as did most of the claim based on invoices, and some of the articles and invoices were hopeless allegations. Materially, Ms Sanderson had refused in pre-claim correspondence to set out the private information that she relied on in respect of for each article. That might have been a salutary exercise, though when eventually done for trial it did not lead to any reduction of her claim. At trial, she claimed £334,500 in damages. There was also exaggeration in the accusations that Ms Sanderson made, suggesting that MGN had abused her as a child. That was quite wrong.



    1. Mileading evidence. Ms Sanderson has been consistent throughout that she cannot recall having read any of the articles. She did not say in her summary judgment witness statement that she did or say that she was misled by MGN’s attributions to “friends or family”. I acquit her of the allegation of giving misleading evidence in that regard. Her witness statements have simply analysed some of the articles with the benefit of hindsight, having read many of them for the first time in 2020 or thereabouts.



    1. In her trial witness statement, Ms Sanderson said critically of MGN that “at least News Group Newspapers settled my claim and are not continuing to abuse me as MGN is doing through how they have deliberately chosen to conduct this process … by dragging this out”. That was not something that it was fair or honest for Ms Sanderson to have said, given that the true picture shown by MGN’s offers to settle could not be referred to at trial. MGN had made very generous offers before the proceedings were started, but Ms Sanderson’s desire for more money (and only money) prevented her from accepting them.



    1. I am concerned about the way that the claims of claimants like Ms Sanderson and Mr Turner are being conducted. The pleadings and witness statements often appear to say what is needed to advance the claim, rather than what the claimant or witness can properly recall; the claim is maximised without apparent regard to whether it is realistic; and there is no proper engagement in attempts to resolve the claim without a full trial. There was a serial failure on the part of the individual claimants to comply with the requirements of PD 57AC, which requires evidence to be limited to relevant facts that could properly have been given in examination in chief, and not argument on the merits of the case. I understand the additional difficulty of settling claims when MGN was in default of its disclosure obligations, but that issue does not justify a claimant in sitting tight, not cooperating or negotiating at all and hoping that something will eventually turn up to support the more outlandish claims made. By definition, settlement negotiations are not a valuation exercise done with the accuracy that might result from a full trial. Parties are required to be reasonable and realistic, even at a stage where they do not have full information.



    1. I bear in mind that I have been very critical of MGN’s conduct in various respects, both as regards the events of 1995 to 2011 and as regards the conduct of the litigation, both the Gulati claim and these claims. However, I have awarded the claimants their costs of the generic issues on the indemnity basis on the basis that those should be regarded as separate from the costs of the individual claims. The same points about conduct cannot be used by the claimants to justify a more favourable costs order or basis of assessment on the individual claims than would otherwise be made. The question for me is whether the claimants conducted their individual claims in an unreasonable or improper way that is “out of the norm” and so the focus is on their conduct.



    1. In my view, there is considerable force in MGN’s submission that the conduct of Ms Sanderson’s claim was so unreasonable that the court should lay down a marker for the consequences of misleading and exaggerated claims being brought and an unreasonable attitude to settlement then preventing their early and fair resolution. The mere fact that a claimant has succeeded on some issues does not mean that they are exempt from a conclusion that the case was pursued in an unreasonable way that was “out of the norm”. The individual costs of Ms Sanderson’s claim have been significantly increased by the exaggeration of her claim and failure to engage in attempts to resolve it outside court. I consider that the burden should now lie on her to persuade the costs judge that any of MGN’s costs of meeting her individual claim were unreasonable in amount or unreasonably incurred.


    1. I will therefore order that the individual costs of Ms Sanderson’s claim payable to MGN be assessed on the indemnity basis. Ms Sanderson’s share of the residual common costs (excluding the common costs of the generic issues) will be paid to MGN on the standard basis. Those common costs should follow the event, but there is no indication of any conduct in relation to those common costs matters that justifies an indemnity basis of assessment.



    1. In making the indemnity basis order, I am conscious of the striking fact that I am awarding some of the costs of this litigation against each party and in both cases on an indemnity basis. That must be quite unusual, and I have considered carefully whether its exceptional nature is an indication that it is a wrong exercise of discretion. Having done so, I come to the conclusion that it serves rather to demonstrate two things: first, that there were two quite distinct parts to the trial that I heard, with different outcomes and very little costs overlap between them; and second, that each side has conducted this litigation in an extreme and confrontational way, pushing everything to the limits and sometimes exceeding them. It is that conduct on both sides that is reflected in the orders that I will make.



    1. The position in Mr Turner’s claim is similar to that of Ms Sanderson, so far as the costs are payable by Mr Turner. Costs are only payable by Mr Turner because he did not beat the offers to settle that were made to him from 2022. That does not determine the basis of assessment of those costs. It does however mean that I am only concerned with MGN’s costs after 4 March 2022. Did Mr Turner act in the litigation after that date in a way that was “beyond the norm” such as to justify those costs being assessed on an indemnity basis?



    1. I have found that Mr Turner’s claim was significantly exaggerated and unrealistic in relation to many articles. It was first pleaded well before March 2022, but it was amended and re-amended later in 2022 and again shortly before trial. The opportunity was not taken to drop hopeless allegations. The witness statement failings were similar to those that I have already identified: there were several instances where it was clear that Mr Turner’s recollection or words were not the source of what was written in the statement. I referred in my judgment to occasions of “incorrect material being wrongly written into witness statements” and the statement being used as a vehicle for asserting and arguing his case. That is a serious failing. There was a lack of realism shown in the articles that were pursued even in closing submissions at trial.



    1. In relation to settlement, the failings were not as egregious as in Ms Sanderson’s case. Although MGN offered more than Mr Turner recovered, it was not so significantly more that it was manifestly unreasonable to decline the offer, as it was in Ms Sanderson’s case. But for the offers, Mr Turner would have been receiving costs. His refusal of the specific offers relied upon was not wholly unreasonable or “out of the norm”. However, I have already characterised his conduct generally as being unwilling to engage sensibly with attempts to settle his case. On top of that, the considerable exaggeration of his claim and pursuit of hopeless allegations with a misleading witness statement means that, in my judgment, Mr Turner’s conduct can be characterised as “out of the norm” to a significant degree.



    1. I will therefore make the same order in relation to MGN’s individual costs of his claim and his share of the common costs other than the costs of the generic issues, as in Ms Sanderson’s case: individual costs from 5 March 2022 to be assessed on the indemnity basis and share of common costs (other than the costs of the generic issues and the authenticity challenge) from 5 March 2022 on the standard basis.



  1. The individual costs and share of those same common costs payable by MGN to Mr Turner up to 4 March 2022 will be assessed on the standard basis.