Defamation costs control

The recent judgment of Stocker v Stocker [2015] EWHC 1634 (QB), handed down on 10 June 2015, the legal industry has again seen the court taking a firm line with defamation costs budgets.

The case concerned a claim
for defamation relating to comments expressed on Facebook that the claimant
had tried to kill the defendant through strangulation, that he had threatened the defendant, and that he had breached a non-molestation order.
The distribution of the comments was limited to 21 named individuals, and they were also visible to the defendant's 110 Facebook friends. An email containing six defamatory statements was also sent to one individual.

Significant budgets

Both the claimant and the defendant presented significant budgets. The claimant's budget, inclusive of contingencies, had been agreed at £260,624.30, of which £92,134 represented incurred costs. In contrast, the defendant's budget was not agreed and stood at a total of £575,441, of which £225,536 had been incurred and £333,145 represented estimated future costs. When looking at the sums being sought in the budgets, Mr Justice Warby called for there to be 'a progressive acceptance of the need for greater cost control' in defamation cases.

The defendant relied on a number of general points set out in a witness statement of Ms Varley of DPSA, the firm representing the defendant, namely:

1. 'DPSA has been involved in a large number of cases such as this where the defendant is sued over a small scale publication in the context of an existing dispute. Experience suggests there is no correlation between the scale of publication and the cost of a proper defence. Rather, such cases are often more expensive than those involving large-scale media publications.

2. Such cases involve greater reputational risk and stress for defendants, and the financial consequences of losing are more keenly felt.

3. There are difficulties in resolving such claims by means of striking out applications, which may simply result in greater cost.

4. Until the Defamation Act 2013 came into force parliament permitted claims to be brought even where there is no harm, thereby sanctioning inherently disproportionate litigation against defendants.

5. The law and procedure remain technical and complex, requiring specialist representation. There has never been any attempt to create a defamation small claims court.'

While Warby J was quick to recognise that 'the "small" cases such as this, involving relatively few publishes, are not inherently cheaper and can tend to be more expensive than cases over mass media publication', he stressed 'the importance of ensuring that the costs budgeting process does not result in a party being unable to recover the costs necessary to assert their rights', highlighting, however, that it was 'vital in most cases at least, for the court to control the recoverable costs of such litigation' as 'excessive costs tend to stifle justice'.

Covering the defendant's estimated costs in detail, Warby
J was of the view that it was 'not necessary for such cases to consume as much time, or to cost as much, as the defendant's budget assumes'. While recognising that it was 'not possible to cut radically, at a stroke, the costs of this class of litigation', he did go on to make significant reductions to costs relating to disclosure, witnesses, and witness statements, as well as trial preparation.

Exclusion of contingencies

Of significance to practitioners was the exclusion of the defendant's contingencies, which Warby J considered were unlikely to be necessary. In line with his decision in Yeo v Times Newspapers Ltd [2014] EWHC 2853 (QB), the judge provided the caveat that, were the contingencies to become necessary, an application could be made, falling outside the budget.

The outcome of these reductions was to decrease the defendant's estimated future costs to £197,000. This exceeded the claimant's agreed future costs to 'reflect the somewhat greater burden on a defendant in a case such as this'.

The impact of the judgment is a clear message from the courts that while defamation cases may well be complex, the courts will use their powers to ensure that costs do not become disproportionate and fetter access to justice. SJ

James Barrett is vice chairman of the Association of Costs Lawyers