Vardy v Rooney: keeping an eye on the ball and the costs

Costs Lawyer at McAlister Family Law, Clint Nicholls, offers insights into the judge's ruling and its broader implications for legal proceedings.

Back in 2016, the UK Courts introduced cost budgeting with the aim of providing transparency regarding litigation costs. This system was designed to allow parties to understand both their own expenses and those of their opponents, thereby controlling costs. However, in the Vardy v Rooney case, the judge ordered Mrs. Vardy to pay 90% of Rooney's costs, which have soared to more than £1.8 million. This figure includes extravagant expenses such as stays at luxury hotels, drinks, and items from the mini-bar for one of Vardy's lawyers.

The agreed costs budget for this case was £540,779, yet the actual claim for costs has ballooned to over £1.8 million. A cost budget is a serious legal document, submitted to the court with a statement of truth, confirming the level of costs incurred up to the date of submission and estimating costs up to trial. In this case, Counsel for Vardy claimed that Rooney had "deliberately misled" both Vardy and the court regarding the amounts of time and money spent on the case, labeling it "serious misconduct."

Clint Nicholls explains, "The judge's ruling reflects a crucial understanding that parties must be held accountable for their conduct during litigation. When one party's actions lead to excessive costs, the consequences can be severe."

The court has appointed specialist cost judges to assess the costs incurred during the proceedings and to determine how much the successful party can recover. This results in a double blow for the losing party, who is responsible not only for their own legal feesf but also for those of the winning party. As Clint Nicholls notes, "It’s not surprising that Vardy is eager to scrutinise Rooney’s costs. Judges typically hesitate to deviate from agreed budgets, which are intended to maintain transparency in litigation."

Following the hearing of submissions from both parties, the judge concluded that Mrs. Rooney's legal team had not committed any wrongdoing. The court ruled that the filed budget was merely a guideline, and that Mrs. Vardy’s conduct during the proceedings had contributed to the additional costs incurred. However, it was a close call, as the judge was nearly swayed by the arguments presented by Vardy's legal team.

"This case serves as a cautionary tale for anyone involved in litigation," adds Clint Nicholls. "Protracted disputes can lead to disproportionately high costs, particularly for parties with significant financial resources."

The ruling raises important questions about the future of costs budgets in litigation. Can they be effectively ignored? Are parties still required to submit revised budgets if they overspend? What constitutes a reasonable expense? The judgment will now undergo detailed assessment, allowing for a line-by-line review of the costs claimed.

The Vardy v Rooney ruling highlights the need for parties to be mindful of their conduct throughout litigation. As Nicholls emphasises, “The implications of this case will be felt in future litigations, reinforcing the importance of adhering to cost budgets and the repercussions of failing to do so.” As the legal community awaits further developments, this case will undoubtedly set a significant precedent regarding costs in litigation.