The Heavy Cost Of Phone Hacking

In our previous blog, we set out briefly that a settlement had been reached by Sienna Miller in respect of her phone-hacking case against a newspaper group and discussed the costs position in respect of privacy cases. Since that settlement, many more of the phone-hacking cases have been settled.

Group litigation costs

In group litigation, the costs are usually split into two parts:

• The common costs (i.e. the costs that are applicable to and to be shared between all of the Claimants); and
• The Claimant specific costs (i.e. those costs that are only relevant to a specific Claimant).

Whilst the costs of the third wave of Claimants are yet to be settled, reportedly Mirror Group Newspapers (MGN) has agreed to pay £1.805m as an interim payment in respect of the common costs for that wave. MGN will no doubt have agreed to make this interim payment as a result of CPR Part 44.2(8), which confirms:

Common law dictates that the usual figure for an interim payment on account of costs is 50% of the total costs where there has been no costs budgeting exercise undertaken throughout the case and a substantially higher percentage in the event that the costs had been budgeted at the case management stage. It is therefore reasonable to assume that the total costs incurred in the third wave (before even including the Claimant’s specific costs) could be as much as £3.61m. The total reported costs of the 78 Claimants that settled their claims in the third wave incurred by the Claimants’ solicitors including VAT and disbursements are in the sum of £5.5m. A further nine Claimants from the third wave also settled their claims shortly before the trial was due to take place, resulting in a further common costs liability of an additional £1.7m.

This phone hacking scandal clearly has a heavy price tag for MGN, not only in damages payments to victims but also in respect of the costs liability too. With a view to trying to limit the damage, MGN has recently applied to have 23 cases struck out on the basis that the limitation period (i.e. the period within which a Claimant must issue proceedings, failing which it affords the Defendant a complete defence to the claim) has expired prior to the issue of proceedings. If successful, this will no doubt be a small consolation to MGN, given what they have had to pay out to date.

Comment

Whilst this is a very extreme example, misuse of private information cases can still result in substantial costs and damages liabilities for both individuals and companies. It is therefore essential if you are concerned about misuse of private information, whether as a potential perpetrator or victim, that you seek independent advice without delay, especially given the point above about limitation periods.