In the recent case of Weaver and others v British Airways Plc [2021] EWCH 217 (QB), the Court was asked to consider whether in fact a Claimant should be able to recover their advertising costs from the Defendant if they were successful at trial.
Weaver and others v British Airways Plc
Background
This claim relates to a cyber-attack on British Airways’ electronic system, affecting customer’s personal data from the website together with the mobile app. As a result of the breach, customer’s credit card data was obtained.
Whilst this case is still very early stages, with this decision coming as a result of a Costs and Case Management Conference (CCMC), the decision reached was particularly interesting and does have the potential to affect the way in which group actions operate in the future.
The CCMC predominantly dealt with two issues being:
- The cut-off date for new Claimants; and
- The cost of advertising.
Within this blog, we are solely going to focus on the issues surrounding the advertising costs.
Advertising costs
In advertising, the proceedings to encourage others to join the group action the Claimant’s firm incurred was an additional sum of £443,000.00 with an intention to incur a further £557,000.00 by way of future advertising costs. The Claimant’s firm listed these costs within their budget and the question before the Court was therefore whether or not the advertising would in fact be recoverable from the Defendant.
What was decided?
The Judge made reference to the Court of Appeal decision in the case of Motto v Trafigura [2012] 1 WLR 657 (CA) in which it was stated:
“[t]he expenses of getting business, whether advertising to the public as potential clients, making a presentation to a potential client, or discussing a possible instruction…should generally be treated as part of a solicitor’s general overheads or expenses…”
Applying the decision reached in Motto Mr Justice Saini confirmed that the costs incurred by the Claimant firm by way of advertising were general overheads. He made the distinction that the costs were incurred in the context of the Group Litigation Order (GLO) but were not incurred pursuant to the GLO.
With this in mind, Mr Justice Saini decided that if the Defendant was unsuccessful at trial they would not have to pay the costs incurred by the Claimant firm by way of advertising costs.
Comment
The case of Weaver and others v British Airways Plc should be a word of warning to practitioners who are racking up considerable advertising costs, as you need to question whether it is proportionate to incur such costs as it is very unlikely that you will be able to recover these from the defendant upon conclusion at trial.
How can Nelsons help?
Ruby Ashby is an Associate in our expert Dispute Resolution team.
If you have any questions in relation to the subjects discussed in this article, please contact Ruby or another member of the team in Derby, Leicester or Nottingham on 0800 024 1976 or via our online enquiry form.