McAlpine v Bercow (Costs)

More than a year after this libel action was settled, the costs proceedings have come to an end. The dispute within those proceedings centred on two issues:

  1. the extent to which C could recover costs in excess of those in a budget supplied to (but not formally approved by) the court, and
  2. whether disclosure on and trial of a preliminary issue meant that certain staged premiums provided for in C’s ATE policy became due.

As to the first issue, C served a costs budget dated 19 April 2013 which provided for costs to the end of the preliminary hearing of on meaning of £71,154.20 (ex VAT & ATE). This figure included £5,504.00 for witness statements (which were never actually prepared) and £14,615.00 for an earlier application which costs had already been summarily assessed and paid.  Thus, out of the figure of £71,154.20, little more than £51,035.20 (ex VAT & ATE) should have been outstanding by the date of the settlement. However, the Bill served sought £105,350.80 (again ex VAT & ATE).  Objection was taken to this doubling of the costs as against the budget submitted to the court. No explanation was provided, although it was apparent that the fees of Bell Pottinger PR (which had not featured in the budget) were being claimed.

As to the second issue, C’s ATE policy provided (as is common) for premiums to increase as the case proceeded. The policy provided for staged increases “on exchange of Disclosure Lists” and 6 weeks before the “scheduled trial or trial window”.

In the substantive litigation the court ordered that the meaning(s) of the words complained of and whether in any of those meanings they were defamatory be dealt with as preliminary issues, with disclosure being given on those issues alone. It was following the hearing of those preliminary issues that the case settled. C asserted that because there had been disclosure and a trial of the preliminary issues, the entire ATE premium had become due; D’s insurers disputed this. The issue turned on the construction of the insurance policy, with D’s insurers arguing that any ambiguity in the wording of the policy was to be construed against the insurer (which had drafted it) while C argued that any disclosure list or any trial (including of any preliminary issue) met the requirements for entitling the insurer to the relevant increases in premiums.

In early April 2014 D’s insurers made a Part 36 offer of £83,000 (including VAT & ATE) based upon the costs as budgeted and their construction of the ATE premium issue, being less than half of the total Bill as claimed.  More than 4 months later, shortly before the hearing, this offer was accepted, with the costs over the bulk of the intervening period being paid by C.

William McCormick QC and James Newman, instructed by Nigel Tait & Rebecca Toman of Carter-Ruck acted for the Defendant

22nd September 2014