Failure to Observe Costs Rules Means Winner Loses Out

The general rule that in litigation the loser pays the winner’s legal costs does not always apply, as a successful claimant found recently.

The claim was made in the wake of defamatory articles, found in a number of newspapers, relating to the ‘Baby P’ case, which made headlines in 2009.

Sylvia Henry, a social worker who worked on the case for Haringey Council, was much maligned in the press. An internal investigation by the Council found that she was entirely innocent of the allegations made and she brought an action for libel against News Group Newspapers.

The case was dealt with using the new system for managing the costs of such cases, which involves each side preparing a budget and liaising with the other to ensure that this is not being exceeded. If it is, an application must be made to the court for a ‘costs management conference’ to be held. Ms Henry’s costs had been estimated at more than £23,000, but the final figure exceeded this sum by nearly £300,000.

Ms Henry won her case. When it came to the settlement of the legal costs, however, the court ruled that because she had departed from the Practice Direction relating to costs in such cases, her costs recovery would be limited.

Although the costs issue will undoubtedly go to appeal, at present Ms Henry is faced with a bill for approximately £300,000.

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