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Defendant's costs budget slashed in Facebook libel dispute

Warby J reduces defendant’s proposed legal budget by more than a quarter, claiming the reduced sum will still allow them to undertake a “proper” defence.

Stocker v Stocker [2015] EWHC 1634 (QB) (10 June 2015)

Link to judgment

http://www.bailii.org/ew/cases/EWHC/QB/2015/1634.html

This case involved a libel dispute between the claimant, Terry Stocker, and the defendant, Nicola Stocker, his ex-wife. The libel claim arose out of statements made by Ms Stocker during the course of a Facebook exchange with the claimant’s then partner, Debbie Bligh, on 23 December 2012, and email sent by Ms Stocker to Ms Bligh’s former partner, Eric Roche, on 2 January 2013 (1). The claimant alleged that Ms Stocker’s Facebook post was published to 21 named individuals who had access to her Facebook page, together with a further 110 of her friends, and also additional friends of friends (3). Litigation commenced on December 2013, a few days before the libel limitation period took effect. A defence was served in September 2014, a reply came in November the same year, and a case and costs management conference occurred on 7 May 2015 (5).

The claimant’s budget in the dispute, including all contingencies, was agreed at £260,624.30. Of that sum, £92,134.00 represented incurred costs (52). By contrast, the defendant’s proposed budget was £575,411.39, of which £225,536.00 was incurred and £333,145.00 estimated (53). The claimant contested the defendant’s budget on three grounds. Firstly, it was claimed that it included errors of principle regarding how Precedent H should be completed. For example, figures for expert evidence were included but also, separately, a contingent cost for an application to present such evidence. Secondly, the claimant challenged a number of assumptions used to arrive at the costs estimate. Thirdly, while the claimant did not question the hourly rates charged by the defendant’s legal team, the claimant questioned the number of hours estimated by the defendant’s lawyers to complete various stages of the litigation process (54).

In response, the defendant made a number of observations regarding the cost of defending a libel claim, including the statement that parliament had effectively sanctioned inherently disproportionate ligation against defendants (55). Consequently, it was suggested that the court “should be wary of depriving the defendant of the opportunity to defend the claim by the means properly available to her by too strict and approach to costs budgeting”. It was also asserted that the defendant’s costs budget was set at a conventional level for a 10-day High Court defamation trial involving the factual and legal issues arising on the statement of case (56).

Delivering his ruling, Mr Justice Warby accepted that it was “not possible to approach the costs budgeting exercise in a case of this kind by assessing a case as relatively modest in scale, and the costs as high, and then simply reducing the costs to match the perceived importance of the case”. Consequently, “I readily acknowledge the importance of ensuring that the costs budgeting process does not result in a party being unable to recover the costs necessary to assert their rights” (57). However, he then stated that it was also vital – in most cases – for the courts to control the recoverable costs of such litigation. In this particular dispute, he concluded that the overall total of the parties' incurred and estimated costs is “unquestionably far beyond anything that could reasonably be thought proportionate to the importance of the issues at stake”. More generally, “if costs on this scale are allowed in litigation of this kind, many will be deterred from even attempting to vindicate their rights” (58).

 

In light of this observation, Warby J ruled that the “defendant's global costs figure is clearly considerably out of proportion to what is at stake and the nature of the issues.” Consequently, he ordered that it be “substantially reduced for that reason, as well as in order to ensure a reasonably level playing field as between the parties” (60). He therefore reduced numerous lines of individual expenditure in the approved budget, including the total cost of producing expert reports from the £12,685.00 estimated to £7,000.00, the cost of the trial from £118,700.00 to £68,000.00 and the cost of witness statements from an estimate figure of £67,609.00 to £35,000.00. Overall, the defendant’s total approved budget was set at £422,924.00, representing a total reduction of £152,517.39 of the £575,441.39 initially claimed (65). In reaching his decision, Warby J noted that, even after the defendant’s costs had been reduced by such a large amount, they exceeded those of the claimant by almost £300,000 and “thus appropriately reflects the somewhat greater burden on a defendant in a case such as this.” In his view, it would therefore be “absurd to suggest that such a sum is insufficient to allow a proper defence of this claim” (65).

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