It is a rare day when the question of legal costs becomes entangled with celebrity and bursts into the public consciousness. Stays at Nobu! Ransacking mini-bars! Triples all round! The latter at least in respect of legal costs, expanding from the budgeted £540,779 to the incurred £1.8m. For those of us familiar with seeing peoples’ eyes glaze over before we have got to the end of the phrase “costs subject to detailed assessment if not agreed”, the latest instalment in the Wagatha Christie libel trial between famous footballing consorts Colleen Rooney and Rebekah Vardy is heart-warming. We are delighted to be able to gift to the wider world notions of costs budgets, line-by-line assessments, and if there was a good reason to depart (beyond that night’s menu at Nobu).
Everyone knows that, in 2022, Mrs Rooney won her libel action against Mrs Vardy, having engaged in sufficient detective work when trying to find out who had leaked news about her to the press for the case to warrant its nickname. What has become clear since is that, with Mrs Rooney awarded her legal costs, Mrs Vardy has refused to accept that they had been appropriately incurred: the “agreed” part of the above phrase. With Mrs Rooney seeking £1.8m against a budget of £541,000, this is no surprise. Turning to the phrase’s other part, the question of how much Mrs Vardy should compensate Mrs Rooney for her the money she spent on the case – £541,000, £1.8m or somewhere in between – has become subject to detailed assessment. In other words, a costs judge has been tasked with deciding how much of her legal spend Mrs Rooney should recover from Mrs Vardy.
In High Court litigation, costs are subject to stringent management. Mrs Rooney’s budget – setting out how much she thought overall the case would cost her – would have been approved by the Court at an early stage in the proceedings; Mrs Vardy also would have prepared a budget.
Everyone also knows that litigation can be unpredictable, and costs can increase as the matter progresses. As such, a party can, at any time, seek to update their budget, which the Court may or may not approve depending on how reasonable the higher costs sought are deemed to be. At the end of the claim, if the successful party attempts to recover a sum higher than their budget, the assessment will get very detailed indeed. They need to be able to show they had a good reason to depart from the figures previously included. If they cannot, a party who thought they had won the case may find themselves receiving much less of their legal spend than expected.
Not all that a lawyer may need to do to bring a case to success can be recovered from a defeated opponent; a sum of unrecoverable costs does not mean those costs should not have been incurred. Context is everything. Should a lawyer stay at Nobu, or have a little refreshment from a hotel mini-bar? Maybe, maybe not. Should those costs be recoverable from the losing party? Maybe, maybe not. All must be justified (and justifiable) before the costs judge, else the metaphoric red line is drawn through that entry, and the client is left holding the bill.
We shall no doubt hear more about the Wagatha Costies next year when the matter moves from the preliminary issues now dealt with to the assessment of whether or not each item of costs incurred – of which there may be many thousands – should be recovered.
In the meantime, those of us who deal with questions of costs budgeting and detailed assessment are happily surprised to see them given the full big budget, news-busting, glamour treatment. Triples all round! Just please not from the mini-bar.
Rosenblatt has a wealth of dispute resolution experience and is well-placed to support and advise companies and individuals. For enquiries, please contact author: Legal Director, Nick Leigh.
For further details on Rosenblatt’s Dispute Resolution expertise, please see our website: https://www.rosenblatt-law.co.uk/services/.
