KC v MGN Ltd (Costs)

Facts

The court was required to determine costs in an action brought by the claimant (C) against the defendant newspaper (M) for damages following the publication by M of a defamatory article about C in a newspaper.

M published a full apology and made an offer of amends at an early stage. In December 2010 M made an offer of £50,000 together with payment of C's reasonable legal costs which was rejected. Various offers and negotiations followed with C stating that he would settle for £80,000 plus costs. M made a further offer of £50,000. In May 2011 M made a CPR Pt 36 offer of £75,000 plus costs which was rejected. Litigation began in June 2011. As the trial approached in September 2011 M made an offer of £50,000 plus legal costs. In December 2011 M suggested that the parties were agreed that £50,000 was the appropriate sum of damages and offered to pay C's legal costs up to December 2010 when the first offer expired. C rejected the offer. Following an appeal, C was awarded damages of £50,000.

M contended that in the context of the Defamation Act 1996 s.2-s.4 an open offer of £50,000 was made in December 2010 which, at the end of the proceedings, C had failed to beat and so he should pay M's costs of the trial and the appeal from the day the offer was rejected on an indemnity basis.

Held

Long before the litigation began, M had made an appropriate apology and offer of amends in accordance with the Act. M had offered £50,000 with reasonable legal costs which was rejected. By the time the case came to hearing, both sides were agreed that £50,000 would represent a fair level of damages, an assessment which, but for its temporary withdrawal, had represented M's contention all along and which was available for acceptance in December 2010. The decision of the instant court confirmed what both sides had eventually agreed was the appropriate level of damages. By the date C had agreed that £50,0000 was appropriate the costs had escalated considerably. The objective of s.2-4 of the Act was vindication without litigation. If the court concluded that the offer of amends was adequate, it normally followed that any subsequent litigation was inappropriate and unnecessary. If, within the statutory procedure, a claimant chose, following an appropriate apology, to reject a clear and unequivocal offer of damages, and thus incurred additional legal expense and required the defendant to incur further expense, the burden of what proved to have been unnecessary legal expense would normally fall on the claimant who had caused it to be incurred. M was to pay C's costs on a standard basis up to December 2010; there would be no order as to costs to cover the temporary withdrawal of the offer between January and April 2011; C would pay M's costs after that date to include the costs of the trial and the appeal on a standard basis (see paras 12-14 of judgment).

Costs determined.

Comment

Where, under the Defamation Act 1996 s.2-s.4, a defendant had made an appropriate apology and an offer of amends which had been rejected by the claimant and which was the same as the damages subsequently awarded by the court, the burden of what proved to have been unnecessary legal expense fell on the claimant who had caused it to be incurred.