The Likelihood Of Higher Costs Awards

Times Newspapers have been ordered to pay indemnity costs to a successful libel claimant who had earlier offered to settle for a third of the sum he was awarded at trial.

TV producer Sean McPhilemy sued in respect of a Sunday Times article which he said accused him of deceit. A jury awarded him damages of £145,000 and the judge ordered Times Newspapers to pay his costs. An appeal by Times Newspapers against the jury’s verdict failed. But McPhilemy’s cross-appeal on costs succeeded. McPhilemy argued that his costs should be paid on the indemnity basis (a more generous basis than the standard basis ordered by the judge). The Court of Appeal agreed. As well as ordering the Sunday Times to pay McPhilemy’s indemnity costs, it also awarded interest on those costs at a rate 4% above base rate. (Under CPR36.21, it could have awarded interest at up to 10% above base rate.)