This is a judgment by Mr Justice Warby in relation to a third-party costs order against the Second Defendant, UKIP. UKIP agreed to be joined to the action for the purposes of resolving whether it should pay costs incurred by the Claimants in their successful claims for libel against the First Defendant, Jane Collins MEP, who is the MEP for Yorkshire and North Lincolnshire, and a member of UKIP.
The Claimants are three Labour MPs for constituencies in or near Rotherham. They sued Ms Collins for libelling them in a speech she gave to the UKIP Party Conference on 26 September 2014, at which time the 2015 Election was in prospect and Ms Collins was the prospective UKIP Parliamentary Candidate for the constituency of Rotherham.
In a Judgment of April 2015, the Court found that the speech referred to all three Claimants, and bore three defamatory meanings about them, to the effect that they had known many of the details of the scandalous child sexual exploitation that took place in Rotherham, yet deliberately chose not to intervene but to allow the abuse to continue; that they had done this for motives of political correctness, cowardice, or selfishness; and that they were thereby guilty of misconduct so grave that it was or should be criminal.
In May 2015, Ms Collins made and the Claimants accepted an Offer of Amends pursuant to the Defamation Act 1996. After that, Ms Collins parted company with her lawyers, and made applications to “vacate” her Offer of Amends and to stay the proceedings pending an opinion from the European Parliament on whether her role as an MEP meant she was immune from the claims. The Parliament’s opinion was that she was not, and the Court refused to stay the claim further, and dismissed the application to vacate the Offer of Amends.
After a hearing in January 2017, the Court awarded compensation of £54,000 to each of the Claimants, and ordered Ms Collins to pay their costs, with an interim payment on account of £120,000; a total judgment sum of £358,000 with the Claimants’ costs to be assessed. None of those sums were paid by Ms Collins. As a result of disclosure given by Ms Collins in the course of enforcement proceedings the Claimants announced that they would pursue UKIP for costs.
Claimants’ Application February 2018:
The Claimants sought to invoke section 51 of the Senior Courts Act 1981, which makes provision for the payment of costs “of and incidental to” proceedings in the High Court. By section 51(1) such costs are “in the discretion of the court”. By section 51(3), “The court shall have full power to determine by whom and to what extent the costs are to be paid”.
The Claimants served a bill of £669,605.68, which included after-the-event insurance premiums, VAT and success fees. These costs had not yet been submitted for assessment. The Claimants sought an order that any costs which the Court orders UKIP to pay are to be subject to detailed assessment on the standard basis if not agreed.
The case for the Claimants was that UKIP had provided financial support to Ms Collins and sought to influence the conduct of the action for its own ends, so that it was just to order that UKIP bear the costs of the action. The Claimants argued that UKIP had regarded the conduct of the litigation and the delaying of any settlement as “part and parcel of its 2015 General Election campaign”.
UKIP accepted that it had funded Ms Collins for a period of months, in the sum of some £31,000, but maintained that it would be unjust to make any such order as it did not seek control of the litigation. UKIP argued that its primary concern was to help Ms Collins settle the claims; the Claimants would have incurred the same expense in any event; and it would be wrong to make an order when UKIP had only been put on notice of the claim for costs in July 2017. Jonathan Swift QC of 11 King’s Bench argued that the power to make a costs order is exceptional and should be made only where the non-party’s conduct renders the order just and reasonable.
Mr Justice Warby examined the principles for the exercise of the discretion under section 51(3) and agreed with Turvill v Bird  EWCA Civ 703, that this was a jurisdiction which must be exercised in the interests of justice and that its exercise should not be overcomplicated by authority. The kind of consideration upon which the court will focus would include:
(1) Whether the non-party funds the proceedings and substantially also controls or is to benefit from them and is the “real party” to them;
(2) Whether the non-party promotes and funds proceedings by an insolvent company solely or substantially for his own financial benefit;
(3) Whether there is impropriety by the non-party in the pursuit of the litigation.
(4) Whether the non-party causes costs to be incurred… to some extent
Applying this approach, the Court found that UKIP were not responsible for the speech of Ms Collins which led to the libel claims and had funded the provision of initial advice and representation in good faith for a defendant towards whom it felt some moral responsibility. Thereafter, UKIP played a supportive role with the aim of facilitating and funding a settlement.
However, the Court found that by 2 March 2015 UKIP had made a deliberate, informed and calculated decision for reasons of party political advantage to ensure that the case was not settled before the May 2015 General Election. The only credible motives for such a decision were political. The minutes of the National Executive Committee meeting of 10 March 2015 unquestionably represent corporate decision-making. The UKIP decision-makers knew that Ms Collins’ cause was hopeless, and that settlement was the only realistic option, but decided to delay that step. They did so knowing this would in all probability make settlement more difficult and more expensive, having reckoned that this risk was outweighed by the prospects of political gain (or avoiding political damage). This was a process of calculation in which extra votes were expressly weighed in the balance against the certainty of additional costs, and the risk that these might be unaffordable.
The Court found that UKIP’s involvement very probably prevented a settlement which would otherwise have occurred quite swiftly. The likelihood was that, but for UKIP’s role, the claim would have settled by 20 March 2015 at UKIP’s expense with significantly lower sums for damages and costs.
The Court therefore made an order that UKIP should pay the Claimants’ costs from 20 March 2015 to 23 June 2015 and their costs of the assessment hearing.
UKIP were found to be jointly and severally liable with Ms Collins for costs incurred by the Claimants. This limited costs order was made to reflect the impact on the litigation and the costs of UKIP’s deliberate and calculated decisions to ensure for party political and electoral reasons that the Claimants’ action should not be settled before the 2015 General Election.
The lengthy judgment discusses the principles behind the making of a third party costs order, however the Claimants’ costs are still to be subject to assessment which will give UKIP and Ms Collins the opportunity to challenge individual elements of the bill.