Hain intervention has costs knock-on as Green discontinues claim

Green: Claim became pointless

The intervention of Lord Hain in the dispute between Sir Philip Green and the Daily Telegraph has had a mixed impact on the costs of the case, which was discontinued last week.

While it led to Mr Justice Warby not ordering the businessman to pay the newspaper’s costs of obtaining an interim injunction, the judge said he must pay indemnity costs for continuing the claim after it became “pointless”.

The Telegraph has said Sir Philip would have to pay “up to £3m in court costs” as a result.

Sir Philip, along with his businesses Arcadia Group and Topshop/Topman Ltd, were seeking an injunction to prevent publication by the newspaper in breach of confidence of information that had been the subject of non-disclosure agreements to settle complaints or claims by employees.

After the Telegraph had initially reported how it had been stopped from identifying Sir Philip by an interim injunction, Labour peer Lord Hain named Sir Philip using parliamentary privilege.

The claim nonetheless continued until the claimants decided in late January to discontinue it. Last week, Warby J granted unconditional permission to discontinue, rejecting the claimants’ request to include conditions regarding future publication on certain issues.

In relation to costs, the judge accepted that the claimants should have their costs for two preliminary applications where they were successful and he had simply not had time at the hearing to make the order.

The claimants also sought an order that the defendant pay the costs of the interim injunction application made to the High Court and the appeal to the Court of Appeal.

Though normally the order in such a case would be for the costs of the party obtaining an injunction to be paid in any event by the party against whom the injunction was granted, here the Court of Appeal simply reserved the costs.

Under the CPR, this meant that, if there was no later order, they would be costs in the case and so here the claimants would have to pay the defendant’s costs, following the usual rule on discontinuance.

But Warby J said that “the exceptional factor of third-party intervention [by Lord Hain] and its impact justifies a departure from that general rule in this case”.

As a result, he ordered that each side would pay its own costs of the interim injunction proceedings.

His provisional view was that the claimants should also recover the costs of the hearing about the discontinuance.

But in relation to all the other costs of the case, the judge he ordered that they be assessed on the standard basis up to and including 26 November 2018 – a month after Lord Hain named Sir Philip – and on the indemnity basis thereafter.

Warby J said that, after Lord Hain’s intervention, “this litigation became substantially pointless” – indeed, the claimants said it was now more counter-productive than useful.

“I would accept that, in the unusual if not wholly exceptional circumstances that prevailed after Lord Hain said what he did, the claimants were entitled to take time to reflect on their options.

“Bearing in mind the complexity of the issues they confronted, and how much else had to be done in a case that was proceeding swiftly towards trial, I have allowed a full month for that.

“But whatever may have been the thinking behind the scenes I am unable to identify any sufficient justification for proceeding thereafter.

“To do so, and then drop the case for that very reason (albeit coupled with another) was in my judgment conduct well outside the norm, which justifies the unusual measure of indemnity costs.”

According to the Telegraph, Sir Philip’s solicitors, Schillings, have sent “many letters” on the dispute since last April.

“Anybody who thought Sir Philip’s unmasking in the Lords would signal the end of the legal case was wrong,” one article said.

“Rather than shying away, Sir Philip, aided by Schillings, if anything upped its game. Legal letters continued to fly.”

At an earlier hearing, Warby J capped the top partner rate that Schillings could claim at £550 an hour, after a figure of up to £690 was sought.

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