The High Court has expressed its “considerable alarm” at the costs which might be incurred in an action being brought by one-time royal butler Paul Burrell against the former publicist Max Clifford.
However, Mr Justice Mann still rejected an application to strike out the claim on the basis that the level of likely damages meant it was not worth devoting any costs or court resources to it.
“The smallness of the damages claim is not a sufficient reason to say that a claim is an abuse of process,” he ruled in Burrell v Clifford  EWHC 2001 (Ch), which was published yesterday even though it was handed down in July.
The case dates back to 2002, when Mr Burrell says he approached Mr Clifford – now in prison for sexual offences – for possible help in managing adverse publicity. He says Mr Clifford asked him to write down details about his relationship with various members of the Royal Family, but Mr Burrell insists that the information was given in confidence so that he could receive advice and assistance from Mr Clifford, and was not to be disclosed to third parties.
However, Mr Clifford “caused the letter to be faxed to Ms Rebekah Wade, then editor of the News of the World”, the act which underlies this action for breach of confidence and/or an infringement of privacy rights.
Mann J recounted: “Mr Clifford admits sending the fax, but it is his pleaded case that he was approached so that he could broker the sale of Mr Burrell’s story to a newspaper. It is admitted that the communications between Mr Burrell and Mr Clifford were confidential but it is also averred that the letter was written so that it could be used as a ‘pitch document’ to enable negotiations about the sale of the story, so that it could be disclosed for that purpose.”
As it happened, the newspaper did not report any story based on the fax, but various journalists may have seen it. It is not alleged that there was wider publication than that.
Having failed to have the case struck out on a Limitation Act argument, Mr Clifford argued that the claim was worth so little that it would be disproportionate for costs to be incurred in relation to it and/or for court resources to be devoted to determining it.
Costs budgets had been filed, and as at that date Mr Burrell had already incurred costs of over £28,000 (plus VAT) and estimated that further base costs of £232,000 would be incurred, plus possible success fees from his solicitors and counsel being on pre-Jackson conditional fee agreements. The defendant’s incurred costs were over £21,000 and estimated costs to trial were over £125,000.
Mann J found that while damages would not be large, they could still be substantial “in the sense of being more than nominal or minimal”.
“That means that this case is not rendered an abuse of process by reason of a nugatory claim for damages in the absence of any other worthwhile claim for relief. The smallness of the damages claim is not a sufficient reason to say that a claim is an abuse of process.”
He continued: “I regard the levels of costs which might have to be incurred in these proceedings with considerable alarm. The undesirability of that level of costs is something to which the court must be alert, but there are other ways of dealing with that.
“First, a proper costs budgeting process should inevitably take into account the likely value of the claim. I do not intend to pre-judge the costs budgeting hearing in any way, but cannot resist saying that spending another £232,000 is prima facie not at all sensible, and I agree with [Mr Clifford’s barrister] that a privately paying litigant without the benefit of a CFA would be highly unlikely to contemplate spending that money in these circumstances.
“Costs budgeting is therefore a way of trying to achieve a reduction in the disproportionality of the costs likely to be incurred and the amount of money at stake.
“Second, if the defendant is worried about his exposure to that amount of costs (perhaps doubled by the uplift) then it is open to the defendant to protect himself by a well-judged part 36 offer. Third, proper case management should be able to keep the costs within sensible bounds.”