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Damages for phone-hacking (and other claims) – How much is enough?

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It has been reported in the press that on Friday 13 May 2011 actress Sienna Miller accepted £100,000.00 in compensation from the News of the World after the News of the World accepted unconditional liability for her phone–hacking claims. Some commentators had previously suggested that the News of the World’s earlier admission and publicised offer of compensation were calculated to bring the dispute to a quick end and avoid even more damaging publicity, possible further disclosure of details of the phone hacking activities and cross examination of senior News of the World executives. 

Sienna Miller has agreed to settle, but can a Defendant always bring litigation to an end just by waving its cheque book? For this purpose, I assume that the Defendant has undertaken not to repeat its infringement, so that is not in dispute.  A Defendant cannot oblige a Claimant to accept an offer of settlement, but if a Claimant is awarded less at trial than an earlier settlement offer, the Claimant may be ordered to pay the Defendant’s costs as well as its own from when the offer was made. However, what if the Claimant wishes to obtain and/or the Defendant wishes to avoid giving something else e.g. disclosure of documents or the opportunity to cross examine witnesses at trial to obtain information? 

Although there are variations, disclosure of documents normally takes place partly before the issue of proceedings and partly during proceedings in accordance with a timetable ordered by the Court.  Witnesses are normally cross examined at trial and not before. This may put the Claimant in a difficult position where the Claimant feels that it does not at the time of receiving an offer have the information it needs in order to settle or alternatively it may be that the Claimant has other objectives which will not be met simply by accepting a sum of money.

The Court has discretion to make the costs order which it considers just.  However, the bottom line is that a Claimant who refuses a financial offer which the Claimant does not subsequently beat at trial is likely to be ordered to pay the Defendant’s costs from when the offer is made.

Tactically, a Claimant has a number of options.  One option is to explain in correspondence which can be referred to the trial Judge on the question of costs why the financial settlement alone cannot be accepted (this may be because, for example, insufficient evidence has been given to satisfy the Claimant of the full extent of the Defendant’s infringing activities).  Another alternative for all parties in dispute to consider, especially where money is not the only or main issue, is mediation.

Mediation is voluntary, but refusal to mediate can give rise to cost sanctions in Court proceedings.  Mediation is confidential and “without prejudice” (nothing said in the mediation is admissible as evidence in legal proceedings).  It is an opportunity to obtain information outside the Court timetable and without an Order from the Court. A wide variety of settlement options can be achieved in mediation over and above monetary settlements and it allows the parties scope to agree resolutions which the Court cannot order, for example, terms of continued trading between parties in a commercial dispute or an apology. 

If you have any questions about offers in litigation or about mediation, please do not hesitate to contact John Mackle who is a senior associate in the commercial dispute resolution department on 0113 336 3336 or at john.mackle@clarionsolicitors.com.

Disclaimer: Anything posted on this blog is for general information only and is not intended to provide legal advice on any general or specific matter. Please refer to our terms and conditions for further information. Please contact the author of the blog if you would like to discuss the issues raised.