MGN faces costs of £382,000 over £15,000 damages case

Mirror faces heavy bill over Jodie Marsh allegations.

Mirror Group Newspapers faces a costs bill of £382,000 for a libel case in which it agreed to pay £15,000 damages to the former husband of model Jodie Marsh, after carrying allegations she made about him.

The costs figure came to light after High Court Master Colin Campbell sanctioned Matt Peacock's lawyers, Carter Ruck, to claim a 100 per cent success fee for the case.

Carter Ruck conducted the case as a "no-win, no-fee" Conditional Fee Agreement with Peacock.

Legislation aimed at drastically curbing the success fees charged by lawyers who take libel cases on a "no win, no fee" narrowly failed pass into law before the election.

The Ministry of Justice carried out a fast-track consultation on cutting success fees by 90 per cent but the changes, which needed parliamentary approval, were held up when they were voted down at the committee stage in the election wash-up.

The article at the heart of the Peacock case appeared in April 2008 in the Celebs on Sunday magazine supplied with the Sunday Mirror.
After some negotiation proceedings were issued that September and defence was served in late October.

In November 2009 the two sides reached an agreement under which MGN, the newspaper's publisher, would pay Peacock £15,000 in damages, not to repeat the allegations and pay his costs.

In his costs ruling Master Campbell said: "To achieve these results, Mr Peacock's bill claims costs of £382,071.24.

"Of this sum, £140,622.53 relates to the success fee on Carter Ruck's base costs, £500 for the success fee sought on summarily assessed costs, and £15,446.43 for counsel' success fee."

The agreement between Carter Ruck and Peacock set fees at a 25 per cent success fee if the case settled before proceedings were issued.

This figure rose to 50 per cent if the case settled after proceedings were issued before 28 days after the defence was served, then to 100 per cent if the claim proceeded to 28 days after the defence was served.

Carter Ruck also staged success a fee agreement with Counsel Adam Speker.

In his costs ruling, Master Campbell said MGN had contended that the success fee should not have been 100 per cent but 53 per cent, reflecting 70 per cent prospects of success in the case.

"As I informed the parties at the conclusion of argument, I consider that the success fees claimed in both CFAs are reasonable and will, accordingly, be allowed," Master Campbell said.

"A party who contends for a high success fee in a matter that has gone a long distance towards trial, the situation here, stands a better prospect of having that fee approved if a lower success fee would have been payable had the claim settled earlier, precisely what could have but did not happen here," he added.

"A party who enters into a CFA with an unstaged success fee which is payable at that level irrespective of whether the case settles quickly or slowly, will find it more difficult to justify the fee.

"For that reason, the high success fee, having been staged so that it would have been less if the case had settled quickly, is justified."

A defendant who denied liability and served a defence containing multiple paragraphs justifying the offending words, as MGN had, must believe it had a realistic chance of the defence succeeding at trial, Master Campbell concluded. It was therefore reasonable to suppose that MGN believed it had a "serious defence", he said.

Oliver Luft writes for pressgazette.co.uk