Apology Probed After MP’s Libel Trial
Fulsome apologies are a regular feature in libel claims, and they are often demanded in claimants’ settlement offers. But a recent costs ruling has highlighted the financial consequences of demanding an apology that is too wide-ranging.
Labour MP Martyn Jones sued the Mail on Sunday over two articles published in May 2006.
The articles contained a number of defamatory allegations, including that he refused to show a security guard his House of Commons pass, and swore at him twice.
In July 2006, Jones’s solicitors informed the newspaper he would settle the claim if it paid £4,999 damages, undertook not to repeat the allegations, agreed to pay his legal costs, and published a forthright apology.
The settlement offer was expressed to be a tactical “Part 36 offer” – a reference to Part 36 of the Civil Procedure Rules 1998, by which opponents risk being ordered to pay extra costs if they press on to trial and ultimately fail to beat the settlement offer.
The purpose of Part 36 is to provide a costs incentive for litigants to settle out of court.
The rules specify that a defendant (here, the newspaper) may be ordered to pay certain additional costs, from a certain date, if “judgment is at least as advantageous to the claimant as the proposals contained in a claimant’s Part 36 offer”. The additional costs are specified as (i) the claimant’s legal costs on the “indemnity basis” (i.e. full basis, with nothing written off), and (ii) interest on those costs.
However, the rules say the court need not order such costs to be paid if it “considers it unjust to do so”. And in deciding whether it would be “unjust”, the court may take into consideration “all the circumstances of the case”. So, there is a wide discretion.
An important feature of the case was that the apology demanded by Jones in his Part 36 offer included the following far-reaching terms:
“In the Mail on Sunday on 14 May 2006 and 21 May 2006, we made allegations regarding the conduct of Martyn Jones MP. Having considered the matter, we now wish to state that these allegations were completely without foundation and we consequently withdraw them entirely. We regret that they were ever made.”
The newspaper rejected the settlement offer and attempted to justify the allegations at trial in June 2007, when a jury vindicated Jones by awarding him £5,000 damages – that is, £1 more than the financial amount demanded in his Part 36 offer.
Jones’s lawyers claimed that the jury’s award meant he had beaten the offer and that the newspaper should therefore be ordered to pay his legal costs on the indemnity basis, with interest as well.
However, the newspaper successfully argued that when the case was considered in the round, Jones had not beaten his offer, and the unpalatable costs consequences should therefore not ensue.
Mr Justice Eady said it was necessary to compare the value of a payment of £4,999 (coupled with a suitable apology) in July 2006 with the award of £5,000 following a contested trial in June 2007. He decided that within the award of £5,000, the jury must have awarded Jones more than just £1 for having to endure the unpleasant trial process.
He said: “The claimant will undoubtedly have suffered concern and distress in that 11-month period leading up to and including the public hearing, during which his reputation was attacked in the process of attempting to justify the libel. All of that, it is to be supposed, will have been taken into account by the jury in arriving at its award. At the time the offer was made last year, those elements of injury were yet to be incurred. In purely financial terms, therefore, the jury’s award would appear to be less advantageous than the figure he had proposed at that time.”
In assessing whether this libel claimant had beaten his Part 36 offer, the judge said it was also appropriate to scrutinise the worth of the unqualified apology that was demanded in 2006 and whether the trial outcome was, in reality, more advantageous than the offer. It was noteworthy that the claimant had conceded in the litigation that he did refuse to show his pass to the security officer twice, before eventually producing it “with bad grace”.
In addition, it had been highlighted that Jones declined to wear his security pass around the Parliamentary estate, and he had also conceded that he was rude to the security officer, telling him “I don’t give a s*** what you are”.
Eady J said: “These publicly revealed facts, it may be said, put the claimant, to some extent, in a less favourable light than would a bland and unqualified apology if it had been published in a newspaper last summer.”
Jones had therefore not beaten his tactical Part 36 offer, and the additional costs would not be ordered.
On a separate, but equally important point, the judge said that even if the Part 36 offer had been beaten at trial, whilst he would have ordered costs to be paid on the indemnity basis, he would not have awarded interest on those costs.
His reasons were that Jones had never actually been personally out of pocket. His lawyers had represented him under a Conditional Fee Agreement (CFA), by which he had to pay nothing.
The judge said it was also a relevant consideration in this particular case that any interest that fell to be paid would have been payable not to the litigant, Jones, but directly to his lawyers, who were in any event claiming a 100% success fee under the CFA. The judge felt it would have been inappropriate for them to receive both interest and the success fee.
The ruling provides new guidance on drafting apologies and Part 36 offers in libel cases, and the potential costs consequences.
Cathryn Smith, a partner in Foot Anstey’s media team, acted for Associated Newspapers, publisher of the Mail on Sunday. Bernard Livesey QC and Sarah Palin were counsel for the newspaper.
Published 02/07/2007
