Page 70 - Law and the Media

Defamation
of the judge, it is invariable practice that the loser in civil litigation must meet the legal costs
incurred by the winner. This means that if the claimant is unsuccessful in his action, he must
pay the costs of the defendant.

In defamation actions, the question of costs has tended to become the consideration that
overrides all others when deciding whether or not to fight a case to the bitter end in court.
In Jeffrey Archer’s action against the Daily Star in 1987 the damages of £500 000 were
exceeded by the costs of the action, which, according to reports, amounted to around
£750 000.

In an action against Channel Four in 1997, the claimant agreed to pay Channel Four the sum
of £765 000, which represented 80 per cent of its costs, as part of an agreement by which he
was allowed to discontinue his action after several weeks of trial before a judge sitting
alone.

In 2001, Mohammed Al-Fayed obtained a default costs certificate against Neil Hamilton
(under Civil Procedure Rules Part 47.11) in the sum of nearly £1.5 million arising out of
Hamilton’s failed defamation action against Al-Fayed over the ‘Cash for Questions’ affair.

Early settlement
The Civil Procedure Rules have extended the situations in which parties can make offers to
settle. The Civil Procedure Rules Part 36 enables either party to make an offer to settle.

Under the former court rules, only a defendant was able to make an offer to settle, which he
did by payment into court. One claimant who gambled against a defendant’s payment into
court and lost was the actor William Roache. In 1991 he sued the Sun for calling him ‘smug
and boring’. The newspaper paid £50 000 into court several weeks before the start of the trial.
Roache declined to take the money. The jury, who had no knowledge of the payment into
court, found that Roache had been libelled but awarded him the sum of £50 000, exactly the
same amount as the payment into court. Because Roache failed to beat the newspaper’s
payment into court, he was ordered to meet the Sun’s costs from the date it lodged the money
with the court. At the end of the case Roache was severely out of pocket.

Statement in open court
Where the other party in a defamation action wishes to accept the ‘Part 36 offer’, ‘Part 36
payment’ or other offer of settlement, an application can also be made for permission to
make a statement in open court.

Failure to accept offer: costs
If a Part 36 offer to settle is not accepted and the claim results in a determination that is
equivalent to or less favourable than the offer, the party who rejected it is penalized in costs.
The court has wide powers in this regard.

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