Modi v Clarke [2011] EWHC 1324 (QB) (24 May 2011)

Modi v Clarke [2011] EWHC 1324 (QB) (24 May 2011)

The court held that, in costs management under PD 51D, it is not appropriate for the court to consider settlement negotiations or Part 36 offers when reviewing costs budgets. The review should not attempt to determine whether one side is being unreasonable in pursuing or defending the claim in light of settlement offers; such matters are best left to the assessment of costs after trial. The costs management scheme is intended to be efficient and should not increase costs or complexity by delving into negotiations.

Citation
[2011] EWHC 1324 (QB)
Parties
Claimant: Lalit Modi; Claimant: International Management Group (UK) Ltd; Defendant: Giles Clarke
Jurisdiction
England and Wales
Judgment Date
24 May 2011
Procedural Posture
Libel Actions (defamation) / Costs Management Hearing Prior to Trial
Outcome
Costs budgets reviewed; court declined to consider settlement negotiations or Part 36 offers in the costs management process.
Legal Topics
Libel, Costs Management, Proportionality, Reputational Harm, Freedom of Expression
Defamation Civil Procedure Libel Costs Management Proportionality Reputational Harm Freedom of Expression

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Parties

Lalit Modi

Claimant

International Management Group (UK) Ltd

Claimant

Giles Clarke

Defendant

Procedural Posture

Libel Actions (defamation) / Costs Management Hearing Prior to Trial

Legal Issues

  1. 1 How should the court assess proportionality in costs budgeting for defamation actions?
  2. 2 Should the court consider settlement offers and negotiations when reviewing costs budgets?
  3. 3 What is the relationship between costs budgeting under PD 51D and indemnity costs under CPR 44.4(3)?

Ratio Decidendi

The court held that, in costs management under PD 51D, it is not appropriate for the court to consider settlement negotiations or Part 36 offers when reviewing costs budgets. The review should not attempt to determine whether one side is being unreasonable in pursuing or defending the claim in light of settlement offers; such matters are best left to the assessment of costs after trial. The costs management scheme is intended to be efficient and should not increase costs or complexity by delving into negotiations.

Court Disposition

Costs budgets reviewed; court declined to consider settlement negotiations or Part 36 offers in the costs management process.

Orders

  • Court to record approval or disapproval of each side's budget after hearing argument as required by PD 51D para 5.3.
  • Court did not approve all budgets; specific approvals/disapprovals to be recorded following argument.