Alan Yentob v MGN Ltd
| Jurisdiction | England & Wales |
| Judge | Lady Justice Arden,Lady Justice Rafferty,Lord Justice Kitchin |
| Judgment Date | 17 December 2015 |
| Neutral Citation | [2015] EWCA Civ 1292 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A3/15/2140 |
| Date | 17 December 2015 |
[2015] EWCA Civ 1292
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Mr Justice Mann
EWHC 1816 (Ch)
Royal Courts of Justice
Strand, London, WC2A 2LL
Lady Justice Arden
Lady Justice Rafferty
and
Lord Justice Kitchin
Case No: A3/15/2140
Lord Pannick QC and Matthew Nicklin QC (instructed by RPC) for the Appellant
Simon Browne QC and Jeremy Reed (instructed by Atkins Thomson as Lead Solicitors for Steel & Shamash) appeared on behalf of the Respondent
Hearing date: 21 October 2015
Issue: was the judge wrong to hold that Mr Yentob should not suffer the normal consequences of not accepting a Part 36 offer?
This is a renewed application by MGN for permission to appeal against part of Mann J's costs order against MGN dated 11 June 2015. It concerns MGN's offer ("the Offer") under CPR 36 to compromise Mr Yentob's claim. The proceedings have been fully described in my judgment ("my main judgment") on the appeal by MGN against the judge's awards in favour of nine individuals, including Mr Yentob, in these proceedings for misuse of their private information by "hacking" and other wrongful activities, as explained in that judgment. I should state at the outset that the existence of this or any other offer plays no part in the reasoning in my main judgment.
MGN made an offer which complied with CPR 36 ("the Offer"). At trial, the judge awarded Mr Yentob £85,000 as damages for misuse of his private information and it is not now in issue that even so he failed to beat the terms of the Offer (which this Court has not seen). The normal consequences ("the Normal Consequences") of this event under CPR 36 would have been that Mr Yentob would be ordered to pay MGN's costs with interest from the last date for acceptance of the Offer, which was 13 January 2015 ("the usual Order"). However, the judge could use the exceptional power in CPR 36 to make another form of order if he was satisfied that it was "unjust" that Mr Yentob should pay any of MGN's costs. He used that power to make no order as to costs. MGN contends that the judge was wrong so to order because (1) he made no finding that the usual Order would be "unjust" and instead applied a flawed test of a balance of justice, and (2) took into account MGN's failure to make admissions and other matters which he should have excluded from his consideration of whether the Normal Consequences were unjust.
In my judgment, for the reasons given below, I would grant permission to appeal but dismiss the appeal. The judge applied the right test and the factors which he took into account were circumstances to which he was bound to have regard.
The argument turns on CPR 36.17, the relevant parts of which provide:
(1) Subject to rule 36.21, this rule applies where upon judgment being entered—
(a) a claimant fails to obtain a judgment more advantageous than a defendant's Part 36 offer; or
…
(3) Subject to paragraphs (7) and (8) [which do not apply], where paragraph (1)(a) applies, the court must, unless it considers it unjust to do so, order that the defendant is entitled to—
(a) costs (including any recoverable pre-action costs) from the date on which the relevant period expired; and
(b) interest on those costs.
…
(5) In considering whether it would be unjust to make the orders referred to in paragraphs (3) and (4), the court must take into account all the circumstances of the case including—
(a) the terms of any Part 36 offer;
(b) the stage in the proceedings when any Part 36 offer was made, including in particular how long before the trial started the offer was made;
(c) the information available to the parties at the time when the Part 36 offer was made;
(d) the conduct of the parties with regard to the giving of or refusal to give information for the purposes of enabling the offer to be made or evaluated; and
(e) whether the offer was a genuine attempt to settle the proceedings.
The judge's chain of reasoning is complex. He had first to decide a threshold issue ("the threshold issue") of whether Mr Yentob had obtained a judgment that was more advantageous than MGN's Part 36 offer. The judge held that, despite the fact that he had obtained a judgment which found that MGN's wrongdoing was far more extensive than it had been prepared to admit, he had not beaten the award by obtaining an award of £85,000.
So Mr Jeremy Reed, for Mr Yentob, urged on the judge that it was not just that the Normal Consequences should apply.
On this second question, the judge held that the relevant circumstances for the purposes of CPR36.17(5) could include a comparison between the terms of the Offer and the terms of the judgment, and, importantly, that there might be cases where a party was justified in continuing to trial even though he had received a favourable offer (Judgment, para 38). MGN had admitted hacking Mr Yentob's voice mailbox for only half the period of hacking for which he (the judge) had found hacking had taken place. Mr Yentob was entitled to argue that he could properly proceed to trial in those circumstances (Judgment, para 39).
Mr Matthew Nicklin, for MGN, then argued that if Mr Yentob wanted vindication in this way, he should have sought a statement in open court, for which the CPR provided. However, MGN did not offer such a statement. Mr Reed submitted that it was unlikely to have agreed to make such a statement (Judgment, para 40).
The judge said that he found the point a difficult one (Judgment, para 41). His conclusion was that in the unusual circumstances of this case, where MGN had made limited admissions and had until shortly before the trial denied any liability, Mr Yentob had "some form of justification for pursuing the matter to trial" (Judgment, para 42). The judge explained in his main judgment at trial that the formal admissions were made as late as November and December 2013. I need not set out the detail of those admissions. The admissions were extensive but limited because, as the judge explained:
25. … these admissions … do not amount to any admission as to the scope of unlawful activities beyond the use of the word "substantial".
The judge accepted that it was not enough that Mr Yentob wanted to find out what had happened to him as many claimants would want to do that (Judgment, para. 43). The case was exceptional because, until the trial took place, Mr Yentob would not know how badly he had in fact been hacked, it was unlikely that MGN would have agreed to make a statement which matched the findings made at trial and because it was not apparent until trial that he could never get disclosure of the full extent of the hacking (Judgment, para 44). He could not recover his costs from MGN but justice did not, in those circumstances, require him to pay MGN's costs: the outcome could be marked simply by making no order as to costs (Judgment, para. 45).
In the judge's own words:
43 In what I might call a more normal case, it seems to me that the desire to have a trial in order to have a finding of a judge in public as to what happened is unlikely to be a legitimate objective in Part 36 terms so as to justify a claimant refusing to accept a Part 36 offer and insisting on going to trial. As Mr. Nicklin correctly pointed out, there may well be a lot of victims of personal injury incidents who would wish, for reasons which are entirely understandable in human terms, to have a trial so that it can be made plain what happened to them and how monstrous the behaviour was. As Mr. Nicklin points out, that is not a justification for not accepting a Part 36 offer which is greater than an amount which the claimant is ultimately awarded.
44 However, I do not think this case falls quite into that category. Looking at the way the case was conducted as regards Mr. Yentob and in particular the refusal to acknowledge the extent of hacking, even in final submission, I think it is more probable than not that had Mr. Yentob asked for an agreed statement in court which made the position clear, that it would not have been forthcoming in terms which would have matched the sort of findings which Mr. Yentob has now...
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