Times Newspapers Ltd v Burstein

Times Newspapers (D) had been the unsuccessful defendant to a libel action brought by Keith Burstein (C). Shortly before the trial C, who was of admittedly modest financial means, entered into a CFA with his solicitors. At the assessment of C’s costs, D sought to argue by way of preliminary issue in the assessment that the indemnity principle had been breached, that any agreement between C and his solicitors that he would be liable for their fees was a sham, and that the CFA was invalid and unenforceable. The Deputy Costs Judge dismissed D’s application for a full hearing including for cross-examination of C and his solicitors. D appealed. The appeal was remitted to the Court of Appeal.

Whether D was entitled to pursue the issue further, in particular by means of the cross-examination sought.

Dismissing D’s appeal, the Costs Judge had been undoubtedly right to conclude that there was no basis for challenging the evidence put before the Court by C’s solicitors to the effect that there had been no breach of the indemnity principle.

The case is an early example of the many that have made their way up to the Court of Appeal in recent years in which paying parties have sought to challenge an impecunious receiving party’s entitlement to costs. Latham LJ’s closing remarks speak for themselves: ‘Satellite litigation about costs has become a growth industry, and one that is a blot on the civil justice system. Costs Judges should be astute to prevent such proceedings from being protracted by allegations that are without substance.’

Judgment