Vardy v Rooney – the saga continues (the costs era)

The basis of the costs challenge

As a result of losing her libel claim against Rooney, Vardy was ordered to pay 90% of Rooney’s legal costs on an indemnity basis (meaning the receiving party recovers all costs incurred except any costs that have been unreasonably incurred or are of an unreasonable amount). An indemnity costs award is not the norm, particularly in libel cases, and is usually only awarded in circumstances where the losing party’s conduct is in question.

Rooney’s total costs bill amounted to £1.8m (not unreasonably high in our experience given how long the case went on for and the sums in dispute in the main libel claim, along with the serious reputational issues which were at stake). Rather than accepting to pay 90% of Rooney’s  £1.8m costs bill, Vardy has challenged the amount claimed for a variety of reasons, including:

• the costs were disproportionate;
• the costs varied significantly from the agreed Costs Budget;
• the number of errors in Rooney’s Bill of Cost; and
• the ‘extraordinary nature’ of some of the costs claimed by Rooney including the costs of her lawyer staying at the Nobu Hotel, plus dinner, drinks and mini bar charges.

The outcome

The outcome of the preliminary hearing was mixed. Senior costs judge, Andrew Gordon-Saker, dismissed a number of Vardy’s claims relating to the  costs incurred by Rooney. He ruled that Rooney’s legal team had not committed any misconduct, and it was therefore “not an appropriate case” to reduce the percentage amount Vardy had to pay in relation to Rooney’s costs.

However, some of Vardy’s arguments have been permitted to continue and the case will be back in the High Court next year for a line-by-line assessment of the costs incurred by Rooney (unless the parties can reach an agreement on the amount payable by Vardy in relation to costs).

Key takeaways

1. Prepare to be scrutinised – both parties’ legal costs were under considerable scrutiny, which is the case in all costs proceedings, but particularly where there is significant media interest.
2. Always carry out a costs-benefit analysis – the legal costs for one party in this case are over £1.8m (plus Vardy would have incurred and had to pay her own legal costs). This underscores the importance of parties considering the cost risks associated with all litigation  against the prospects of success. Even a win may not always justify the cost. One of our Disputes team’s golden rules is, do not litigate out of principle: it just isn’t worth it. Our last article on the compulsory ADR changes also touches on this point: What the compulsory ADR changes mean for litigation from 1 October 2024.
3. Conduct plays a big role when it comes to costs – as is normal for all cases, the court takes the party’s conduct into consideration when determining liability for costs. Parties must act reasonably and transparently throughout the lifecycle of a claim.
4. Securing a judgment isn’t the end of it – Rooney and Vardy may have thought that once they had their days in court and the judgment was handed down, that was the end of it. But it doesn’t end there. This scenario of the losing party refusing to pay the full costs claimed is very common, and this case is an important reminder that disputes over costs prolong litigation and this mean that careful planning for long-term financial commitment is required at the outset of any litigation. This case will now run into 2025.

Our Disputes team has acted in various costs proceedings, both challenging and defending a legal costs bill. We also ensure that clients are provided with a cost benefit analysis before embarking on any litigation. If you have a dispute, please get in touch.