The so-called “Wagatha Christie” dispute has fascinated the public since it first hit the headlines in 2019. Rebekah Vardy (“Vardy”) sued Coleen Rooney (“Rooney”) for libel in June 2020 after Rooney had alleged that Vardy was responsible for leaking stories about her to the press- allegations that Vardy strongly denied.

As a result of Vardy losing the trial in 2022, when the judge had ruled that it was “substantially true” that she had leaked private information about Rooney to the press, Vardy was ordered to pay 90% of Rooney’s costs. The case has been back in the High Court recently, with Vardy’s legal representatives challenging the “sheer magnitude” of the legal costs that she has been ordered to pay.

These costs included Rooney’s stay at the Nobu Hotel, substantial dinner and drinks charges and items from the mini bar for one of her lawyers, totalling more than £1.8 million.

Costs in litigation- who pays and how much?

The court has discretion as to what cost orders to make in litigation (save for in some certain defined circumstances).

As a general rule, whoever is successful in litigation will be awarded their costs. This general rule is often referred to as “loser pays” because it means that the unsuccessful party will be ordered to pay the costs of the successful party.

The amount of costs to be paid is also subject to the court’s discretion and can be determined in a separate assessment process. However, when the court is making a costs order, the court will consider the basis of assessment, either the standard or indemnity basis.

For completeness, if a party is unsuccessful and a costs order is made against them, they will also have to bear their own legal costs.

Standard basis

For cases that commenced on or after 1 April 2013, where costs are to be assessed on the standard basis, the court will only allow costs that are reasonably incurred, reasonable in amount and proportionate to the matters in issue (CPR 44.3(1) and (2)). Any doubt will be resolved in favour of the paying party.

Costs that are deemed to be disproportionate in amount may be disallowed or reduced, even if they were reasonably or necessarily incurred (CPR 44.3(2)(a) and PD 44.6.2).

The onus will be on the receiving party to prove the reasonableness and proportionality of the amount claimed.

Indemnity basis

Where costs are to be assessed on an indemnity basis, the court will consider whether costs claimed were reasonably incurred or were reasonable in amount in favour of the receiving party.

When costs are assessed on this basis, there is no requirement for the costs sought to be proportionate. The effect of this is that the onus is put on the paying party to show that the costs claimed are unreasonable.

Applying this to the “Wagatha Christie” dispute

As mentioned above Vardy was ordered to pay 90% of Rooney’s costs. This outcome followed the “loser pays” rule and included a 10% reduction to reflect certain issues that had been highlighted during the trial, details of which are not relevant to present purposes.

The judge ordered Vardy to make an initial payment of £800,000 to Rooney.

In addition to paying Rooney’s costs, Vardy also has to pay her own legal costs, which is estimated to total over £3 million.

Rooney’s costs in this case are being assessed on an indemnity basis, with the onus on Vardy to show that the costs being claimed are unreasonable. At the most recent hearing in this saga on 9 October 2024, Vardy’s lawyers argued that the costs Rooney is claiming are unreasonable. Vardy’s lawyers highlighted the fact that the costs had originally been agreed at £540,779 and had since more than tripled. They suggested that Mrs Rooney and her lawyers had committed misconduct by “deliberately” misleading the court and understating her costs during the 2022 trial.

Senior Costs Judge Andrew Gordon-Saker concluded that Rooney and her team had not committed any misconduct and therefore it was “not an appropriate case” in which to reduce the amount of costs that Vardy must pay.

Thus far, the court has only considered the payment of costs, in principle, but not addressed the issue of the amount of costs to be paid. The end result will likely be that Vardy will pay Rooney less than £1.8 million. At the end of the most recent hearing, the judge ordered Vardy to pay a further £100,000 to Rooney on account of costs, so that she ‘is not kept out of her costs’.

Clearly, the parties cannot agree on the amount of costs to be paid so this will be decided by a separate process called detailed assessment. The 9 October 2024 Hearing dealt with some preliminary issues in anticipation of a detailed assessment that could take place in early 2025. This process will involve the party who has the benefit of an order for costs to be paid to them (Rooney) setting out the costs they are claiming in a bill of costs. The costs judge will then carry out a line-by-line assessment, considering the reasonableness of the costs that are being claimed, according to specific criteria. The other party will then be ordered to pay the assessed costs.

This case undoubtedly serves as a reminder that litigation can be very expensive and of the importance of considering costs at the outset of litigation. It will be interesting to see how this case continues to develop.

If you have been involved in a legal case and have been ordered to pay or receive costs, but do not know how to proceed, contact Geldards Dispute Resolution Team to discuss your options.