The Prince Harry Litigation: A Stark Reminder of the Risks and Costs of Modern Civil Litigation
The recent dismissal of Prince Harry’s privacy claim, together with those of Sir Elton John, Baroness Doreen Lawrence, Elizabeth Hurley and others against Associated Newspapers Ltd (“ANL”), serves as one of the most striking illustrations in recent years of the financial risks inherent in High Court litigation.
Whilst the judgment itself concerned allegations of unlawful information gathering, the aftermath has arguably become just as significant. The focus has now shifted from liability to costs—and the figures being discussed are extraordinary.
The Fundamental Principle: Costs Follow the Event
One of the first lessons taught to civil litigators is the simple proposition that:
The unsuccessful party will usually be ordered to pay the successful party’s costs.
Although the court retains a discretion under CPR Part 44, departure from that principle is comparatively rare where one party succeeds completely.
Here, Mr Justice Nicklin dismissed every one of the claimants’ claims after an extensive trial lasting approximately eleven weeks. The judge concluded that the allegations had not been proved and that lawful explanations existed for the publication of the articles complained of.
That left the claimants exposed to a very substantial adverse costs order.
How Much Are the Costs?
Different figures have been reported at different stages of the proceedings.
Associated Newspapers has informed the court that:
- its legal costs amount to approximately £34.5 million;
- it seeks recovery on the indemnity basis;
- it is requesting an interim payment approaching £10 million pending detailed assessment.
The claimants’ legal insurance is reportedly capped at approximately £16.2 million, potentially leaving an exposure of over £18 million if the defendant ultimately recovers the entirety of its costs.
More broadly, during and immediately after judgment the overall litigation was widely described as having generated around £50 million in legal costs across both sides. That figure appears to represent the aggregate costs of all parties rather than merely the defendant’s recoverable costs.
Indemnity Costs Matter
Perhaps the most interesting issue now before the court is not simply the amount of costs but the basis upon which they should be assessed.
Most successful litigants recover costs on the standard basis, under which:
- only costs that are both reasonably incurred and proportionate are recoverable; and
- any doubt is resolved in favour of the paying party.
Indemnity costs are materially different.
On an indemnity assessment:
- proportionality no longer applies in the same way;
- doubts are resolved in favour of the receiving party;
- recovery is typically substantially higher.
Historically, indemnity costs are reserved for litigation conduct which the court considers “out of the norm”. Whether ANL succeeds in obtaining such an order remains to be determined, but the application itself demonstrates how the costs consequences can escalate after judgment.
Litigation Is Never Just About Merits
Cases of this scale also illustrate an important point that experienced litigators appreciate.
A party may genuinely believe they have been wronged.
They may have credible witnesses.
They may have experienced counsel.
Yet if they fail to discharge the burden of proof, the financial consequences can be catastrophic.
Civil litigation is therefore not merely an exercise in establishing whether someone believes they are right. It is an exercise in proving a case to the required standard of proof, supported by admissible evidence.
The Commercial Reality
The publicity surrounding this litigation inevitably focuses upon the personalities involved.
However, for ordinary businesses and private individuals, the case demonstrates why sensible commercial dispute resolution remains so important.
Before issuing proceedings, parties should ask themselves:
- What are the realistic prospects of success?
- What is the likely recoverable value of the claim?
- What will the litigation cost?
- What happens if we lose?
- Is there a commercial settlement available now?
Too often, parties concentrate exclusively on the value of their claim whilst overlooking the potentially devastating exposure to adverse costs.
Why Mediation Matters
The Civil Procedure Rules increasingly encourage parties to engage constructively in alternative dispute resolution.
Following decisions such as Churchill v Merthyr Tydfil CBC, courts are prepared in appropriate cases to require parties to engage with ADR, and unreasonable refusal to mediate can itself attract adverse costs consequences.
Mediation does not require either party to concede liability.
Instead, it provides an opportunity to control risk, avoid years of litigation and, crucially, avoid the possibility of a costs bill that exceeds the value of the dispute itself.
Conclusion
The Prince Harry litigation is likely to be remembered not merely because of the celebrity claimants but because it provides a vivid demonstration of the economics of modern litigation.
Whether the ultimate recoverable costs prove to be £34.5 million, nearer £50 million in aggregate, or some lower figure after detailed assessment, the message is the same: litigation carries enormous financial risk.
For lawyers, insurers and commercial clients alike, the case reinforces an enduring lesson. Winning at trial is never guaranteed. Losing can be extraordinarily expensive. Careful early case evaluation, realistic advice on prospects, and genuine engagement with mediation remain among the most effective ways of managing that risk.