By

The recent ruling in Henry v NGN has highlighted the importance of law firms applying careful budgeting and a system of ongoing monitoring of costs in defamation cases.

The case related to the defamation of Mrs Henry by News Group Newspapers. The case itself settled close to trial last year. On consideration of costs, it was found that although costs budgets had been approved by both sides, the claimant’s legal team had incurred significant extra cost in obtaining witness statements and disclosure.

In order to claim these additional costs, under Practice Direction 51D the claimant lawyers had to show ‘good reason’ for such a departure from the budget provided. On this occasion, although it was shown that a significant amount of additional work was necessary subsequent to the budget, a ‘good reason’ for departure from the budget was not established.

This case highlights the real need to appropriately manage costs and to liaise with the defendants with regard to any overspend or to request an increase to the budget.

Permission to appeal has since been granted.