Hugh Grant phone hacking case

British actor, Hugh Grant recently settled a High Court claim against The Sun newspaper publisher News Group Newspapers (NGN). Grant settled after being offered a “significant sum” following his allegations of unlawful information gathering.

Grant had accused The Sun of engaging in unlawful information gathering practices, including phone hacking, landline tapping, and even breaking into his flat and office. The allegations also extended to the bugging of his car and the illegal acquisition of medical records​.

Despite the serious nature of these allegations, Grant chose to settle out of court due to the potential costs of legal action.

His legal team advised that if he won the case, but the damages awarded were even slightly less than the settlement offer, he would have to pay the legal costs of both sides, potentially amounting to around £10 million by proceeding all the way to Trial. This, coupled with the powerful legal resources at Rupert Murdoch’s disposal, influenced his decision to settle​.

Grant stated the following on X:

“If I proceed to trial and the court awards me damages that are even a penny less than the settlement offer, I would have to pay the legal costs of both sides.”

“Rupert Murdoch’s lawyers are very expensive. So even if every allegation is proven in court, I would still be liable for something approaching £10m in costs. I’m afraid I am shying at that fence.”

Grant has expressed dissatisfaction with the settlement, highlighting his reluctance to accept what he sees as “hush money.”

He has been an outspoken critic of unethical media practices and plans to use the settlement funds to support press reform efforts through organisations like Hacked Off, where he serves on the board​.

For the avoidance of doubt, NGN has consistently denied any unlawful activities, although the linked organisation News International have previously issued apologies and compensation related to similar claims against their now-defunct News Of The World.

Understanding Part 36 offers

Part 36 of the Civil Procedure Rules in England and Wales is a mechanism designed to encourage parties to settle disputes before trial. A Part 36 offer is a proposal made by one party to settle either the whole or part of a claim. It can include an offer to accept or pay a sum of money in satisfaction of the claim. This offer comes with specific legal implications, particularly related to the costs of litigation.

Listed below are the key points regarding Part 36 offers and the associated costs risks:

• Cost consequences: If a Part 36 offer is made but not accepted by the opposing party, and the final judgment is not more favourable to them than the offer, the party that declined the offer may face significant costs penalties. This means that the rejecting party might have to pay the costs incurred by the offering party from the time of the offer onwards, often including higher interest rates on those costs.
• Timing: The timing of a Part 36 offer is crucial. An offer must be left open for a minimum of 21 days, during which the recipient can accept it without incurring any immediate costs penalties. After this period, the offer can still be accepted, but the costs consequences may vary depending on the timing of the acceptance and the court’s decision.
• Withdrawal: An offeror can withdraw or change a Part 36 offer after the relevant period (usually 21 days) has expired, but they must do so formally. If the offer is withdrawn or changed to less favourable terms, it loses the protective costs benefits of a Part 36 offer.
• Confidentiality: Generally, the fact that a Part 36 offer has been made is not disclosed to the trial judge until the case is decided, ensuring that the offer does not influence the judgment itself.
• Encouragement of settlement: The rules around Part 36 offers are designed to incentivise parties to settle disputes early and reduce the length and cost of litigation. They provide a strategic tool in litigation, where both the risk and the potential rewards of making or rejecting such an offer must be carefully considered by the parties involved.

How can ARC Costs assist?

The Hugh Grant phone hacking case against the owners of the Sun, Daily Mirror and Sunday Mirror Group serves as a reminder of the potential costs risks of rejecting a part 36 offer.

Before accepting or making a Part 36 Offer, parties should always obtain the legal advice of a Solicitor or other suitably qualified individual.

Once accepted however, ARC Costs are a team of highly experienced Costs Lawyers and Costs Draftsmen who regularly assist with the recovery and contesting of Part 36 costs once an offer has been accepted.

When litigation is conducted, the legal costs of obtaining damages can sometimes place the receiving party in more of a position of loss than the original damages claim, with costs sometimes extending into the tens, hundreds of thousands, or even millions of pounds.

It is important that a balance is struck as to proportionality, and as independent costs experts, we can assist either receiving or paying parties to maximise/minimise the recovery of costs.

For receiving parties, we regularly assist with the preparation of your Costs Budget or Bill of Costs, conducting negotiations and detailed assessment proceedings. For paying parties, we narrow the legal areas in dispute, preparing Points of Dispute / Points of Reply, and seek to minimise your costs exposure at proportionate fees.

For further information or to discuss your query, call one of the team or 01204 397302, or email one our experts at info@arccosts.co.uk. Alternatively, you can contact us via submission of our contact form, and one of the team will give you a call back to provide free initial advice.

ARC Costs are registered in England and Wales. Our Costs Lawyers are authorised and regulated by the Costs Lawyers Standards Board and we maintain indemnity insurance to deal with costs claims up to multi-million pounds disputes.