It's probably only fair to add that the final section (after the costs decision was explained) debated whether there should be a cap on the indemnity costs, and the two sides were invited to give written arguments.
Judge Nicklin decided that he would not impose a cap, given that he had already decided for costs on an indemnity basis, and that if the two sides could not agree there was already a proper procedure for coming to an amount (a hearing with a costs judge).
He did comment that Associated's costs were exceptionally high, but that they would be fairly assessed by the costs judge, and unreasonable costs would not be allowed.
170
Those figures are striking. In ordinary language, the costs appear exceptionally high. They are largely unexplained. I noted at the hearing that costs of this order are unprecedented in the Media & Communications List. Standing back, as the Judge who case-managed and tried these claims, I regard a claim for costs in excess of £34 million as, on its face, excessive and as giving rise to real concerns as to whether all of the costs now claimed by Associated were reasonably incurred and are reasonable in amount. That observation is not a summary assessment, still less a determination of any issue that will arise on detailed assessment. It reflects the scale of the costs now claimed when set against the issues in the proceedings, the assumptions underlying the costs
management process, and the Court’s previous attempts to impose discipline and proportionality on the conduct of the litigation. The reasons for the increase have not yet been tested in the way they will be tested on assessment. Whether, and to what extent, those costs are recoverable will be a matter for the Costs Judge if the costs are not agreed.
171
I also recognise that much changed after the original costs management process. The litigation did not unfold precisely on the basis assumed when the budgets were originally prepared. Significant additional work was generated by later developments. By way of example, there were the various episodes relating to Mr Burrows’ evidence. The trial itself lasted 11 weeks rather than the 9 weeks originally anticipated. There were also further case management developments, disclosure issues and trial preparation consequences. These matters may provide explanations, in whole or in part, for increases in expenditure. Whether they do so, and to what extent, will have to be
considered on proper evidence.
172
It follows that it would be unsafe for this Court, at this stage, to select a maximum recoverable figure. The Court does not have before it the materials that would be required to undertake anything approaching an assessment. I do not have a bill of costs. I do not have the detailed schedules that will be prepared for assessment. I do not have points of dispute or replies. I do not have evidence explaining, phase by phase and item by item, why the costs were incurred, what work they represented, whether that work was caused by developments in the proceedings, and whether the amounts claimed are
reasonable.
173
The Claimants propose a cap in the range of £18–£20 million. I understand why that range is advanced. It is said to be anchored to the costs information Associated presented during the budgeting process and to the Claimants’ ATE position. But I am not persuaded that I could select any figure within that range, or any other figure, in a principled way on the material before me.
174
A cap of £18 million, £20 million, or some different figure would inevitably be broad brushed. It would risk being no more than a judicial estimate of what appears, at this stage, to be a reasonable maximum. That would be vulnerable to the charge that it was arbitrary. It would also risk unfairness to Associated, because it would deprive Associated of the opportunity to demonstrate, on evidence and in the proper forum, that costs above the cap were reasonably incurred and reasonable in amount.
175
The Claimants submit that a cap would avoid years of expensive wrangling and would conserve court resources. I see the force of that submission. There is a real danger that any detailed assessment in this case will be lengthy, expensive and contentious. But that cannot justify replacing the assessment process with an unparticularised ceiling unless the Court can identify a principled and fair basis for doing so. The fact that detailed assessment may be difficult is not, of itself, a reason to deprive the receiving party of the opportunity to justify its costs.
176
Nor do I consider that the Claimants’ ATE position provides a sufficient basis for a cap. The Claimants say that they obtained ATE by reference to the costs information available to them and that Associated’s later disclosure of costs has left them exposed. Associated disputes that there was any representation or reliance sufficient to justify a cap. Associated also points to the 5 November 2025 request that Associated confirm it would not seek to recover above budget, which Associated did not accept, and to the fact that no application was made at that stage.
177
I do not need finally to resolve every point in that exchange. Even assuming in the Claimants’ favour that they reasonably used the approved budget and the costs information provided by Associated as important reference points when considering ATE, that does not produce a principled figure for a cap. It also does not establish that the proper remedy is to restrict Associated’s recoverable costs, rather than to leave reasonableness and recoverability to detailed assessment.
178
I have considered whether a more limited form of order might be appropriate:
for example, a cap by reference to particular phases, a date, or categories of work. In principle, such an order may be permissible. But the same difficulty arises. Without the evidence that would be available on assessment, I cannot identify the figure or figures in a way that would be principled, fair and non-arbitrary.
179
The proper protection for the Claimants lies in the detailed assessment process.
That assessment will be rigorous and evidence based. Associated will have to justify the costs it claims. The Costs Judge will be able to scrutinise whether particular work was reasonably undertaken, whether the hours claimed were reasonable, whether the level of fee earner was appropriate, whether there was duplication, whether work flowed from developments in the litigation, whether costs were caused by matters for which the Claimants should fairly be responsible, and whether the sums claimed are reasonable in amount. On an indemnity assessment, doubts are resolved differently, but the receiving party is still not entitled to recover unreasonable costs.