4 New Square Chambers’ Ben Williams KC successfully represented Colleen Rooney in the High Court, which handed down judgment on 10 April 2025 dismissing Rebekah Vardy’s allegations of misconduct in the notorious “Wagatha Christie” case.
Deliberately Understating Costs
Mrs Rooney had filed a costs budget which deliberately understated her costs. The certificate for a costs budget requires the solicitor to declare that the costs claimed are a fair estimate of those “it would be reasonable and proportionate for my client to incur”. Mrs Rooney and her solicitors considered that her actual costs were disproportionate, as damages in libel claims now rarely exceed £100,000. So they filed a budget declaring costs substantially lower than her actual and planned expenditure. At the subsequent budgeting hearings, Mrs Rooney’s counsel then repeatedly made disparaging comparisons between Mrs Rooney’s apparent restraint, and the much higher costs budgeted by Mrs Vardy. At one point, he said that Mrs Rooney herself had described the costs as “grotesque”. But the fact that Mrs Rooney’s budget significantly understated her actual legal spend was not disclosed. In fact, Mrs Vardy and Mrs Rooney had spent about the same amount.
Mrs Rooney’s actual, much higher, legal spend was later revealed because she was awarded costs on the indemnity basis. She was therefore able to claim costs in excess of her budget, and did so.
Allegations of Misconduct
Mrs Vardy alleged that Mrs Rooney’s tactics were improper, and that she should be sanctioned for misconduct. It was argued that by unfavourably comparing Mrs Vardy’s expenditure to her own, when in fact the two sides’ expenditure was about the same, Mrs Rooney’s legal team had been dishonest. CPR 44.11 allows a costs judge to reduce a party’s costs to penalise improper litigation conduct.
At first instance, Senior Costs Judge Gordon-Saker rejected the allegation of misconduct, but only narrowly, saying that Mrs Rooney’s solicitors should have disclosed the actual basis on which her budget had been prepared.
The Appeal
Kerr J granted Mrs Vardy permission to appeal this decision, but the appeal was dismissed. Cavanagh J agreed that the wording of the certificate for a costs budget requires a solicitor to state the costs they say are proportionate, and therefore recoverable on standard basis assessment. They are not required to state their actual legal spend. However, he agreed that the correct practice was for a solicitor who understated costs in this way to make that clear before making negative comparisons against an opponent’s budget. However, he considered that this was at worst a misjudgement, not misconduct.
Comment
This case highlights the curious nature of the costs budgeting exercise – which is not directed at what a party is spending, but what they intend to claim in any future standard basis assessment. This distinction is not widely appreciated, and it is doubtful that, at present, many parties adopt the self-limiting approach taken by Mrs Rooney. However, given the wording on the budgeting certificate, her approach was the correct one – especially since in recent cases some Masters have made adverse costs orders against parties they consider to have filed unrealistic budgets.
The case is also a reminder of the benefits that can result from an indemnity basis costs order. Historically, these were fairly modest. But the fact such an order now enables a party to escape its budget may make a considerable difference to their ultimate level of costs recovery, potentially making an indemnity basis order very valuable.
Lastly, since it is an open secret that parties routinely file tactically “low-ball” costs schedules for interim hearings (usually when they expect to lose an application), many solicitors will be relieved to see the High Court rejecting the allegation that this is an improper, or even dishonest, litigation tactic.
