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The recent decision in Vardy v Rooney [2025] EWHC 1027 (KB), 2025 WL 01237461, provides some guidance into the importance of cost transparency in civil litigation. Posting on social media, Ms Rooney spoke of her relief that the new ruling “finally brings closure for my family and I. Throughout this long process, I am grateful that the judgements have consistently gone my way. However, as I have always maintained, this claim did not need to be made or run for as long as it did. The time and money should have been put to better use.”
The issue in the appeal is whether the trial judge was wrong not to find that the Defendant or her solicitors had conducted themselves improperly or unreasonably for the purposes of CPR 44.11(1)(b). Mr Justice Cavanagh, sitting in the High Court, ruled that Mrs Vardy must pay more than £1.4m of Mrs Rooney’s legal costs after the pair’s “Wagatha Christie” libel trial. He stated that although Mrs Rooney’s legal team could have been more transparent about the basis on which they had prepared their costs, they had not attempted to intentionally mislead the Court.
Background to the decision
Mrs Vardy, who lost her libel case against fellow WAG Mrs Rooney, was ordered by the trial judge to pay 90% of Mrs Rooney’s costs on the indemnity basis.
CPR PD 3, paragraph 3(a) requires that save in exceptional circumstances, parties must lodge a Precedent H document for costs budgeting purposes. Precedent H includes a statement of truth, which must be included at the bottom of the document, immediately before the space for the signature of the party’s solicitors. When filling in Precedent H, a party’s solicitors are required to set out the incurred and predicted future costs which it would be reasonable and proportionate for their client to incur in the litigation. This is the basis upon which costs are awarded on the standard basis under CPR 44.3(2).
During the libel proceedings, both parties agreed on their costs budgets and filed Precedent H forms, setting out incurred and future predicted costs. Mrs Vardy argued that Mrs Rooney’s legal advisers misled the Master at the costs hearing because they did not make clear to the Master or to Mrs Vardy’s Solicitors that the cost figures for Mrs Rooney in Precedent H did not set out the actual costs that she had incurred to date. Instead, they were Mrs Rooney’s Solicitor’s estimate of the incurred costs that would be considered reasonable and proportionate for a costs award on a standard basis. This was a lower figure than the actual costs incurred to date.
This calculation resulted in Mrs Vardy’s incurred costs being considerably higher than the figures representing Mrs Rooney’s incurred costs. This would not have been the case if Mrs Rooney had set out the actual costs she had incurred to date.
Mrs Vardy accepted that if a party did not believe that their actual incurred costs would be considered reasonable and proportionate on a costs assessment, they could populate the Precedent H with incurred costs calculated on the basis of what would be reasonable and proportionate. However, she claimed Mrs Rooney’s legal team was not transparent about doing so, thereby giving the misleading impression that Mrs Rooney’s actual incurred costs were much lower than her own. She argued that that amounted to unreasonable and/or improper conduct within the meaning of CPR r.44.11(1)(b), entitling the costs judge to disallow some of Mrs Rooney’s costs.
This was rejected by the costs judge, who concluded that Mrs Rooney’s Solicitors may have believed that Mrs Vardy’s Precedent H submissions had been prepared on the same basis as Mrs Rooney’s.
Decision on appeal
Mr Justice Cavanagh rejected Mrs Vardy’s appeal, which was based on the argument that the costs judge erred in finding that Mrs Rooney’s Solicitors would, or could, have believed that she had also understated her incurred costs and had also ignored the fact that regardless of what Mrs Rooney’s legal team believed, misleading figures had been presented to the Master at the cost management meeting.
In Precedent H’s statement of truth, Mrs Rooney’s legal team stated, “This budget is a fair and accurate statement of incurred and estimated costs which would be reasonable and proportionate for my client to incur in this litigation.” This and other credible evidence showed that Mrs Rooney’s Solicitor had used “reasonable and proportionate” figures because that was what he believed CPR Pt 3 and Precedent H required. It was reasonable for Mrs Rooney’s Solicitors to assume that Mrs Vardy’s legal team had interpreted the requirements of CPR Pt 3 and Precedent H in the same way they had.
Regarding whether Mrs Rooney’s Solicitors had misled the Master when submitting their costs report, Mr Justice Cavanagh said the costs judge was entitled to find that Mrs Vardy had not provided enough evidence that this was the case. The costs judge had criticised Mrs Rooney’s legal team for attacking the amount of Mrs Vardy’s incurred costs without making it clear that their own Precedent H had been prepared on a “reasonable and proportionate” costs basis, but that did not undermine his final decision. To reach the level of unreasonable or improper behaviour, the conduct in question had to amount to more than a mistake or negligence.
Comment
Given the publicity this case generated and the enormous legal fees, it must be a relief to both parties that the saga is over. What is clear in the appeal judgment is that transparency around costs is vital. Had Mrs Rooney’s legal team been open about how they had calculated their costs, the grounds for appeal would have been negated.
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