Elphicke v Times Media Ltd [2025] EWHC 1554 (KB)
Elphicke v Times Media: Limits of Departing from the Default Costs Rule after Discontinuance
Former MP Charlie Elphicke brought proceedings against Times Media Ltd, publisher of The Sunday Times, alleging defamation and misuse of private information. The claim related to 2018 newspaper articles about criminal allegations against Mr Elphicke. He pursued the case for several years but ultimately discontinued the action about six weeks before the scheduled trial. The discontinuance in 2022 triggered a dispute over costs: under Civil Procedure Rule (CPR) 38.66(1), a claimant who discontinues is normally liable for the defendant’s costs up to the discontinuance, unless the court orders otherwise. Mr Elphicke sought to avoid the usual costs burden by arguing that Times Media’s litigation conduct had been improper, while Times Media applied for its costs, including an interim payment on account, after the claim was dropped.
Master McCloud’s Costs Order at First Instance
In a detailed October 2024 judgment, Master Victoria McCloud of the King’s Bench Division addressed the parties’ cross-applications following the discontinuance. The Master ordered that Mr Elphicke pay 80% of Times Media’s costs, to be assessed on the standard basis if not agreed. This represented a 20% reduction in the costs that the defendant would otherwise recover, thereby partially displacing the usual presumption under CPR 38.6. Master McCloud found that serious breaches of the Civil Procedure Rules by Times Media justified a departure from the default rule. In particular, Times Media had failed to preserve crucial evidence, notably a journalist’s phone data relevant to the allegations, despite being on notice of likely litigation. Also as to the wrongful collateral use of the claimant’s witness statements in breach of CPR 32.12(1).
Other allegations against Times Media, as to an accusation relating to pre-action correspondence and a allegation of a refusal to engage in alternative dispute resolution, were not summarily determined by the Master at that stage. She viewed those contested allegations as matters better suited for examination by a costs judge on detailed assessment under CPR 44.11, which allows conduct to be penalised in costs. Instead, Master McCloud confined the immediate costs order to an 80/20 split in the defendant’s favour, reflecting the proven breaches.
The Master further made an order for an interim payment on account of costs. Mr Elphicke was ordered to pay £229,848.41 towards Times Media’s costs, pending final assessment. She further encouraged resolution of the costs dispute by ordering the parties to engage in ADR (mediation) before the detailed assessment took place, warning that a failure to mediate could have adverse consequences in costs.
Appeal Grounds Advanced by the Claimant
Mr Elphicke, as the appellant, sought to challenge Master McCloud’s costs orders in the High Court. His application for permission to appeal raised several grounds, asserting that the Master had erred in principle and exceeded her proper discretion:
Extent of Cost Liability (CPR 38.6 Departure):
The appellant argued that the 20% reduction in costs was insufficient given the Times Media’s misconduct. In his view, whenever misconduct as serious as that found in this case is established, the normal rule should be displaced entirely, for example, by ordering no costs payable to the defendant or even requiring the defendant to pay the claimant’s costs. He contended that the Master’s order for 80% of the costs, meaning he would still bear most of the defendant’s costs, did not adequately reflect the nature of the wrongdoing by Times Media.
Unaddressed Misconduct Allegations:
The appellant further asserted that the Master should have treated additional allegations of misconduct as opening the CPR 38.6 gateway for departure from the costs presumption. He said the Master should have considered these additional issues, which were left unresolved due to the discontinuance, and further reduced or even negated the costs payable to the defendant.
Interim Payment Order:
The appellant also challenged the requirement to make an immediate interim payment of £229,848.41, claiming it unfairly penalised him twice. He submitted that given the defendant’s alleged misconduct and the live issues left for detailed assessment, there was good reason not to order a payment on account at this stage. In essence, Mr Elphicke argued that the Master should have exercised her discretion to disapply the usual CPR 44.2(8) presumption, which favours interim cost payments, in light of the outstanding questions about the defendant’s conduct.
High Court Judgment: Refusal of Permission to Appeal
The appeal came before Mrs Justice Hill in the High Court (King’s Bench Division) as a renewed application for permission to appeal.
Costs Liability (80% Order):
Mrs Justice Hill upheld the Master’s approach to CPR 38.6. She found that the order for the claimant to bear 80% of the defendant’s costs was a lawful and reasonable exercise of discretion. A 20% costs reduction was described as a substantial reduction, particularly given the high level of the Respondent’s costs claimed. The appellant’s assertion that such serious misconduct mandated a greater departure or a wholly different result was rejected.
Hill J noted that costs decisions are highly fact specific and discretionary, other judges might have allowed a larger or smaller reduction, but the 20% figure chosen was comfortably within the Master’s discretion. There was no error in principle in the Master’s assessment of how to sanction the misconduct in costs terms. The High Court emphasised that on appeal, a costs order will only be overturned if the first instance judge misapplied legal principles or reached a decision that was plainly wrong. Here, Master McCloud’s balancing of the issues fell within the range of reasonable outcomes and did not justify appellate interference.
Unresolved Misconduct Issues:
On the complaint that the Master did not fully account for the the other allegations, Hill J agreed with the first-instance reasoning. She held that the Master was entitled to treat those contested allegations as matters for the detailed cost assessment phase, rather than attempting to decide them summarily at the costs hearing. The judge observed that the pre-action allegation was heavily contested. Resolving that issue and what impact that had on the case, would have required testing evidence at trial, as it was a key issue relating to liability. Once the claim was discontinued, there was no trial to definitively resolve that dispute. Similarly, the question of whether Times Media unreasonably refused ADR would have benefited from a full review of correspondence and context, which was better suited to detailed assessment or a dedicated costs hearing.
Hill J endorsed the view that a costs determination should not turn into a satellite trial of issues central to the merits of the abandoned claim. CPR 38.6 exists to avoid re litigating the merits after discontinuance. Therefore, the Master acted correctly in not treating those disputed conduct issues as additional reasons to immediately reduce or deny the defendant’s costs. Instead, she made a proportionate costs order (80%/20%) based on the clear-cut misconduct, leaving the more factually complex grievances to be pursued, if at all, before the costs judge under CPR 44.11. Hill J found no error in this pragmatic approach. Indeed, she noted that the Master had to make a costs order to set the overall parameters for the case, and it was appropriate for the detailed assessment process to then consider any further conduct-based adjustments under CPR 44.11 if warranted.
Furthermore, Mrs Justice Hill addressed the appellant’s reliance on previous cases where defendants faced costs sanctions for refusing ADR. She distinguished those authorities, such as PGF II SA v OMFS Co Ltd [2013] EWCA Civ 1288 and Laporte v Commissioner of Police [2015] EWHC 371 (QB), on the basis that none involved a discontinued claim. In those cases, the normal costs follow the event rule applied post trial, whereas in Mr Elphicke’s situation the strict CPR 38.6 discontinuance rule was the starting point. Hill J reaffirmed that CPR 38.6 imposes a particularly robust presumption in the defendant’s favour once a claim is dropped. General ADR case law does not carve out an exception to that rule absent clear evidence of unreasonable conduct, especially when the issue is factually contested.
Interim Payment on Account:
Mrs Justice Hill also refused permission to appeal the interim costs payment order. CPR 44.2(8) creates a default that the court will order a reasonable sum on account of costs, unless there is good reason not to. The Master had followed this rule by ordering an interim payment, and the High Court found no error in her doing so. The appellant argued that Times Media’s conduct amounted to a good reason to withhold an interim payment. However, Hill J disagreed. The threshold for denying an interim payment is high, and it remains a matter of the judge’s discretion whether the circumstances justify an exception. In this case, the Master was aware of the misconduct issues yet still deemed an interim award appropriate, a decision the High Court found to be within her lawful discretion. The appellant had shown no arguable error in principle in ordering the £229k payment on account. In particular, the ongoing conduct complaints, to be handled at detailed assessment, did not make the eventual costs outcome so unpredictable as to undermine the rationale for an interim payment. The High Court thus held that Mr Elphicke’s objection to paying a sum on account lacked merit, and this ground did not meet the test for a viable appeal.
Having disposed of all grounds, Hill J concluded that the proposed appeal had no realistic prospect of success. Permission to appeal was refused, meaning Master McCloud’s costs orders, including the 80% costs liability for Mr Elphicke and the interim payment, remain in place. The costs dispute will now proceed to detailed assessment, where a costs judge can evaluate the reasonableness of the sums claimed and consider any further conduct-related adjustments under CPR 44.11.
Conclusion
The High Court’s refusal of permission to appeal in Elphicke v Times Media Ltd illustrates the difficulty of escaping the CPR 38.6 presumption on discontinuance. While the courts will intervene to prevent a defendant from profiting fully from litigation misconduct, a discontinuing claimant will still ordinarily bear most consequences of ending the case. The judgment of Mrs Justice Hill affirms that costs orders are a matter of discretion, and appellate courts will rarely interfere absent a clear error. It also provides a useful restatement of the law: serious defendant misconduct can justify a partial departure from the default costs rule, but the response must be balanced and grounded in the evidence, with any remaining disputes left to the detailed assessment process.
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