Hugh Grant announced recently on X (formerly known as Twitter) that he has settled his legal claim against the Sun newspaper. He wrote “For anyone interested in my lawsuit against the Sun, the news is that I’ve had to settle my claim out of court before it gets to trial.” He went on to explain that he had been offered an “enormous sum” of money and that he doesn’t want to accept the money or settle. Mr Grant then explained the rules around a Part 36 offer. To understand what a Part 36 offer is, please read our offers to settle page.

The important point to make is that there are costs consequences associated with a Part 36 offer and when faced with a Part 36 offer, the receiving party needs to carefully assess the possibility of that offer being matched or beaten at trial. As Hugh Grant put it “…But the rules around civil litigation mean that 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.”

Hugh Grant isn’t the only high-profile individual who has had to grapple with legal costs in recent weeks. It has been well reported that Prince Harry brought a judicial review against the Home Office recently relating to the removal of his publicly funded security.

Now that the case has concluded (although there could be an appeal), the High Court has handed down a costs order. In any legal claim, the court has wide ranging powers in relation to costs. A court generally has discretion about whether costs are payable, the amount of costs and when the costs are to be paid.

As a rule of thumb, the position usually is that the successful party is awarded some of its legal costs payable by the unsuccessful party and it is rare for a court to award 100% costs. In the case of Prince Harry, the court ordered that Prince Harry should pay the Home Office 90% of its legal costs but it is unusual for a losing party to have to pay such a high proportion of costs.

In this case, Prince Harry, had argued that there should be a reduction of costs paid to the Home Office by 50-60% because of the way that documents were disclosed by the Home Office. The court also took into consideration that in November 2023, Prince Harry breached the terms of a confidentiality ring.

When entering into litigation, parties must always be mindful of legal costs and the recoverability of those costs. In view of the inherent risks associated with litigation as well as the high costs, it is prudent for parties engaged in actual or anticipated litigation to consider the merits of making a sensibly pitched Part 36 offer early on.