Prince
Harry and co-claimants face huge legal bill due to insurance shortfall
Claimants’
cover might not meet Associated Newspapers’ costs for defending phone-hacking
case, high court hears
Caroline
Davies
Wed 29
Jul 2026 16.17 BST
The Duke
of Sussex and his co-claimants could be millions of pounds out of pocket after
losing their privacy case against the publishers of the Daily Mail, the high
court in London heard.
The seven
claimants, who include Prince Harry, Doreen Lawrence and Elton John, sued
Associated Newspapers Limited over allegations of unlawful information
gathering. Their claims were dismissed in their entirely by Mr Justice Nicklin
on 7 July and now their insurance may not cover the costs incurred by ANL in
defending the case.
In a
two-day hearing beginning on Wednesday to determine how costs should be paid,
the court heard there was a shortfall between the £16.2m insurance cover the
claimants had, and ANL’s reported costs of £34.5m.
Lawyers
for ANL say the claimants should pay its costs on an indemnity basis, under
which the losing party covers the other side’s costs without the need to show
that those costs are proportionate.
ANL is
asking for an interim £9,950,624.37 payment. The claimants have offered an £8m
interim payment.
Antony
White KC, for ANL, argued that the claimants’ conduct justified costs on an
indemnity, rather than standard, basis, and said the allegations were “of the
broadest scope and utmost seriousness”.
They
alleged misconduct including “serious wrongdoing amounting in many cases to
criminal conduct” against no fewer than 77 journalists, editors and executives,
although only 23 were involved in the claims. Some allegations were
unceremoniously abandoned at trial “without any apology or even
acknowledgment”.
White
said the legal action was part of a “campaign” to demonstrate ANL had “misled
the Leveson inquiry”, using high-profile individuals to persuade the government
to implement the second part of the inquiry.
The
allegations were pursued to the “bitter end”, with the proceedings seen as the
“vanguard”, or first wave of cases, before a “banquet of litigation” in a
strategy to swamp ANL with other potential claims, he said.
The
strategy was such that, even if the full panoply of allegations were not
proved, any finding against ANL would be a “catastrophe” for the Daily Mail
publisher, White added.
The
claimants, who included David Furnish, Sadie Frost, Liz Hurley and Simon
Hughes, cast a “strikingly wide” net for their claim “in the hope of catching
some fish”.
White
said he was sad to say that Lawrence, the mother of the murdered teenager
Stephen Lawrence, was recruited to the case by Harry as a “national treasure”
to garner public sympathy and give the claims the necessary degree of
credibility. “That is a matter of regret for my client, but it is not to be
shrunk from,” he said.
White
pointed to the statement, issued by Harry and Lawrence after the 11-week trial,
which attacked the judge and called the 426-page ruling a “complete and obvious
whitewash”.
Nicholas
Bacon KC, for the claimants, said in written submissions that the judge should
not award ANL its costs on the stricter, indemnity basis, adding that the
incurred costs as of this month were nearly £34.5m, which “exceed its approved
budget” by more than £18.6m.
It
reflected “an astonishingly high legal spend” by ANL and an “entirely cavalier”
and “no expense spared” approach, overriding the principle of proportionality
that seeks to ensure parties are on an equal footing.
The
claimants had obtained insurance cover of a combined £16.2m. “At that level of
cover, the claimants would reasonably expect to be insured for the total of
Associated’s incurred costs and approved estimated costs.”
He told
the court ANL had increased its legal spend “without telling us”, and had
previously told the court its spend would be £20m.
He said
that the group had “conducted themselves honestly and in good faith”. Referring
to the post-trial statement by Harry and Lawrence, he said “The costs to be
ordered at this hearing concern the action itself, not the reaction to it.”
ANL
argued the costs had been incurred during the four-year legal battle and
11-week trial.
Bacon
said ANL knew what adverse costs the claimants had insured themselves for, and
there was no suggestion its costs were anything like what it was now seeking
until it disclosed last Friday that its total spend was £34.5m. “They have left
us in a world where we are uninsured,” he told the judge.
All the
claimants had entered the litigation in “good faith”, Bacon said. While the
court dismissed their claims, it did not make any findings against them of
“dishonesty or lack of sincerity in belief”.
“They
accept they have lost and costs should follow the event.” Bacon said. But ANL
wished to take that further and had stated publicly that it intends to “go for
the jugular” in the costs hearing, he added.
The
hearing continues.
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