Prince Harry, Sir Elton John and the Associated Newspapers Case: What the costs order could mean for the claimants

On 7 July 2026, the claimants in the case brought by Prince Harry and six others, against Associated Newspapers Limited (“ANL”) suffered a catastrophic defeat. Mr Justice Nicklin dismissed all of the claims which involved alleged misuse of private information and/or breach of confidence arising from alleged unlawful information gathering. The claimants, who also included Sir Elton John, Baroness Lawrence of Clarendon OBE, David Furnish, Elizabeth Hurley, Sadie Frost and Sir Simon Hughes, alleged that ANL had obtained private information by unlawful methods, including phone hacking, blagging, use of private investigators and other intrusive techniques.

The court emphasised that the burden of proof was on the claimants, who were required to prove that it was more likely than not that the relevant articles or incidents were the product of unlawful information gathering. The court explained that suspicion and inference were not enough; the more serious the allegation, the more convincing the evidence required before the court could find it proved.

Following a 46-day trial, the court determined that there was insufficient evidence to prove the alleged claims and therefore, they were dismissed in their entirety.

Now that the court has handed down its judgment, attention has shifted to costs. The judgment leaves the claimants exposed not only to their own legal fees, but also to a substantial costs award in favour of ANL.

The ordinary costs position

In civil litigation, the usual starting point is that costs follow the event (or more commonly referred to as “the loser pays”) meaning that the unsuccessful party is ordered to pay the successful party’s costs. Whilst this is the starting point, the court has wide discretion to make a different order and to consider all the circumstances of a case. There are a range of factors the court may consider when making a costs order including, for example, the conduct of the parties and whether reasonable settlement offers were made earlier on in proceedings that, if accepted, could have avoided costs now being sought.

For the claimants’ case against ANL, the costs consequence of losing is potentially far more serious than the loss of the claim itself. It is likely they will be required to meet a significant proportion of ANL’s costs, in addition to their own solicitors’, barristers’ and expert costs incurred over four years of litigation. It is reported that the claimants accept that costs should follow the event however, the sum to be paid remains a point of contention and largely rests on whether ANL’s costs are to be assessed on a standard or indemnity basis.

Standard basis versus indemnity basis

The central costs issue is whether ANL’s costs should be assessed on the standard basis or the indemnity basis. On the standard basis, costs must be reasonable and proportionate taking into account the circumstances of the case, and any doubt is resolved in favour of the paying party, likely to be the claimants in this case. On the indemnity basis, costs need only be reasonable. Proportionality has a reduced role. Any doubt is generally resolved in favour of the receiving party, likely to be ANL, as there is a presumption that costs are proportionate. As such, if costs are assessed (and therefore awarded) on an indemnity basis, this can materially increase the amount recoverable by ANL.

Perhaps unsurprisingly, ANL has argued it should be awarded indemnity costs, relying on the seriousness and breadth of the allegations, the way the case was pursued, and the fact that some allegations were abandoned during the trial. The claimants oppose that approach, contending that they brought the claims in good faith and that dismissal following a detailed evidential assessment does not mean their conduct warrants the court’s condemnation. The claimants also refer to ANL’s final costs figure, reported to be approximately £34.5 million, as being significantly in excess of its approved costs budget, by more than £18.6 million.

The insurance shortfall

The reported figures illustrate the scale of the potential exposure for the claimants. The claimants reportedly have approximately £16.2 million in combined adverse costs insurance, while ANL’s costs have been reported at approximately £34.5 million. If those figures are accepted, the available insurance may fall substantially short of ANL’s claimed costs.

This creates a serious, practical risk for the claimants as if the recoverable costs exceed the policy limits, the claimants may be personally exposed for the balance, subject to the precise terms of their insurance arrangements and any order made by the court.

Interim payment

ANL has reportedly sought an interim payment of just under £10 million, while the claimants have offered £8 million. An interim payment on account of costs is intended to provide the successful party with immediate partial recovery of their costs pending assessment of the final costs figure.

The interim payment will not necessarily represent the final costs liability. However, it is a notable indicator of the court’s assessment of the likely recoverable sum and may increase pressure on the claimants to resolve any remaining costs dispute, particularly if insurance cover is insufficient or disputed.

Key costs issues for the claimants

This case highlights several important considerations for claimants.

• Insurance is not a complete shield: Adverse costs insurance may mitigate risk, but it does not eliminate it entirely where the opponent’s costs exceed the policy limit or where coverage issues arise.
• Costs budgeting matters: Even in high-profile, high-value litigation, the court may scrutinise whether costs are reasonable and proportionate. There was earlier judicial criticism of the projected budgets in this litigation which underlines the importance of realistic costs planning.
• Serious allegations carry serious costs risk: Allegations of unlawful conduct, dishonesty or criminality require careful pleading and robust evidence. If such allegations fail, particularly if there are many, the costs consequences may be aggravated.
• Indemnity costs can materially increase exposure: A losing claimant who faces indemnity costs is likely to pay more than would be recoverable on the standard basis, particularly where the alleged claims were expansive, weakly evidenced or pursued in a manner the court may consider to be unreasonable.
• Group claims can create uneven risk: Where multiple claimants pursue overlapping claims, issues may arise as to allocation of liability, shared costs, individual conduct, and whether one claimant’s position affects the costs burden of others.

Conclusion

The costs phase, which was expected to be dealt with at hearings on 29 and 30 July 2026, of this case may prove as significant as the substantive judgment. The decision is a timely reminder for claimants and their solicitors pursuing serious and factually complex allegations that adverse costs exposure can be substantial, particularly where litigation is long-running and heavily contested. The immediate question is whether the court will treat this as an ordinary losing claim attracting standard costs, or as litigation justifying the harsher consequences of indemnity costs. We eagerly await the outcome.

If you would like to discuss any concerns you have regarding potential cost consequences for an ongoing or potential dispute, do not hesitate to reach out to Geldards LLP’s specialist Commercial Dispute Resolution team who will be able to assist with your queries.