What can the case of Grant v News Group Newspapers teach us about the power of settlement?

The case of Hugh Grant v News Group Newspapers serves as a useful reminder of the power of making offers to settle, particularly in the form of Part 36 offers, in cases of live litigation.

British Actor Hugh Grant has said that he was forced to settle his claim against the publisher of The Sun: News Group Newspapers Limited (NGN), out of court, before the matter could proceed to trial.

Background to the claim

• March 2022: Mr Grant brought a claim against NGN in respect of allegations that NGN used private investigators to tap his phone, burgle his house and obtain private information by deception
• April 2023: The claim then proceeded to trial in respect of an application made by NGN to strike out Mr Grant’s claim. NGN alleged that Mr Grant’s claim should not be allowed to proceed because it dated back further than six years, this being the time limit for bringing this kind of civil action in the courts
• The judge ruled that those parts of Mr Grant’s claim relating to phone-hacking were out of time and the application was granted in part
• January 2024: The claim is due to proceed to trial, but only on the ground that NGN misused private information.

Settling outside of court

Parties are encouraged to settle litigation outside of court to prevent costly and time consuming proceedings.

Mr Grant explained in a string of posts on X (formerly Twitter) that NGN had offered him an “enormous sum of money” to settle the matter out of court.

Despite not wishing to accept the money, it appeared that Mr Grant’s decision to do so was due to the risk of the adverse costs consequences of rejecting the offer made by NGN.

Mr Grant says that “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”.

How do Part 36 offers work?

In civil litigation, it is usually the case that the losing party pays the winning party’s costs. However, parties can exercise what are known as ‘Part 36’ offers to alter this position. This usually involves an offer to pay a certain sum, as well as a proportion of legal costs.

Part 36 offers function as a powerful way to discourage parties from going to court to sue for sums that they may have already been offered by the other side out of court. Such offers are particularly powerful when made for a sum that the other party is unlikely to exceed at trial.

The adverse costs consequences of Part 36 offers are such that if a party rejects a Part 36 offer and subsequently fails to secure a more advantageous award at trial, they may be ordered by the court to pay all of the costs of the case, both their own and the other side’s, even if they are successful at trial.

It is common that the legal costs incurred in preparing for and attending a trial exceed the amount that may be awarded by the court if the claimant is successful. This can defeat the object of the claimant succeeding in court as any damages will be immediately payable in respect of the defendant’s legal costs.

In Mr Grant’s own words- going to trial would “cost a fortune” and “unless you happen to have a fortune and are prepared to lose a fortune, it simply wouldn’t be worth it”.

What can we learn from this case?

Pre-trial settlements usually avoid the need for the court to make any findings on the legal and factual issues in dispute. This can be difficult for one party to accept – particularly when the case involves more than just money to that party.

However, if it gets to the point where it is unlikely that an offer made by an opponent will not be bettered at trial, a party to a claim has to take the offer on the table. If they don’t, even if they win at trial, they will lose overall. It appears that threshold was reached here.

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