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A High Court judge has given Prince Harry and six co-claimants exactly one week to hand over an initial £9,544,355 to Associated Newspapers Limited (ANL), the first concrete number in a legal costs battle that has been building for months – and one that insurers have been carefully watching.
Mr Justice Nicklin's order, issued today, requires payment by August 28. It's an interim figure only. The Duke of Sussex, Sir Elton John, his husband David Furnish, Elizabeth Hurley, Baroness Doreen Lawrence, Sadie Frost and Sir Simon Hughes all lost their privacy claim against the Daily Mail's publisher outright on July 7, after an 11-week trial examining allegations of phone hacking, car bugging and other unlawful information gathering. Nicklin found the claims lacked "an adequate evidential foundation," and this week's ruling on costs went further against the claimants than the July verdict already had.
The judge didn't just order the group to pay ANL's costs – he ordered them paid on an indemnity basis rather than the standard basis typically applied when a losing party foots the winner's legal bill. On a standard basis, a costs judge can knock out anything not "proportionate" to the case. Indemnity costs strip that protection away; the claimant only avoids paying if a cost was unreasonably incurred. Nicklin pointed to the "exceptional breadth" of the allegations and the claimants' failure to drop claims that could no longer be supported as justification for the tougher standard.
ANL says its total legal spend across the four-year case now sits above £34 million, and the judge declined to cap it – roughly double what the claimants had insured against.
Insurance Business reported on this shortfall in late July, when the seven claimants' combined adverse-costs cover of £16.2 million was already tens of millions short of what ANL was claiming. At the time, barrister Nicholas Bacon KC argued to the court that ANL had quietly raised its own cost estimate from an earlier £20 million figure without warning, leaving the group under-covered almost by surprise. Nicklin's decision to award indemnity costs on top of that shortfall pushes the group closer to the worst-case scenario their policies weren't built for.
Whether the group's after-the-event (ATE) cover responds in full is a separate question for insurers and brokers. Insurance Business examined that coverage question directly after the July verdict, noting that ATE policies can be affected not just by the size of a costs award but by findings on how a case was conducted, including any suggestion of non-disclosure at the policy's inception. Nicklin's ruling includes no finding of dishonesty against any claimant, which will matter when insurers assess their exposure.
For carriers writing legal expenses, professional indemnity or ATE cover for high-net-worth or high-profile clients, the case shows how a risk underwritten years earlier can look very different by the time it resolves. A policy limit that seemed generous when a claim was filed can look thin after a four-year fight and an 11-week trial – especially once a court decides the losing side should pay on the harsher indemnity basis rather than the standard one. Further hearings are still to come to determine the full amount owed, so the final bill – and the size of any shortfall – isn't fixed yet.
The claimants have until October 2 to seek permission to appeal Nicklin's original July judgment.
