Prince Harry and six fellow high-profile claimants have been warned they face a significant financial risk in their £38million privacy lawsuit against Associated Newspapers, with judges cautioning that losing the case could leave them personally liable for millions in legal costs.
Judge David Cook and Mr Justice Nicklin issued a ruling on Tuesday stating that the group, which includes Baroness Lawrence of Clarendon, must have the "clearest possible understanding" of the consequences arising from their legal action amid escalating costs and the financial risk built into their insurance arrangements.
The judges said the claimants could face a devastating financial burden if the case does not go in their favour, warning that those who lose may find themselves responsible for substantial bills.
The court heard that the seven claimants hold a combined insurance policy worth £14.1million to cover Associated Newspapers' legal costs should they all lose their case.
Prince Harry warned of major financial risk in privacy lawsuit
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Each individual has also secured separate After The Event insurance cover of £2.35million.
However, the judges highlighted a structural risk within this arrangement.
Should some claimants win while others lose, or if certain parties withdraw from proceedings, those left on the losing side could face bills far exceeding their individual £2.35million cover.
"If that means the individual claimants need to reassess their ATE cover, that can only be in their own best interests," the judges stated in their ruling.
Prince Harry has accused the Daily Mail publisher of illegal activity | GETTYThe Duke of Sussex and Baroness Lawrence, mother of murdered teenager Stephen Lawrence, are pursuing claims against the publisher over alleged phone hacking, call bugging and other unlawful practices, including the "blagging" of private information.
Sir Elton John, his husband David Furnish, actress Sadie Frost, model Liz Hurley and politician Sir Simon Hughes are also among the claimants bringing the action.
Associated Newspapers has strenuously rejected all accusations, describing them as "lurid" and "simply preposterous".
The judges noted that each claimant's individual case is intended to cross-support the others, with all seven bringing a shared central argument alongside their specific allegations against the newspaper group.
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| GETTYJudge Cook said it was “particularly important” to deal with the insurance and cost-sharing issues now, as “substantial costs have already been incurred and the parties will soon be incurring more substantial costs in preparation for the trial next year.”
They had previously ruled that the estimated £38.8million in legal costs was "clearly outside the range of the reasonable", with Judge Cook describing such sums as "manifestly excessive and therefore disproportionate".
The judges have allowed some variations to the approved budgets, but the claimants remain capped at around £4.1million and ANL at around £4.5million.
They stressed the urgency of addressing the insurance risk now, noting that substantial costs have already accumulated and further significant expenses will arise as trial preparations intensify.
A preliminary hearing is scheduled for December 18 ahead of the nine-week trial, which is set to commence in mid-January.