In a landmark High Court ruling, Prince Harry and six other high-profile figures have been ordered to pay up to £34.5 million in legal costs to the publisher of the Daily Mail following the collapse of their privacy case. The claimants, including Sir Elton John and actress Liz Hurley, must make an initial payment of £9.54 million to Associated Newspapers Limited (ANL) by next Friday.

Justice Nicklin delivered a scathing assessment of the case, describing the claimants' conduct as "unreasonable to a high degree." The judge's decision on 7 July had already dismissed allegations of unlawful information-gathering, which ANL had consistently denied. The group now has until 2 October to decide whether to pursue an appeal.

The other claimants in the case are Sir Elton John's husband, David Furnish; former Liberal Democrat deputy leader Sir Simon Hughes; racial justice campaigner Baroness Lawrence; and actresses Sadie Frost and Liz Hurley. While the group had insurance coverage for up to £16.2 million of ANL's costs in the event of a loss, the latest ruling could see the publisher seek to recover its full expenditure, reportedly amounting to £34.5 million. This leaves the claimants facing a potential additional bill of approximately £18 million.

Justice Nicklin expressed significant concerns about the reasonableness of ANL's claimed costs, stating, "I regard a claim for costs in excess of £34 million as, on its face, excessive and as giving rise to real concerns as to whether all of the costs now claimed by Associated were reasonably incurred and are reasonable in amount." Despite these reservations, the judge opted against imposing a cap on recoverable costs, arguing that such a move would be overly broad and risk unfairness.

The ruling also determined that ANL's costs should be assessed on an indemnity basis, a more favorable standard for the publisher in terms of recovery. Justice Nicklin highlighted the claimants' failure to withdraw any serious allegations of wrongdoing during the proceedings, calling it "striking" and criticizing the approach as improper and highly unreasonable. He emphasized that allegations of criminality or grave impropriety should not be left unresolved, stating, "If a party no longer advances such an allegation, or no longer has a proper evidential basis for advancing it, the allegation should be withdrawn clearly and in terms."

In response to the ruling, ANL issued a statement characterizing the decision as "a devastating critique of an attempt to destroy a newspaper and the reputations of its journalists, editors, and executives." The publisher's legal victory comes shortly after Prince Harry and Meghan, Duchess of Sussex, announced plans to return to the UK, with their children set to begin school in September.

The trial saw extensive testimony from dozens of witnesses, including Prince Harry and the other claimants, many of whom attended court in person. ANL presented evidence from numerous current and former journalists and executives, all of whom denied any illegal activity.

Sir Simon Hughes told the BBC he was "disappointed" by the judgment and is currently considering whether to appeal either the substantive ruling or the costs decision, or both. In a joint statement following the initial judgment last month, Prince Harry and Baroness Lawrence expressed their frustration, stating, "We came to court seeking justice and accountability. But we have received neither. It is a complete and obvious whitewash, but sadly not altogether unexpected."

Under civil litigation conventions, the losing party is typically required to cover the "reasonable" legal fees of the prevailing side, in addition to their own costs. These are usually agreed upon and capped before trial. However, ANL's initial request for an interim payment of over £9.9 million was later revealed to be a fraction of its total expenditure, which far exceeded the previously agreed cap of £16 million.

Legal experts suggest the battle over costs is far from concluded. Colin Campbell, a former specialist costs judge now with Kain Knight, noted that the ruling represents a significant victory for ANL, as it removes the constraints of the previously approved costs budget. However, he cautioned that Justice Nicklin's criticism of the £34.5 million bill could play a crucial role in future cost recovery proceedings. "The judge was scathing about their projected £34.5 million costs bill, branding it exceptionally high and excessive and describing it as a matter of real concern," Campbell said. "That criticism could prove highly significant when the publisher ultimately seeks to recover its costs."