British Airways - £1m advertising costs not recoverable

Most readers by now would have seen numerous adverts pop-up online encouraging victims of the British Airways data breach to sign up in order to claim compensation - and with advertising costs totalling £1m, it is no wonder why.

At the CCMC of Weaver & Ors v British Airways Plc, PGMBM, the lawyers leading the group litigation against British Airways, sought to include these costs in its cost budget, however the High Court has held such costs are not recoverable.

PGMBM has already incurred £443,000 in advertising costs, and intends to incur a further £557,000 in order to seek additional claimants. It argued that such costs constitute work done “for use and service in the litigation” and were relevant to an issue in the claim and/or attributable to the paying party's conduct. BA responded by arguing that such costs were not recoverable as a matter of law, relying on the Court of Appeal decision in Motto v Trafigura.

Mr Justice Saini accepted BA’s argument, ruling that the past and future advertising costs were “essentially general overheads” and reflected the claimant solicitors “getting the business in”. As such, they should not be borne by BA should it be unsuccessful in the litigation.

Mr Justice Saini further made it clear that they were not costs that were being incurred pursuant to paragraph 41 of the Group Litigation Order, which allowed the lead solicitors to take reasonable steps to publicise the GLO in a prescribed form, and in principle would be recoverable, but instead were costs which arose from “very substantial media publicity of these proceedings”.

This decision will act as a warning to law firms seeking to capitalise on data privacy group actions and give them pause for thought as to whether the investment put into the marketing of such claims is really worth the risk.

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