Prince Harry Legal Defeat Could Push Up Insurance Premiums, Experts Warn

Prince Harry’s recent High Court defeat against the publisher of the Daily Mail could cause legal insurance premiums to soar across the industry, leaving high-profile figures facing heavy uninsured bills, according to legal and insurance experts.

The Duke of Sussex, along with six other prominent public figures, lost a privacy lawsuit brought in 2022 against Associated Newspapers over alleged privacy breaches spanning more than 30 years. Among the plaintiffs were Sir Elton John alongside his husband David Furnish, actresses Sadie Frost and Liz Hurley, activist Doreen Lawrence, alongside former Liberal Democrat MP Simon Hughes.

To protect against the financial risks of the litigation, the group had purchased After the Event (ATE) insurance. This specialized policy covers legal costs tied to lawsuits, and the claimants had secured coverage for £16.2m of Associated Newspapers’ costs if they lost the privacy case.

However, a High Court costs ruling on Friday opened the door for the Daily Mail publisher to seek the entire £34.5m in expenses. Judge Matthew Nicklin decided against placing a ceiling on the recoverable costs, despite noting that the scale of the publisher’s bill appeared excessive.

Judge Nicklin stated in his ruling that the claimed amounts gave rise to real concerns regarding whether all expenses were reasonably incurred and reasonable in amount. Even with those reservations, the celebrity claimants were ordered to pay an interim costs bill of £9.5m to Associated Newspapers by 4 p.m. on Friday 28th August—a figure nearly £5m higher than the amount originally budgeted by the court. Furthermore, Nick McDonnell, a director and costs lawyer at Kain Knight, noted that the judge ordered costs to be assessed on an indemnity basis, a favorable outcome for the publisher that could elevate the final recovery amount.

Implications for ATE Insurance and Group Litigation

According to McDonnell, insurers may now scrutinize future applications much more closely. McDonnell informed City AM that this verdict might lead ATE underwriters to give greater consideration to the danger of an indemnity costs order when evaluating policies, particularly in intricate multi-party lawsuits where such penalties can expand financial liability well past a rival’s sanctioned budget. McDonnell added that the outcome could drive up insurance pricing. Should that perceived hazard result in higher coverage limits or costlier rates for the extra liability, policy prices will likely climb, creating broader concerns about whether sufficient ATE protection remains accessible for plaintiffs and, ultimately, if certain otherwise promising group actions become harder to initiate. Rocco Pirozzolo, managing director and underwriting director at City insurance firm Harbour Underwriting, shared a similar perspective on market dynamics following the ruling. Pirozzolo told City AM the decision will give pause for thought for the market as once cover is in place, the insurer has no control over how a case is run, adding that pricing should perhaps be increased to reflect the risk of indemnity costs being ordered.

Underwriting Standards and Tougher Questions

Typically, when underwriters evaluate an application for ATE insurance, they assess the legal merits and the statistical likelihood of victory. Most insurance providers require an independent assessment showing at least a 60 percent chance of winning the lawsuit, alongside a formal written opinion from the claimants’ barrister.

Following the High Court ruling, crisis and reputation consultant Mark Borkowski told City AM that insurers will start asking much harder questions during the vetting process for major group actions. With £19m left uninsured for Prince Harry and his co-claimants, the case serves as a stark warning to litigants about the financial exposure of adverse costs orders in high-stakes British court battles.