A Federal Court judge has ordered Bruce Lehrmann to pay costs of a higher order than typically seen in defamation cases, but also declared there were “no real winners” in the multi-million-dollar legal battle.
Justice Michael Lee found last month that, on the balance of probabilities, Mr Lehrmann raped Brittany Higgins in Parliament House in 2019, meaning Network Ten and Lisa Wilkinson ultimately won on a substantial truth defence.
Mr Lehrmann has always maintained his innocence.
However, Ten failed in its qualified privilege defence, and the former Liberal staffer was only ordered to pay the usual party/party costs for that part of the trial.
For the majority of the case, Ten was awarded indemnity costs which cover up to 95 per cent of their legal bill — substantially more than what is awarded for party/party, which is only about 65 per cent.
Both parties will return later in May to negotiate what that bill is in this case.
Justice Lee condemned Mr Lehrmann for bringing the case on a “knowingly false premise” and for making his barrister “cross-examine the complainant of sexual assault in two legal proceedings”.
But he also criticised the media giant and Lisa Wilkinson’s credulous conduct as “the major theme” of their broadcast followed what Ms Higgins’s partner, David Sharaz, had “pitched” to the journalist.
The burning questions remaining are, how much does the total bill comes to and what can cash-strapped Channel Ten expect to recover.
What happens if Lehrmann doesn’t have money to pay costs
There are signs the former Liberal staffer doesn’t have the means to cover much of Ten’s costs without a financial backer.
Earlier this week Mr Lehrmann’s lawyer Paul Svilans said his firm — Mark O’Brien Legal — were working on a no-win, no-fee basis and, critically, the former Liberal staffer had no third-party funder.
While that means Mr Lehrmann owes nothing to his lawyers, the costs decision means he still faces a big bill to cover what Channel Ten and Wilkinson have forked out.
Media and communications law expert Peter Bartlett has estimated the total bill of the case could be up to $5 million.
Due to his lack of funds, the struggling media company and Wilkinson may struggle to ever recoup the cost of their defence.
“Which means Network Ten will be out of pocket, and will have to write off all of those costs,” Mr Bartlett said.
“Ten has won, technically, but are out of pocket $5 million or something.”
Mr Bartlett said he wouldn’t be surprised if Ten had to consider “retrenchments” in the future as a result.
He said if Mr Lehrmann cannot pay, his opponents could push for him to be officially declared “bankrupt” — but this would cost them more money on top of the millions they likely won’t recover.
He said it was not uncommon for media companies to receive a statement of claim from someone “who doesn’t have a big pocket” but they are advised to settle to avoid forking out millions on a trial that they may never recoup.
“The defamation space is so outrageously expensive.”
Mr Lehrmann rejected a settlement offer from Channel Ten in August last year.
How the costs decision could affect an appeal
It remains unclear if Mr Lehrmann will seek to appeal Justice Lee’s judgment in the case.
However, last week his barrister David Helvadjian applied for and was granted a two-week extension on the four weeks parties are normally given to prepare and launch an appeal.
Mr Helvadjian told the court the additional time was needed for a team of new lawyers to analyse the trial material, the judgment and potentially mount an appeal.
Mr Bartlett was part of Nine Entertainment’s legal team in the mammoth defamation trial Ben Roberts-Smith lost against newspapers and journalists.
The war veteran launched an appeal and was ordered by the Federal Court to pay almost $1 million in security for costs.
Unlike Mr Lehrmann, former SAS soldier Mr Roberts-Smith had a financial backer in Seven West Media chair Kerry Stokes.
If Mr Lehrmann can’t find a large sum in security, he may not be able to proceed with an appeal.
“There is a reasonably good chance that the court of appeal would order him to pay money into court for security for costs,” Mr Bartlett said.
“He would appear not to have the funds to be able to do that.”
If Mr Lehrmann’s unable to secure the funds or financial support for an appeal, it would likely go “nowhere”, Mr Bartlett said.
What we know about Lehrmann’s no-win, no-fee deal
This week the network was back in court asking for documents about the legal bills run up by Mr Lehrmann during the case.
Justice Lee noted there was a “conditional agreement” that there was “no obligation to pay costs” if the case was unsuccessful.
Mr Bartlett said these types of contracts are often struck in personal injury-type cases and firms that deal on this basis rely on legal bills from the money their clients receive.
“It has not been all that common in the defamation space,” Mr Bartlett said.
He said this is because defamation cases are highly unpredictable, and any lawyer would be taking “a big chance” if they did.
“In defamation cases, it’s very rare that a lawyer would say you have 100 per cent chance of winning this case, there are so many things that can arise.”
The principal from Mr Lehrmann’s firm, Mark O’Brien, is one of the most experienced barristers in the defamation space, and according to Mr Bartlett knows it like “few others”.
“He must have formed a view, that Lehrmann would win.”
Justice Lee asked the parties to submit their estimated legal bills by May 24 ahead of a case management hearing on May 27.
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