Ukip has been edged closer to financial ruin after a judge ruled the party must contribute towards a £660,000 legal bill following a defamation action brought against one of its MEPs by three Labour MPs.
Last year, Jane Collins was successfully sued by Sarah Champion, Sir Kevin Barron and John Healey, whom she had accused in 2014 of ignoring child sex abuse in Rotherham.
At the time, Mr Justice Warby said Collins, the Ukip MEP for Yorkshire and the Humber, should pay £54,000 in damages to each MP as well as paying their costs, with an interim payment of £120,000.
Estimates suggest Ukip will have to pay at least £200,000 of a legal bill which stood at £660,000 before a further hearing on Thursday. None of the costs have so far been paid.
Ukip’s financial troubles are well documented, with Henry Bolton, its embattled leader, warning recently that a new leadership election could be financially “unviable” and finish the party were he forced out.
Last week John Bickley, the Ukip treasurer, wrote that the party had been “living hand to mouth since 2015” and that its finances were now under great pressure. Ukip’s only full-time paid members of staff, its spokesman, Gawain Towler, is expected to depart in the next fortnight. Bolton does not receive a salary.
The three Labour MPs had made the case that Ukip should bear the costs itself because it had provided financial support to Collins.
On Thursday, the judge found the party had initially played just a supportive role, but said it then took a “deliberate, informed and calculated decision, for reasons of party political advantage, to ensure that the case was not settled before the general election”.
The judge said that may have meant the party prevented a swifter settlement of the case, meaning legal costs had risen significantly. Ukip must now pay the costs accrued between March 2015 and June 2015, and costs from the assessment hearing, the judge ruled.
“In my judgment, it very probably did thereby prevent a settlement that it had been advised should be made and which would otherwise have occurred quite swiftly,” the judge said. “The likelihood is that, but for its role, the case would have settled by 20 March 2015.”
Healey, MP for Wentworth and Dearne, said the delay had hugely increased the legal costs. “This judgment confirms Ukip played the court case we brought against Jane Collins for political advantage,” he said.
“At the highest level Ukip knew Jane Collins’ case was ‘hopeless’ but blocked any settlement before the 2015 election because they believed it would win them votes. This delayed the full vindication we finally won, and hugely increased the legal costs.
“Ukip deserve to pay a substantial share of the legal bill, as their action behind the scenes caused the costs to soar.”
The final figure will be determined by a judge through a detailed assessment of costs but Ukip is expected to challenge whatever sum is submitted.
Thursday’s hearing and judgment concerns legal costs only; it has no connection to the judgment ordering Collins to pay £54,000 in damages to each of the three MPs, which remains outstanding.
A Ukip spokesman said: “While we are disappointed with the decision it is clear that Ukip are being treated as a party driven by goodwill and we believe that will be reflected in any final decision on costs.”
The party’s finances are thought to be in perilous circumstances before an extraordinary general meeting which may result in a vote of no confidence in Bolton, who is under fire after his former partner apparently sent racist messages about Prince Harry’s fiancee, Meghan Markle.
Party sources have previously said Ukip may be unable to afford a leadership contest if Bolton is ousted.
