New measures announced to curb defamation fees

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by HoldtheFrontPage Staff Published 24 Sep 2009

Key changes aimed at tackling excessive legal fees in defamation cases are due to come into force from next week.

The government has today announced the first steps in response to its ‘Controlling Costs in Defamation Proceedings’ consultation between the Civil Procedure Rules Committee and the media, legal profession, insurance industry and judiciary.

The response sets out three key measures aimed at making libel costs more proportionate and reasonable from 1 October:

If a complainant has taken out ‘After the Event’ (ATE) insurance, they will be required to give early notice to a defendant in a defamation case. ATE insurance is used by complainants to cover their backs should they lose a libel case and be left with large legal bills to pay.

Should a newspaper or publication lose a case, they would have to pay a complainant’s ATE insurance premiums, as well as court costs and both sides’ legal fees.

A 42-day ‘cooling off period’ will be introduced. This means that, if a defendant admits liability and agrees to an out-of-court settlement within 42 days, the complainant’s ATE insurance premiums won’t be payable by the defendant.

A pilot scheme related to the budgets for libel cases is to be rolled out nationwide. Judges presiding over defamation cases keep a rolling tally of a case’s costs and can make recommendations should they begin to spiral.

HTFP understands that further announcements regarding the payment of success fees by defendants to complainants are expected from the Ministry of Justice in due course.

It is hoped that these and any subsequent measures will go towards helping local and regional newspapers with investigative journalism and reduce the fear of being landed with very expensive writs for defamation which often end up being settled out of court.

Justice Secretary Jack Straw said: “Freedom of expression and investigative journalism are fundamental protections to the democracy of this country, of which we are rightly proud and the Government is working hard to protect.

“Spiralling costs and disproportionate legal fees are too often a feature of defamation proceedings, skewing justice as defendants choose to settle unwarranted claims rather than face huge libel costs.

“After the Event insurance premiums, a common accompaniment to ‘no-win, no-fee’ civil proceedings, coupled with generous success fees, can make libel cases difficult to fight for some defendants, particularly regional media organisations.

“That is why the government is taking action to ensure that, where ATE insurance is taken out, defendants are notified as early as possible, and given the opportunity to reach a settlement without being liable for the insurance premiums.

“As recommended by the CPRC, publication proceedings will also be part of a mandatory costs budgeting pilot, with judges scrutinising costs as cases progress to ensure that they are proportionate and within the agreed budget.

“But these are only the first steps. We will be watching the pilot carefully and actively considering whether further measures are needed to control costs in this area.”

Comments

Jp Worker (24/09/2009 12:44:34)
Is it a coincidence that changes to defamation policies are coming about at the same time Johnston Press – in its consistent ‘wisdom’ – is preparing to cull subs. Sorry, I mean introduce an “exciting new system to improve newsrooms”.

Chris Youett, Esq, (25/09/2009 09:26:02)
It still fails to address the main problem with Defamation: it is only a law for the very rich. Restricting ordinary damages to £5K and sending all such cases to the District Judge in the County Court would achieve far, far more. This would end most cricket score damages and costs as well as openning up the law to most ordinary people.

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