The Supreme Court last week dismissed appeals by the Mail, the Mirror, and the Times, who argued that they should not have to pay enhanced costs to successful claimants whose defamation and privacy cases were funded by Conditional Fee Agreements – ‘no win, no fee agreements’.
It had been thought that successful appeals would see the end of CFAs. But by their decision, the Supreme Court Justices have confirmed that CFAs remain a legally valid way for defamation and privacy cases to be funded.
As regular readers will know, for some time I have been a critic of the system which allows the fees of successful claimants’ lawyers to be uplifted by 100%, and for insurance premiums to be recovered from a losing publisher.
On the face of it, yesterday’s decision is a dark day for press and broadcasters, and especially so for the regional press. However, from the press’ perspective, there are at least two reasons to be hopeful – of which more below.
All three claimants (whose cases were funded by CFAs) were successful at trial, and the newspaper defendants were ordered to pay their costs, which included so-called success fees and After-The-Event insurance premiums.
Although the dismissal of the appeals turned very much on the facts of each case, and the Justices were clear in saying that they were not making a final decision on the compatibility of CFAs with Article 10 of the European Convention (freedom of expression), the Court’s decision will nevertheless be seen as a blow to the press’ long running opposition to the recoverability of success fees and ATE insurance premiums.
So why are there grounds to be positive about the judgment?
First, in the two libel appeals, the Justices held that upholding the costs order against them would infringe their Article 10 rights. But despite this, both appeals were dismissed because Court then decided that to deprive the Claimants of their costs retrospectively would involve a greater injustice.
Second, it was interesting that the President of the Court, Lord Neuberger, commented that certain procedural changes apply to defamation and privacy cases, including “more muscular case management by the courts to deal with cases proportionately, costs budgeting and costs management, costs-capping, and new provisions which limit the level of overall recoverable costs to what is proportionate“.
So, for the first time, the UK’s most senior Court has specifically held that CFAs in publishing cases are incompatible with freedom of expression, and in other circumstances, it is reasonable to assume that the appeals would have been decided differently.
This is why I think there are grounds to be positive about the judgment. Any new CFA in a libel case will be susceptible to challenge as a matter of principle and, in light of Lord Neuberger’s comments, before the specialist Cost Judges.
And with due deference to Ian Dury’s famous lyric, there are reasons to be cheerful, after all.