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Law Column: No win, no fee – a huge day for journalism

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Last Thursday was a hugely significant day for journalism and freedom of expression, one of the most important for decades, and publishers and journalists alike should be celebrating the successful culmination of a campaign that has been raging for years.

So what happened? Well, the Ministry of Justice announced that on April 6th 2019, section 44 of the Legal Aid, Sentencing and Punishment of Offenders (LASPO) Act 2012, will be commenced in relation to defamation cases.

Yes, I know – you’re thinking that only a lawyer could get excited about something quite so obscure.

But bear with me, and let me explain why publishers and journalists should be celebrating and corks should be popping.

As readers will know, since 1999, individuals who want to sue for libel have been able to enter ‘no win, no fee’ agreements with their lawyers. The idea was that this would encourage access to justice.  The lawyers would do the work, bring the claim, and take the risk of not being paid.

And in return for taking this risk, they would be entitled to apply an uplift to their fees of up to 100% – the so-called “success fee” – to be paid by the losing defendant.

Given that some lawyers, usually based in London and who specialise in libel, charge in the region of £500 per hour (or more), the financial consequence of defending a claim and losing, and having to pay the claimant’s legal costs plus 100%, are obvious.

The industry has been complaining for years about this iniquitous system, principally because of the chilling effect the fear of an adverse costs order had on investigative journalism and freedom of expression more generally.

The most notorious case in which one of my colleagues was involved occurred about a decade ago, when a claimant received £5,000 damages for an admitted libel – and his costs were assessed by the Court at more than £400,000. I don’t think any comment is needed on that outcome.

Anyway, in 2011, the European Court of Human Rights delivered judgment in the case of MGN v. UK, and decided that the obligation for MGN to pay a 100% success fee to the successful claimant was disproportionate, and therefore, the whole ‘no win no fee’ regime was in breach of the publisher’s rights under Article 10 of the European Convention on Human Rights.

The Leveson Report followed in 2012, and Sir Brian made a number of proposals regarding legal costs.

In 2013, to consider how best to respond to these two events, the government issued a consultation paper.

And so it is that more than five years later, the government’s decision has now been announced.

In what looks like a who’s who of media lawyers, more than 40 submissions were sent to the ministry. Representative organisations such as the Media Lawyers Association, the News Media Association, and the Society of Editors also had their say.  I’m guessing that all representatives of publishers made similar submissions.

So, from next April, the burden (and chilling effect) of success fees will be lifted. This means success fees will be non-recoverable (i.e. no longer payable by the losing party!). It may have taken the government more than five years to reach this stage, but at least the Ministry listened and has acted to rectify the huge mistake of permitting success fees in the first place.

We live in an era when the industry is under huge financial pressure, the very future of many titles is under review, and journalists fear for their jobs. To say that last week’s announcement is to be welcomed doesn’t do justice to its significance.

As the football pundits might say: it’s massive.

So I hope you will understand why I began this piece by being so thrilled to hear of the government’s decision – and I hope that you, dear readers, will be too!

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