Associated Newspapers pans libel charge 'lottery'

Associated Newspapers head of legal Harvey Kass has hit out at the "postcode lottery" enabling niche City firms to charge costs equal to the magic circle in undertaking libel cases on conditional fee arrangements (CFAs).

Kass railed: "The world's gone mad when the cost of defending one article can equal the annual salaries of over 100 journalists - enough to wipe out many publishers."

He outlined the inequality of the postcode system, which allows a firm with an EC postcode to charge up to £359 an hour to bring a libel claim, while a firm just minutes away in WC1 can charge only £276 an hour. This means that firms on opposite sides of Chancery Lane will charge completely different rates.

In particular, Kass highlighted the example of libel boutique Carter-Ruck, based in EC4, which handles a number of cases on a CFA basis, often with a 100 per cent success fee uplift.

He also pointed out that Schillings, which is based in Soho, has submitted a costs bill of £594,000 in relation to Naomi Campbell's House of Lords hearing over breach of privacy, where she won £3,500.

Kass is calling on fellow media organisations to join Associated Newspapers in investigating a fixed-costs regime, such as those used in France and Germany, restricting damages while balancing access to justice with freedom of expression.

In both countries, the winners of a libel case have a proportion of their fees paid by the losing party and costs awards reach a maximum of €20,000 (£13,500).

This is far lower than the bills in England, which often rise into the millions. In a recent case against Associated Newspapers, Carter-Ruck estimated that its costs would be £3.3m. Luckily for the publisher, the claim was unsuccessful.