Media lawyers have long been under attack for apparently building up massive legal bills. The high cost of litigation in defamation proceedings, campaigners says, is having a chilling effect on freedom of expression.
High profile cases such as British Chiropractors Association v Singh have helped highlight the inefficiencies of the libel laws in the UK (1 April).
Yesterday (18 January) the European Court of Human Rights quashed the right of the claimant to thrust disproportionate success fee charges on their opponent should they win the case (18 January).
The outcome of the long-running case has been welcomed as a victory by freedom of expression campaigners and an endorsement of the proposed reforms to cut litigation fees put forward by Lord Justice Jackson last year.
The case, Mirror Group Newspapers (MGN) v United Kingdom, has its roots in the landmark invasion of privacy case brought by supermodel Naomi Campbell against the newspaper in 2004. Schillings senior partner Keith Schilling represented Campbell in the case.
It came after the newspaper published details and photographs of Campbell’s visits to a treatment centre for drug addiction. The House of Lords (HOL) upheld her claim and awarded her just £3,500 damages. At the HOL Schillings had agreed to act for Campbell on a conditional fee agreement basis, meaning that it could claim an uplift if her case was successful. The costs claim in the HOL amounted to £850,000 and included a success fee worth £365,000.
The newspaper group instructed Davenport Lyons partner Kevin Bays to appeal the costs order in an effort to have it overturned. The HOL rejected the bid and the case went to the ECHR.
Counsel opinion was sought from Blackstone Chambers David Pannick QC, who, coincidentally was in the ECHR last week representing Max Mosely in his privacy case against News International, and Keir Starmer QC, who was later appointed as Director of Public Prosecutions (DPP). The newspaper argued that such a disproportionate success fee should be treated as a violation of article 10 of the European Convention on Human Rights, the right to freedom of expression.
The issue was whether there was a fair balance between freedom of expression under Article 10 and the individual’s right of access to court under Article 6.
The court upheld the claim stating that the system was indeed a breach of MGN’s right to expression. The court also noted that the Ministry of Justice is in the middle of a consultation on reforming the system.
It concluded: “The depth and nature of the flaws in the system, […], are such that the court can conclude that the impugned scheme exceeded even the broad margin of appreciation to be accorded to the state in respect of general measures pursuing social and economic interest.”
The system was fundamentally flawed, it said, because of a “lack of focus” and “lack of any qualifying requirements for claimants”.
While the ruling recognises that reforms are on the way, the days of the 100 per cent uplift in defamation cases are numbered.
Beachcroft partner Andrew Parker comments: “Implicitly the Court’s decision is a criticism of the logic behind success fee recovery in just that situation. The stronger the defence, the easier the justification under the current system for a high success fee and a high ATE premium. Thus the defendant with a strong defence faces the highest risk of disproportionate costs”
Jackson LJ recommends success fees are capped at 10 per cent in defamation and personal injury cases. The ECHR ruling will put added pressure on the MOJ to implement the reforms as a matter of urgency.