The Court of Appeal last week slammed the “extravagant” fees demanded by law firm Peter Carter-Ruck & Partners in a defamation case against The Daily Telegraph.
The court held that it “cannot be just” for newspapers to be forced to fight cases funded by conditional fee arrangements (CFAs), where they have no chance of recovering from the other side if they win.
This comes just weeks after The Lawyer revealed that national newspapers were putting increasing pressure on Carter-Ruck for what they perceived to be excessive costs in libel actions (The Lawyer, 5 April).
At the time, Carter-Ruck expressed willingness to agree a protocol with all major national newspapers governing the level of success fees it charges on cases funded by CFAs.
The Court of Appeal has now added its voice to those calling for a cap to be imposed on the amount claimants’ law firms can charge defendants who fight libel cases.
In last week’s case, claimant Musa King would not be able to pay the paper’s estimated £400,000 fees under his CFA because he did not have the insurance cover to do so.
The court recommended that an “axe” should be taken to Carter-Ruck’s fees, should they go to a costs assessment.
Carter-Ruck partner Nigel Tait said: “Since the beginning of the CFA scheme we’ve sought insurance for all our cases. We got insurance cover [in the Musa King case] in December 2003, after having made various attempts to do so previously. The premiums are usually large and most people often can’t afford them.”
He added: “We’ve taken on board the Court of Appeal’s criticism, but it wouldn’t be right to discuss it so close to trial [on 8 June].
However, we will be reviewing the handling of the case at its conclusion.”
Musa King is suing The Daily Telegraph for an article suggesting that he had links with al-Qaeda.