Ready, willing and libel

Are CFAs holding the media to ransom? Peter Carter-Ruck and
Partner’s Nigel Tait doesn’t think so.

Nigel Tait should be a worried man. A partner at top libel firm Peter Carter-Ruck and Partners, he has been in the vanguard of taking on defamation actions against media organisations on a conditional fee basis, otherwise known as ‘no-win, no-fee’.

This has been a lucrative industry for Carter-Ruck, the firm which developed the model, and more recently for Tait himself. He claims to be now doing most of the conditional fee arrangement (CFA)-funded work at the firm.

But the position of Tait’s practice is looking precarious. In June, the Government published a consultation paper on the future of CFAs. Most of the country’s top media organisations are lobbying the Government for an end to the success fees that CFA-funded libel actions rely on. This is because claimant media lawyers who win CFA-funded cases are allowed to charge the media up to a 100 per cent success fee. It doubles the costs the loser must pay and, says the media, puts them considerably out of pocket.

But if the man who now takes the most CFA-funded libel cases at Carter-Ruck – and probably the industry – is worried, he is doing a good job of disguising it.

With a permanent cheeky grin, boyish curly hair and sparkling eyes, meeting Tait is like stumbling across a grown-up, slimmed-down Billy Bunter packing a law degree. As we run through the media’s many arguments against his practice, his smile gets brighter, his eyes sparkle all the more and, like his fictional alter-ego explaining his way out of a scrape, he serves up some compelling arguments with lashings of good humour.

The powerful media lobby, comprising the BBC, ITN, Associated Newspapers, Guardian Newspapers, Independent News & Media, MGN and Times Newspapers, wants to stop CFAs because if they lose a case then a claimant lawyer’s costs, including their success fee, can reach northwards of a staggering £700 an hour. Tait, though, thinks there is no alternative.

“I have to charge a success fee to cover the risk of the cases I lose. Otherwise I couldn’t do CFAs and there’d be no access to justice,”he says simply, flashing that smile. “Because of CFAs we can now act for nurses, doctors, gardeners and teachers. We’re now threatened for having the temerity to act for people.”

The media organisations lobbying the Government are complaining that the CFA system does not provide justice. As defendants, a combined fear of losing and of paying a 100 per cent success fee as well as a claimant’s costs makes them settle cases they should take to court, they say. Describing a CFA-funded libel action that Carter-Ruck is bringing against The Daily Telegraph on behalf of political activist Adam Musa King, the newspaper’s QC James Price labelled it “the ransom factor”.

Tait responds with a characteristic giggle when I moot the idea that he and his firm are holding media organisations to “ransom”.

“I think The Telegraph gets two or three writs a year,” he says. “Their December 2001 accounts showed net assets of £277m, and gross profit before tax was £80m.” But the ‘ransom factor’ does appear to be a real one, especially given that Tait admits that 90-95 per cent of his cases settle. These cases are mostly funded by CFAs and primarily involve a media organisation shelling out a substantial success fee on top of his costs.

“The ones that settle are, of course, in my clients’ favour, and the ones we lose cost us a fortune,” he says.

He has a point. In 2001 Carter-Ruck lost more than £1m in fees losing a libel case, the majority of which was funded by a CFA, for accountant Stuart Condliffe against Private Eye. The case was discontinued after six weeks and Private Eye was awarded £100,000.

That loss is set against another case later that year, when the firm won a CFA-funded libel case against ITN for surgeon Joe Rahamim. The firm achieved damages, £500,000 in costs and a 100 per cent success fee, trousering a total of £1m from the unfortunate broadcaster.

The Rahamim case, Tait says, is an example of media organisations bringing their CFA-related malaise upon themselves. ITN fought the case for two years before settling the third day in court. In his experience, Tait says his firm is not holding media organisations to ransom. “The reality with newspapers is that they fight tooth and nail over almost every case,” he says. “They like complaining about us, but the real truth is that newspapers always fight.”

The CFA practice at Carter-Ruck was not originally developed by Tait but by his partner Alasdair Pepper. Tait’s practice now, though, is almost entirely composed of CFA-funded cases.

While the model is arguably a good one for ordinary folk with a defamation claim, it is interesting that the founder of Tait’s firm, the now-retired but still legendary libel lawyer Peter Carter-Ruck, was never fond of the idea.

“Being blunt, I think the CFA model is wrong because it gives the lawyer an incentive to pursue maximum damages when this is not in the best interest of the client,” says Peter Carter-Ruck, pointing out that the client may not win high damages but their lawyer may not care, as any successful result means they can recover high costs.

Tait is said to have been seen as Peter Carter-Ruck’s prodigal son when they were both at the firm, but the pair are no longer in regular contact. Notwithstanding any disagreements he has had with his former partners, the grandfather of libel law is incredibly complimentary about Tait. “He’s a very good lawyer,” he enthuses. “He’s intelligent and he’s got some quite remarkable results. Its rather presumptous of me to say he’s following in my footsteps, but some people think that.”

So, if the outcome of the Government CFA review does pull the rug from under Tait’s feet, he is unlikely to be out of a job.

“I’ll always refer cases to Nigel because I believe he’s quite simply one of the best libel lawyers in the industry,” comments one former colleague.

Because of his geniality, even Fleet Street lawyers are fond of Tait. “Tait is really the name in CFA-funded libel cases at the moment, and this should make me dislike him, but I like dealing with him,” says one newspaper lawyer. “He’s nice, and most importantly he knows when to laugh at himself.”

The CFA stand-off continues, however, with neither Tait and his firm nor the media knowing how to resolve it.

“People can moan all they like about success fees and I don’t have a problem with that,” says Tait. “The problem I have is people are complaining about them without putting forward an alternative model.”

Tait does not seem to want to examine an alternative model. Carter-Ruck’s defamation rival Schillings recently took on CFA-funded libel actions for wealthy celebrities Sara Cox and Naomi Campbell. I question whether the CFA regime should be changed so that courts have to decide whether the claimant needs to use a CFA. Tait dismisses this outright.

“This seems to be frontloading costs. To me, everything you have suggested just drives up costs,” he says. Oh well, that’s that then.

According to Tait, Carter-Ruck derives around 30 per cent of its income from CFA-funded libel work. So what is the future if the media gets its way?

“There’s always got to be libel work, otherwise we might as well switch off the lights and leave the country,” he says. “The pendulum’s swung so far in favour of defendants now that it’s very hard work. But people will always want to protect their reputation.”

And that, in a nutshell, is why Tait does not seem worried. If the Government does away with success fees, then libel firms will not be able to take on poorer claimants using CFAs. And then, as he says, they will probably have to switch off the lights.
Nigel Tait
Peter Carter-Ruck and Partners