A new leaf from the Tobacco Case

John Pickering believes that the outcome of the “Tobacco Case' has proved to be a victory for both lawyers and the media. John Pickering is head of Irwin Mitchell's PI department.

The “Tobacco Case”, as it has become known, has attracted a great deal of media attention, and none more so than on 12 February 1998 when it entered the Court of Appeal.

The plaintiffs in the action sought to bring a claim for damages against the three named tobacco companies in respect of lung cancer which they allege was caused by smoking cigarettes.

All plaintiffs involved in the litigation pursued their cases under conditional fee agreements. The case came before Mr Justice Popplewell on 10 October 1997 on various interlocutory matters. There were two main issues which developed from the hearing.

The first concerned a desire on the part of the plaintiffs' advisers to seek a debarring order, preventing the defendants from seeking an order for costs against the legal advisers, as a result of their pursuit of the cases under Conditional Fee Agreements (CFAs).

The second point concerned a direction made by the judge to the effect that the parties and their advisers must not make any comments to the media in relation to the litigation without the leave of the court the so called “gagging order”.

The two issues were independent and were treated as such by the Court of Appeal.

The plaintiffs had sought a debarring order because they were concerned that in the event the litigation was pursued and ultimately lost, the defendants may seek an order for costs directly against the legal advisers, purely on the basis of the legal advisers having pursued litigation under the terms of conditional fee agreements.

The defendants had sought disclosure of the CFAs (which had been refused) and had made it clear both in correspondence and in their submissions to court, that they reserved their rights to seek whatever orders they thought appropriate against the legal representatives including, implicitly, an order because of the conditional fee status of the case.

Both Irwin Mitchell and Leigh Day & Co which represented the plaintiffs felt there was the potential to be exposed to special risk of costs liability simply for taking the case on a conditional fee arrangement.

Both firms felt strongly that no such liability ought to exist arguing that the will of Parliament in bringing conditional fees into force would be effectively undermined if such a liability were to be allowed, and sought reassurance from the court.

The judgment of the Court of Appeal was given by Master of the Rolls, Lord Woolf. The court had reviewed all the relevant authorities and particularly the background to coming into force of s58 of the Courts and Legal Services Act 1990.

The court took the view that provided the statutory requirements as to the form and content of the conditional fee agreement were complied with that is, the statutory requirement set out in the Conditional Fee Agreements Regulations 1995, then CFAs will be valid and enforceable by the legal advisers against a client.

Further, Lord Woolf stated: “except that a CFA enables solicitors and counsel to enter into an agreement which they would not otherwise be able to make, the existence of a CFA does not alter the relationship between the legal adviser and his client.”

The court went on to say: “There is no reason why the circumstances in which a lawyer, acting under a CFA, can be made personally liable for the costs of a party other than his client should differ from those in which a lawyer who is not acting under a CFA would be so liable.

“Any suggestion by the defendants' lawyers, and any concern of the plaintiffs' lawyers, that the position of the plaintiffs' lawyers is different from that of any other legal adviser is misconceived.

“The existence of a CFA should make a legal advisers' position as a matter of law no worse, so far as being ordered to pay costs is concerned, than it would be if there was no CFA. This is unless, of course, the CFA is outside the statutory protection.”

In essence, the Court of Appeal provided the necessary reassurance to the plaintiffs' legal advisers.

The position on the litigation is just as it is on any other case and there is no special liability which arises simply because the matter is conducted under a CFA.

The court ruled that there was no need for the Debarring Order which had been sought, since no such liability could arise.

The decision is of considerable importance to those conducting litigation under conditional fee agreements, particularly those who do not have insurance cover or those where the level of insurance cover may be inadequate to meet the full costs.

This is clearly relevant in the context of multi-party cases and “heavyweight” personal injury cases.

Further, the Government must also have breathed a sigh of relief, bearing in mind the Lord Chancellor's stated intention to extend the use of CFAs.

The Debarring Order aspect of the appeal probably attracted less interest but is nevertheless of particular importance in clarifying the law relating to media comment and the reporting of hearings in chambers.

The plaintiffs were naturally concerned that Mr Justice Popplewell had imposed the gagging order and the effect of that had already been to give rise to misleading press reporting of the position on the litigation. It was submitted on behalf of the plaintiffs that no gag should be imposed and indeed that the judge did not have power to make such an order.

The court took the opportunity to fully review the position and gave a five-point guide to the approach to the reporting of hearings in chambers: v The public has no right to attend hearings in chambers because of the nature of the work transacted in chambers and because of the practical restrictions on space. However, if requested, permission should be granted to attend when this may be practical.

Proceedings in chambers are not confidential or secret and information about what occurs in chambers or about the judgment or order pronounced can and, in the case of any judgment or order, should be made available to the public when requested.

If members of the public who seek to attend cannot be accommodated, then the judge should consider adjourning to deal with the matter in open court or alternatively, should consider allowing a representative of the press or public to attend the hearing.

To disclose what occurs in chambers does not constitute a breach of confidence or amount to contempt, as long as any comment which is made does not substantially prejudice the administration of justice.

The above points do not apply to the exceptional situations identified in s12(1) of the 1960 Administration of Justice Act.

The above rules are clearly sensible and clarify the position. This means that, particularly in cases of public interest such as the Tobacco Case, there will be proper access to information and to the relevant orders so that accurate reporting can take place.

The decision of the Court of Appeal on the above two points was therefore of crucial importance to the plaintiffs and their legal advisers.

As a result of that decision, the legal advisers were able to confirm that they could continue with the litigation.

Further, the ability of the press to properly report on the case is now unfettered and that is clearly in the public interest.