The conditional fee agreement (CFA) regime, in which the loser is liable for an uplift on their opponent’s legal fees, breaches European rules on human rights, the European Court of Human Rights (EHCR) ruled today.
Mirror Group Newspapers, the parent company of the Daily Mirror, went to the European Court after it was ordered to pay legal costs built up by supermodel Naomi Campbell when she sued the newspaper for breach of privacy.
That landmark case, in which the model was represented by Schillings partner Keith Schilling, was only done on a CFA at the House of Lords level, meaning Schillings charged MGN a success fee uplift of £280,000 as part of more than £1m of costs.
In 2005 the House of Lords threw out the appeal against the success fee, silencing calls for a means tested CFA.
Davenport Lyons partner Kevin Bays then took the case to the European court for the newspaper, while counsel opinion was sought from Blackstone Chambers’ David Pannick QC and director of public prosecutions Keir Starmer QC, who was then at Doughty Street Chambers.
The ECHR ruled that the £1m costs the paper had to pay, which was partly lawyers’ ’success fees’, were disproportionate. The fee, it said, violated the right to freedom of expression.
In 2004, the House of Lords upheld Campbell’s libel case against the Daily Mirror by a margin of three judges to two, and thereby reinstated the High Court’s earlier decision to award £3,500 in damages to the supermodel after the Daily Mirror printed photographs of her leaving a Narcotics Anonymous (NA) meeting (6 May 2004).