The Government has dropped its proposed CFA Amendment Order, following the calling of the General Election.  Leader of the House Harriet Harman is reported to have told Labour MP Tom Watson yesterday that “You can be reassured following your reading of the order paper that that will not be moved today. So it might be on the order paper now but it’s not going anywhere.”

The Ministry of Justice has today confirmed that there will be no CFA reform before the election.   The story is reported by the Press Gazette today under the headline “No win, no fee libel reform shelved by election”.  As we reported last week, the Order was defeated in a House of Commons Committee as a result of the votes of a number of Labour rebels.

In a post on “Liberal Conspiracy” Tom Watson explained why he voted against the Draft Order.  He has, as a result, come in for a good deal of criticism on the blogosphere by “libel reformers” who mistakenly equate all CFAs with unreasonable fetters on freedom of expression (see for example, “Jack of Kent’s” post here).

As readers of this blog will know, we are opposed to the CFA Amendment Order in its present form – not because we support the current system in general and 100% success fees in particular – but because the “10%” figure is not evidence based.  The Government was unable to explain its provenance – it appears to have been “plucked out of the air” and, using the standard figures, assumes that 95% of all libel actions are successful.

The measure was opposed by all the legal professional bodies and by the judges who responded to the consultation. In a letter to the House of Lords Merits Committee – appended to its report – Professor Moorhead of Cardiff University who had been commissioned by the Government to look at the feasibility of research into the area said that he was aware of no objective evidence base from which the Government could draw its calculations for the 10% fee”.

There is now a period for reflection which should, we think, be used to gather the evidence necessary to introduce a fair and balanced reform.  On the assumption that CFAs are necessary to preserve access to justice then it seems to us that:

  • The maximum success fee should be set at such a level as preserves “costs neutrality” – it should properly reflect the actual risk taken by CFA lawyers.  Overall a maximum of 100% seems to be too high whereas 10% is too low – the proper figure is somewhere inbetween.
  • The assessment of risk and the hourly rates charged should be rigorously policed by the courts.
  • Other “balancing measures” – such as those proposed by Sir Rupert Jackson in his report should be considered.

We hope that there can be an informed debate on the issues surrounding CFAs in order to produce a proposal which preserves access to justice while avoiding oppressive costs orders against the media and others.  We invite contributions from our readers on this issue.