We have blogged, on a number of occasions, on the last Government’s proposed CFA Amendment Order which was finally dropped on 6 April 2010 after the General Election was called.   It seems likely that the measure will be revived, in some form, by the next government – as there seems to be broad agreement that a 100% success fee is not appropriate in libel cases and that present CFA regime requires some reform.  There is, of course, no agreement between claimant and defendant lawyers as to the appropriate level of success fees and in relation to other proposed reforms.

We mentioned in an earlier post that the measure actually proposed by the Ministry of Justice was opposed by the two judges who responded to the consultation,  Master of the Rolls Lord Neuberger and the Senior Costs Judge, Master Hurst.  This was clear from the summary of consultation responses produced by the MoJ.

Lord Neuberger’s response is available on the Judiciary Website.  He expresses the strong view the the problem of costs in defamation claims supported by CFAs should be treated “holistically” as proposed in Sir Rupert Jackson’s report.  He goes on to say

In our view, it is not right to single out one particular category of defendants, who have ready access to the media, for preferential treatment. Indeed it may be thought unfair if libel claimants are placed in a distinctly less advantageous position than all other claimants in civil litigation. Furthermore, we believe that any solution to the present problem must comprise a balanced package of measures, in order to control costs whilst promoting access to justice. In our view, a simple reduction of success fees in libel cases by 90% is not such a balanced package.

We have now obtained a copy of the response by Master Hurst – which makes interesting reading.  He notes that

“There has been intense lobbying of Parliament by publishers (a very powerful body), and the Lord Chancellor has been persuaded to take immediate steps to control costs in publication proceedings.    It has to be accepted, however, that the pressing reasons put forward by the publishers as to the amount of costs which they have to pay in the event of losing an action, apply equally in the field of clinical negligence, and indeed across the whole of civil litigation”.

He notes that there is “a clear and pressing need to control the costs of litigation funded by CFAs“, but goes on to say that “control should not be limited purely to publication proceedings“.  He goes on to say that the proposed figure of 10% maximum success fee “appears to be entirely arbitrary, and is not backed up by any sort of research“.  He notes that

The courts have for some time been advocating staged success fees, and it is therefore suggested that both the staging and percentages set out in CPR Part 45 Section V (employers liability disease) should be adopted as the interim measure sought by the Government.

The scheme proposed is complex but, in its simplest form, this involves a 100% success fee if the case proceeds to trial and, otherwise, a success fee limited to 27.5%.

Master Hurst has considerable practical experience of dealing with CFAs and his views should be given very serious consideration.