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CFAs in Media Cases: reasons to be cheerful? – Steven Heffer

SuccessIs it possible that the government has at last taken on board the concerns expressed by the Law Society, Bar Council, Lawyers for Media Standards and many others made in numerous papers and articles about proposed reforms over the past two years, despite having pushed through the LASPO Act without amendment?

On 12 December 2012 the under Secretary of State for Justice, Mrs Helen Grant, issued a ministerial statement announcing that the provisions of the LASPO Act which would remove the recoverability of success fees and insurance premiums will not come into force for defamation and privacy claims until a “new regime of costs protection” has been introduced for these proceedings.  The written ministerial statement can be viewed here [pdf].

The statement is to be welcomed.  The issue has been the subject of much debate over a number of years and Lord Justice Leveson recommended in his Inquiry into the Culture Practices and Ethics of the Press  that costs protection should be extended to defamation and privacy claims.  This would mean that individuals of modest means should not be in the position of bringing or defending actions without some form of protection against having to pay the other side’s costs if the case is lost.  The Government has accepted this recommendation hence the announcement.

These arguments were all put during the passage of the Act, but rejected, so it seems that we may have Lord Justice Leveson to thank for this change of heart. The Prime Minister had indicated on more than one occasion that victims of the press would have some form of protection but until this announcement it was not possible to envisage how that might be achieved.

The Government has asked the Civil Justice Council (“CJC”) for advice by the end of March 2013 on this issue.  The reforms in part 2 of the LASPO act generally come into effect on 1 April 2013.  This “short delay” in implementation will mean the protection which currently exists through recoverable insurance premiums will continue until a new regime of costs protection can be implemented through changes to the Civil Procedure Rules.

The availability of Conditional Fee Agreements (“CFAs”) for actions in defamation has long been the subject of controversy.  It has been argued that defendants in actions for defamation could be perceived to be under a corrosive financial risk, as they could be liable for success fees on the top of base costs.  It has been argued that this inhibits the freedom of expression of defendants. However the contrary argument was that the reforms in the LASPO Act would render the CFA model almost obsolete as lawyers will be reluctant to take on defamation cases on a CFA basis if they are no longer commercially viable.

The Government claimed that there was no intention to remove access to CFAs of either claimants or defendants but to create a better balance between the interests  of claimants and defendants.  But the Government has now acknowledged the dilemma facing less wealthy claimants and defendants, who may be put off from pursuing or defending reasonable actions because of the risk of having to pay the other side’s legal costs if their case fails.  The Government has therefore said that it will further consider the issue of costs protection.

Recently the Joint Committee on Human Rights (JCHR) stated

“we are concerned that this change to CFAs and ATE may inhibit access to justice for those claimants and defendants who are middle income, but not eligible for legal aid.  We are particularly concerned that the reforms in the LASPO Act 2012 do not tackle this issue, as the present rules on CFAs may prevent claimants and defendants of modest means from accessing the courts, a particularly pertinent concern when the action is one of defamation.

 We note the Government’s ongoing effort to address this particular issue, and welcome its ongoing consideration of the “costs protection” issue.  We remind the Government that a solution to the difficulty faced by the “middle income, not eligible for legal aid” claimants and defendants is necessary if defamation reform is to be effective in practice, so that all persons, regardless of financial means, can access justice in defamation proceedings”.

This statement from the JCHR is also to be welcomed and these developments appear to mark progress in the long fight to ensure that access to justice remains available to claimants in defamation and privacy claims.

This has all come very late in the day and it appears to be a direct result of the Leveson recommendations that the Government now recognise that costs protection in defamation and privacy claims is a serious issue justifying special provisions. It is unclear ultimately what form this will take and it is to be hoped that lawyers and academics in this field will be able to positively influence the CJC findings. For far too long it seemed that the press lobbying (and unjustified claims of the “chilling effect”) had managed to stifle the real concerns about impact on access to justice.

It remains to be seen whether the initial measure is replaced by some permanent and long term solution following the implementation of the Defamation Act and Lord Justice Leveson’s recommendations and there is still much to be done to ensure the government reaches a proper and evidence based solution to this thorny issue.

Steven Heffer is Chair of Lawyers for Media Standards and Head of Media Sports and Culture at London law firm Collyer Bristow LLP.

1 Comment

  1. Elaine Decoulos

    Well done to all those campaigning for access to justice. It’s unfair and unjust that so much time has to be spent on trying to secure the basic right of access to the courts in the UK. If it was LJ Leveson who got the Govt to move on this, that is very interesting indeed. I was the only one trying to become a Core Participant in The Leveson Inquiry, and denied by his Lordship, who has not had access to justice because of costs. No mention of that in his Report.

    Lets hope someone in the Govt read this:

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