Costs Protection Proposals: will they encourage “vexatious claims”?

9 11 2013

WigginOn 4 November 2013, defendant media law firm Wiggin LLP put out a press release entitled “Government proposals could encourage vexatious libel claims“.  This referred to a public opinion survey commissioned by the firm from ComRes which found that a quarter of people who said they would not consider taking legal action if they were defamed online, said they would ‘have a go’ if the cost barrier was removed. 

In fact, the survey says nothing at all about “vexatious claims” and provides no evidence for the contention that costs protection will encourage them.

This press release was reported, with varying accuracy, in a number of places.  The Press Gazette report was entitled “Government proposal to protect poor from libel costs could lead to increase in claims, lawyers warn“, the Financial Times had “Reducing costs of UK libel actions could cause wave of litigation”  with the Law Society Gazette changing “could” to “would”, with “Costs reform ‘will encourage “have a go” libel culture’”.  The transformation of Wiggin’s cautious “could” to “will” is difficult to undertand.

Are these concerns actually supported by the ComRes survey?  The full results are available on the ComRes website [pdf].   These were the questions and the answers:

Q.1 If someone posted an offensive comment about you online (e.g. on Facebook, Twitter or a newspaper discussion board), and they refused to remove it, would you consider taking legal action or not?  

Yes – 39%; No – 32%;  Don’t know – 29%

Q.2 Were you aware that if you took legal action against someone who posted an offensive comment about you online (e.g. on Facebook,
Twitter or a newspaper discussion board) and lost, that you might have to pay your own legal costs and the legal costs of the other party?

Yes – 59%; No – 41%

Q.3 If you did not have to pay the legal costs of the other party in the event that you brought a claim and lost, would you then be more
or less inclined to consider taking action if someone had posted an offensive comment about you online (e.g. on Facebook, Twitter or a
newspaper discussion board), or would it make no difference to you?

I would be more likely to consider it – 47%

It would make no difference to me – 45%

I would be less likely to consider it – 7%

Q.4 Currently, if a person brings a claim against another party (for example if they feel someone has posted an offensive comment about
them online, e.g. on Facebook, Twitter or a newspaper discussion board) and loses, they may have to pay the legal fees of both parties.
Which of the following statements, if any, comes closest to your view?

I think that this is fair – 36%

I do not think that this is fair – 40%

Don’t know – 23%

It is difficult to draw any clear conclusions from these questions and the answers given.

First, the questions do not relate to claims against the media but to claims against a private individual who had “posted an offensive comment”.  It seems likely that respondents would assume that such individuals had similar means to themselves and would address questions of costs accordingly.  The answers to question 4 – about the “fairness” of the current regime – must be seen in this light.  If the questions had concerned defamatory allegations in newspapers it seems likely that the answers would have been very different.

Second, somewhat curiously, the questions do not directly relate to any known type of legal claim: an “offensive comment” may not be defamatory (it may be offensive because it is abusive) and is unlikely to be an invasion of privacy. A single offensive comment would not be harassment.  In any event, most people’s answer to question 1 would depend on how offensive the comments were and how many were made. It seems unlikely that many people would consider legal action over a single offensive comment.

Third, although 47% of respondents say that they would be “more likely” to bring a claim if they did not have to pay the costs the alternatives are not made clear.  At present, with a Conditional Fee Agreement (“CFA”) and After the Event Insurance (“ATE”) a claimant does not have to pay the costs if a claim is lost.  The question gives no indication as to whether the replacement of the current system with qualified one way costs shifting would make any difference to a person’s willingess to sue.

Finally, although a minority of respondents said that they would be more likely to sue if they did not have to pay the costs, the question says nothing at all about “vexatious claims”.   In fact, it is based on the assumption that a person has been the victim of an offensive comment.  If such a comment was offensive and actionable then the claim would not be vexatious.

In short, this survey casts no light whatever on public attitudes to the proposed introduction of qualified one way costs shifting in publication proceedings.  It certainly does not show that the replacement of the current regime of CFAs and ATE with qualified one way costs shifting will lead to an increase in vexatious claims or put pressure on the courts or small publishers.

 


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3 responses

9 11 2013
David Engel

The main problem with the proposals is that the “severe financial hardship” test will exclude most likely claimants (in the real world) from the “full costs protection” regime, leaving them to take their chances with the “partial costs protection”. That proposes to cap liability for adverse costs, but of course not only is that subject to the vagaries of judicial discretion but you don’t get to find out the cap until you have issued and pursued proceedings.

So, once recoverability of CFA success fees and ATE premiums has been abolished, in practice we’re going to be back to the pre-1999 position for claimants wishing to take action against the media.

10 11 2013
Alastair Brett

As a former Legal Manager of a national newspaper and someone who pioneered “fast track arbitration” in cases where it was essential to resolve meaning disputes on day one – particularly where the claimant was on a CFA – costs protection orders will be a retrograde step and lock judges into means testing when we know that they hate anything to do with costs!

I cannot see how it can seriously be contested that once someone demonstrates a bona fide claim which turns on whether the words are defamatory or just inaccurate, whether it is a ‘high level meaning’ like someone is actually guilty of murder rather than that there are reasonable grounds for believing they might have been involved in a murder, then the newspaper should pay for the cost of arbitrating the meaning of the words complained of. That is simple “qualified one way costs shifting” and if the newspaper, magazine or blogger put something ambiguous into the public domain they should have to pay for the determination of that simple but key issue. Only when “meaning” has been determined can a defendant know whether or not to make an offer of amends and a claimant can know whether or not to pursue a case. The same applies when it comes to the issue of honest comment, whether or not something is “in the public interest” and sometimes just on quantum.

People forget the all important word at the front of QOCS which is that it is “qualified” costs shifting. The qualification must be that the claim is genuine – not frivolous of vexatious – and that the cost shifting on a one way basis only applies to the key legal issues like “meaning”, “honest comment” or is the piece “in the public interest”? Once the key issue in the dispute has been determined it should be settled quickly and easily. IF it cannot then be settled and becomes an evidential dispute, as in a Tommy Sheridan type case then normal costs shifting rules should apply. One way costs shifting should only apply to determining the key issue in a libel action at the very beginning of an action, hopefully in 28 days like in other industries. And judges should be spared having to carry out a means testing exercise in media claims.

Access to justice is as much a fundamental human right as free speech and privacy and no one should forget that. Newspapers must trust to the judges and/or arbitrators to penalise those who make vexatious claims. And it is misleading to talk about “free” arbitration, as recommended by Leveson, leading to a flood of vexatious claims. It simply will not happen if judges and arbitrators are allowed to throw out hopeless and thoroughly unmeritorious cases with deterrent costs orders because they should never have been brought.

21 11 2013
Costs protection proposals and vexatious claims | Justice in an Online World

[…] Not so, says the “The International Forum for Responsible Media Blog”. After reviewing the survey on which the “devastating” comment was based it says: […]

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