It has long been accepted that the eye-watering costs of English libel litigation present a double ‘chill.’ On the one hand, the fear of having to defend a libel action means that many public interest news stories are spiked or watered down before publication. Meanwhile, when an ordinary person discovers that a lie has been published about them in a national newspaper, the cost of seeking redress is prohibitive. Bringing or defending a claim immediately puts a party on the hook for tens of thousands of pounds. If the case goes to trial then you risk paying a six-figure sum.
When it comes to reforming the financial costs of media litigation, Strasbourg often points the way. In Tolstoy Miloslavsky v United Kingdom [1995] ECHR 25, the Court of Human Rights held that the excessive awards made by some juries were an Article 10 violation. Juries were give much more detailed guidance on damages and awards were much lower. Jury trials were effectively abolished by section 12 of the Defamation Act 2013.
The Court of Human Rights was also ahead of the British government in recognising the free speech threat posed by the recoverability of Conditional Fee Agreements. In 2011, the Court held in MGN Ltd v United Kingdom [2011] ECHR 66 that 100% uplifts on CFAs (when paid by the losing party) was also a breach of free speech rights. The following year, a measure to end the recoverability of such ‘additional liabilities’ was included in the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (at s.44, amending the Courts and Legal Services Act 1990, s.58A), but the provision was not actually brought into force for ‘publication proceedings’ until 2019 (SI 2018/1287).
Although libel damages are no longer excessive and success fees are no longer recoverable, the scale of legal fees in defamation actions still presents a problem and a threat to freedom of expression. The Government has known about this for many years. Every analysis of the libel law published immediately before the passing of the Defamation Act 2013 mentioned costs as a key factor, and those who were sceptical of the need for reform of the substantive law attributed the ‘chill’ mainly to costs.
During the passage of the Act, Lord McNally promised that costs would be reformed separately, and a working group of the Civil Justice Council produced a report that recommended a form of costs ‘shifting’ and protection, similar to that which operates in personal injury claims. The Ministry of Justice ran a consultation on this idea in 2013, but (even though dozens of organisations diligently responded) it failed to respond at all until 2018, when it posted a cursory announcement that it would not be taking any action.
The cost problem was starkly illustrated earlier this year in Webb v Jones [2021] EWHC 1618 (QB). Despite the incoherence of the Particulars of Claim and the inherent “unwinnability” of the case, the Defendant nevertheless had to sell her home to fund her legal fees.
Could the Strasbourg judges once again provide the judicial cattle prod that the Ministry needs to deal with the costs issue? This month, the legal team acting for the defendants in the long-running Serafin v Malkiewicz dispute published their application to the European Court of Human Rights, alleging that the excessive costs incurred were an Article 10 violation. (Disclosure: I provided research support for the application).
The Serafin case concerned an article published in the Polish-language, London-based newspaper Nowy Czas. It encompassed a full cycle of litigation, including a trial, an appeal and a Supreme Court hearing, following which the entire case was sent for retrial. In June 2021, the Claimant offered to discontinue the case on a ‘drop hands’ basis (i.e. neither side would pursue the other for costs). Since there was no prospect of recovering their costs, even if they succeeded at trial, the Defendants reluctantly agreed. They were therefore left more than half a million pounds out of pocket, despite being in the same legal position as they were on the day the article was published, some six years prior.
The Strasbourg application argues that these high costs were unnecessary and disproportionate, and that the English legal system should have prevented such costs from accruing. The Defamation Act 2013 was only one part of the reform project, and the associated measures to limit the costs of libel litigation should have been implemented by now.
But what is to be done? The Malkiewicz v UK application suggests that the government “could have set up a specialist court or tribunal for defamation litigants of limited means and/or smaller scale publications with fixed costs recovery, as it has done for other claims.”
Some libel cases are incredibly complex and require the attention of the High Court. But that is also true of some contract disputes or other tortious claims, and that doesn’t prevent other claims, which turn on a simple question of fact or construction, from being dealt with in the County Courts. Why not libel cases too?
Many damages awards in libel are modest enough that, were they any other type of civil claim, they would be funnelled into the Fast Track or Small Claims Track. Perhaps the first step in reforming costs in defamation is to end the presumption of complexity, and let the Circuit Judges hear cases on a cost-capped basis. I suspect both parties in the Serafin case would have appreciated an alternative route.
Robert Sharp was the Head of Campaigns at English PEN from 2009-18, during which time he was one of the managers of the Libel Reform Campaign. He is now a freelance policy advisor and freedom of expression activist. www.robertsharp.co.
Surely a first step would be for the government to bring the Crime and Courts Act 2013 section 40 into force as parliament enacted to provide us with a cost effective remedy against the press?