Ministry of Justice: Conditional Fee Arrangements in Publication Proceedings
Thompsons are the most experienced trade union, employment rights and personal injury law firm. It has a network of offices across the UK, including the separate legal jurisdictions of Scotland and Northern Ireland.
We get instructed by trade unions and their officers as authors, editors and publishers of information within journals, newsletters, websites and other publications who have increasingly found themselves threatened with and subject to libel proceedings since the introduction of Conditional Fee Agreements (CFAs).
We also act for trade union activists and leaders who are frequently subjected to personal attacks in the press.
Thompsons has a specialist libel department to advise trade unions on defamation issues. We represent trade unionists as both claimants and defendants.
Thompsons is committed to access to justice and has campaigned for legal reforms that will increase and protect injured people’s rights to independent legal advice and representation regardless of their ability to pay.
We are however concerned by the so-called “chilling” or “ransom” effects that CFAs now have in libel proceedings. We are concerned that rather than increasing access to justice for the genuinely wronged individual, CFAs are being used to curb publication of genuine concerns and criticisms, to limit debate on serious issues, and, ultimately to prevent contrary opinions and what may be the factual truth being told.
Thompsons believes that the right to freedom of speech carries with it responsibilities for all authors, editors and publishers of statements.
It is not freedom of speech for people to be able to publish defamatory statements without worrying about the legal consequences.
It must also be right that those who express and publish opinions and facts which legitimately challenge the views and policies of others should not face the immediate threat of stifling legal costs.
Too often people are not just threatened with libel action, but forced into settling for substantial sums in order to avoid far higher costs should they defend and lose their case, regardless of whether they think they are in the right or not.
Pursuing a libel claim with a CFA can generate large recoverable legal fees for lawyers. that the prospect of meeting the claimant’s costs can sometimes make a defendant faced with such a claim feel “priced-out” of pursuing a defence, despite them feeling that their defence is valid. As such, a defendant may just choose to pay-up and get out.
These often very substantive costs are out of all proportion to the potential damages in libel proceedings which are often small sums.
If the government carried out even basic research into the life of libel actions we believe it would show that the vast majority of cases are settled and the reason for that is the fear of disproportionate costs.
In another field in which Thompsons has a substantial practice – personal injury – there are court rules enforcing proportionality between costs and damages. We can only recover disproportionate costs if we can show that they were reasonable and necessary. The same rules should apply to costs in libel proceedings.
Thompsons also believes that claimants in libel actions should be compelled to take out insurance to cover all of the other side’s costs after 14 days from the letter of claim. This would both protect the defendant in the event that the claimant loses its claim at trial and ensure that the claimant is committed to the case.
Thompsons supports staggering success fees in libel cases. The market is such that this is needed to encourage matters to settle earlier and prevent success fees rising to unreasonable levels.
Thompsons would back the introduction of a further protocol for libel to be introduced into the CPR. The aim would be to make the costs exposure and recovery regime fairer, and to create more structure in a somewhat disjointed area of law.
The field has been allowed to become a cartel for certain firms. The “mystery” should be removed from this area of the law.
A further protocol, in addition to the Pre-Action Protocol For Defamation, would aim to facilitate settlement once a case is up-and-running.
Response to questionnaire
1. Do you agree that the Theobalds Park Plus Agreement should be given statutory force and incorporated into rules of court?
The Theobalds Park Plus Agreement (TPPA) should be given statutory force. This should ensure that costs will be more proportionate and fairer.
More libel cases will, we believe, be both brought and defended, and settled for the right reasons. In the past year there have been no more than about five jury libel trials. This reflects the fact that the costs exposure when continuing to pursue or defend defamation cases can become so high that parties tend to settle a claim, regardless of its merits, before ATE and rapidly rising claimant CFA costs come into play.
2. Do you agree with the detailed stages specified and fixed recoverable success fees set out in the TPPA? If not please state why and alternative proposals.
Thompsons agrees with this proposal’s stages in essence, but thinks that the success fees should be capped rather than fixed. The detailed stages and the levels of recoverable success fees set out in the TPPA appear to be fairer than the current recoverable success fee regime and give the defendant a running chance if they are passionate about fighting cases for longer periods of time before it becomes apparent that they need to settle.
3. Do you agree that ATE insurance premiums should not be recoverable if cases settled or an offer of amends is agreed within 14 days?
Yes. Unlike in personal injury, where the many have to pay for the few in a market with bulk litigation and block rating, in libel cases a 14 day period of grace would be a good thing.
Once ATE has been taken-out, the claimant should be obliged to inform the defendant whether it is a staggered premium, and if so, at what stages. The ATE can then be taken into consideration by the defendant when it is deciding upon whether or when to settle. Once ATE has been finalised by the claimant, the cost of this should be recoverable from the defendant, if the defendant loses at trial or settles.
However, as stated elsewhere, we do not believe that a claimant on a CFA should be able to issue proceedings without a commitment to covering the defendant’s costs via ATE in the event that the claim fails.
4. What will be the impact on the ATE market for publication proceedings of this proposal?
At the moment, ATE premiums are prohibitively expensive for the opposing party. These premiums should become cheaper as costs become more proportionate. This should increase access to justice for both claimants and defendants and see claims settling for more reasonable amounts.
Libel will still be expensive but parties are more likely to settle because of the merits rather than because they fear the unpredictability of libel law and having to pay the other side’s massive costs.
Partial impact assessment questionnaire
5. What would be the potential costs/savings to your business of this option?
We can see no costs/savings benefit to our business in relation to these proposals.
6. What would be the potential consequences to your business of this option?
These proposals would have little impact upon Thompsons. We make our comments on the proposals in the interests of opening up access to justice. The moves should create a more even playing field, ensure costs are more proportionate to the generally low level of damages recovered in defamation cases, balance the financial positions of each party and ensure that the cases are dealt with expeditiously and fairly for all.
In making the proposals that we do we have Rule 1 (the overriding objective) of the Civil Procedure Rules 1998 in mind.