Important proposals for libel and privacy cases.

Over the past year, Jackson LJ has been examining ways of improving the costs regime in litigation generally. He summarises his approach in the brief foreword to his Report, published in January 2010:

"In some areas of civil litigation costs are disproportionate and impede access to justice. I therefore propose a coherent package of interlocking reforms, designed to control costs and promote access to justice."

Chapter 32 of the report deals with defamation and privacy cases. He makes four main proposals (set out in bold type in the text of this article).

Jackson LJ had a balance to strike. He is particularly concerned at the widespread use of Conditional Fee Arrangements (CFAs) by claimants (including some well-heeled claimants), coupled with "After-The-Event" (ATE) insurance to protect against the danger of paying the defendants' costs in the event of losing the case: under current rules, if the claimant wins, the amount of the premium (often a 6-figure sum) plus a sizable success fee (sometimes 100%) on top of the fees of the claimant's solicitors are recoverable from the losing defendant.

This, says Jackson LJ, is "imposing a disproportionate costs burden on defendants".

At the same time, he says, "in many, but not all, cases there are strong policy reasons why the claimant should be protected" against liability for the defendant's costs if the claimant loses: "This is because in the paradigm libel case, the claimant is an individual of modest means and the defendant is a well resourced media organisation".

But the recoverability by claimants of ATE insurance premiums and success fees means that "the present system for achieving costs protection for claimants is, in my view, the most bizarre and expensive system that it is possible to devise."

He therefore recommends that:

  • success fees and ATE insurance premiums should NOT be recoverable for any types of civil litigation, including libel and privacy;

But, to strike a balance between access to justice for claimants with slender means and disproportionate costs burdens on defendants,

  • a new costs regime be introduced for unsuccessful libel or privacy claimants: the amount of costs that an unsuccessful claimant may be ordered to pay should be a reasonable amount, reflective of the means of the parties and their conduct in the proceedings.

The suggested wording is as follows:

"Costs ordered against the claimant in any claim for defamation or breach of privacy shall not exceed the amount (if any) which is a reasonable one for him to pay having regard to all the circumstances including:

(a) the financial resources of all the parties to the proceedings, and

(b) their conduct in connection with the dispute to which the proceedings relate."

Jackson LJ comments that this wording "affords protection to a claimant of modest means who is litigating against a well resourced defendant. However, it would provide little protection to those wealthy claimants who can currently take advantage of CFAs and ATE insurance, in order to litigate at the expense of the other side. The other advantage of the formula suggested above is that it enables the court to take account of (a) the means of the defendant (as well as the means of the claimant) and (b) the conduct of both parties when assessing what level of costs should be paid by the unsuccessful claimant... One important issue in defamation and breach of privacy claims is the seriousness of the subject matter. Some libellous statements (e.g. a false allegation of paedophilia) are more serious than others. Some invasions of privacy (e.g. as in the Mosley case) are more distressing than others. These matters fall within the phrase 'all the circumstances' ".

Two more proposals are made to balance the rights of claimants and defendants:

  • increasing the general level of damages in defamation and breach of privacy proceedings by 10%;
  • requiring the claimant to identify in the Letter of Claim the meaning(s) he/she attributes to the words complained of.

Jackson LJ concludes by mentioning the issue of whether the expense of trial by jury in defamation actions is still appropriate, without deciding that question:

"If costs are now regarded as a serious impediment to access to justice in the field of defamation, then there is an argument for saying that all trials should be by judge alone. At this stage I do not go that far. Instead, I recommend that, after proper consultation, the question whether to retain trial by jury in defamation cases be reconsidered."

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.