Three UK National newspaper groups have failed to persuade the Supreme Court to reform no win, no fee rules which have cost them millions.
The rules allow lawyers representing claimants in libel and privacy cases to double the fees that are paid to them by the losing side to compensate them for the risk of losing.
Times Newspapers, Associated Newspapers and Mirror Group Newspapers appealed over success fees running into the millions which were charged to them in three separate cases.
A successful appeal could have marked the end of the use of no-win, no-fee deals for lawyers handling defamation and privacy cases.
The Conditional Fee Agreement scheme has now largely been replaced for claims brought after 1 April 2013 – although it is still used in defamation and privacy cases.
The Government is currently conducting a public consultation on whether
to bring into force section 40 of the Crime and Courts Act 2013 – which
would introduce a new costs regime for media law.
It it is being fiercely resisted by the newspaper and magazine industry.
Section 40 would protect publishers who sign up to a Royal Charter-backed press regulator from paying the losing side’s costs in libel and privacy cases.
But it would mean publisher’s offering legal arbitration in libel and privacy cases which is free for claimants.
The publishers argued that the CFA fees charged in three cases were a breach of their right to freedom of expression under Article 10 of the European Convention on Human Rights.
The Times appealed against the fees charged after it was succesfully sued by Met Police detective Gary Flood over a 2006 article which suggested he was guilty of corruption. He was awarded £60,000 in damages and Times Newspapers was ordered to pay his legal fees (not revealed), plus success fee and the cost of the insurance he took out against losing.
The Daily Mail was successfully sued for £65,000 by management consultant Andrew Miller over a front page story which suggested his company had received public contracts worth millions as a result of cronyism. Publisher Associated Newspapers was ordered to pay his base costs of £633,000 plus £587,000 in success fees and £248,000 insurance premium.
The appeal by the publisher of the Mirror titles related to 23 claimants who sued for breach of privacy over phone-hacking.
They include actress Sadie Frost and former footballer Paul Gascoigne. Eight of the hacking victims were awarded a combined £1.2m in damages at the High Court in March 2016.
Lawyers for the 23 charged MGN between £22,000 and £210,000 in base fees for each case plus success fees of between 25 and 100 per cent of those sums and insurance premiums of between £13,515 and £87,450.
MGN also contested further base costs of £739,457, success fees of £645,800 and insurance of £318,000 incurred by claimants at the Court of Appeal in the same case.
Supreme Court – the President, Lord Neuberger, sitting with Lord
Mance, Lord Sumption, Lord Hughes and Lord Hodge – rejected the publishers’ claims and said the fees must stand.