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Commons committee revolt over libel cost capping

1 April 2010

The government suffered a temporary defeat in the Commons last week over its plans to cut down costs in libel cases to ten per cent.

The proposals to cap libel costs were introduced by the Lord Chancellor on 3 March, and by 25 March an order giving effect to the new rules was approved by the House of Lords despite opposition from Lord Woolf and former law lord Lord Scott.

The new cap is being implemented by way of a statutory order, where debates in the Commons are delegated to a ‘general committee’ – usually with a government majority.

The committee debating the proposed libel costs cap order was no exception but the government lost the vote with a 9/5 rejecting the proposal.

Most of those against the new rules expressed concerns that the change was being rushed though without time for proper consultation.

Some, including shadow Liberal Democrat justice minister David Howarth, raised the issue that the proposed order would apply to libel and privacy cases without convincing evidence in relation to costs in privacy cases.

Shadow Conservative justice minister Henry Bellingham agreed that escalating costs could have a ‘chilling effect’ on the media, leading to people settling cases for fear of paying up to 100 per cent success fee uplifts.

“However, going from 100 per cent to just ten per cent is to make a very big reduction, and one has to look at the other side of the coin, which is access to justice for our constituents,” he said.

Tom Watson, Labour MP for West Bromwich East, who also sat on the select committee that carried out a three-month inquiry into libel reform, also agreed that libel costs were too high, but, he suggested, the question this committee should consider is whether the new law met the test set out by Lord Justice Jackson in his review of costs in civil litigation. “Will we drive down costs and give access to justice?” he asked.

“The proposals would probably remove every one of my constituents from libel justice, and the libel courts would go back to the bad old days of being the preserve of just the rich and the powerful.”

The rebels’ victory, however, is likely to be short lived. The draft order will return to the full House on Tuesday, where MPs will vote on the proposal without a further debate. Unless the revolt spreads, it is expected that the order will be adopted late that evening.

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