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Lord Lester calls for urgent action to cap "scandal" of libel success fees

24 June 2010

Urgent action must be taken to tackle the “abuses” created by ‘no win, no fee’ defamation fees, Lord Lester has said.

Speaking in the House of Lords this week, the Liberal Democrat peer asked whether the government was intending to use section 58(4)(a) of the Courts and Legal Services Act 1990 to cap the maximum success fees chargeable under a conditional fee agreement in defamation proceedings.

Paying tribute to the efforts of former justice secretary Jack Straw and minister Lord Bach, Lord Lester said: “I urge the minister and his colleagues not to wait for consideration of the vast Jackson report before taking urgent action to deal with what I think is a scandal, where some fellow members of my profession charge inordinate fees through the conditional fee agreement so that the costs far outweigh any damages that NGOs, individuals or the press may have to pay. That is a very urgent matter.”

Attempts to curb the conditional fee arrangements that solicitors can charge for successful defamation actions was thwarted in the run up to the general election earlier this year.

Jack Straw had tried to push through legislation which would slice 90 per cent off the amount a successful legal team could claim in a libel action, but it was thrown out at committee stage.

Lord Lester said he wants to see their attempts to focus on the “abuses” created by conditional fee agreements with 100 per cent success fees rekindled.

Liberal Democrat justice minister Lord McNally agreed that urgent action was needed, stating: “This defamation area produces great scandals, and I think that the balance of Lord Justice Jackson’s report will point us in the direction of urgent action. I pay tribute to the noble lord, Lord Lester, who has made available to my department his not inconsiderable research and preparation for a Defamation Bill, which will, I hope, enable us to move forward very quickly on this.”

The government is still considering the recommendations of Lord Jackson, published back in January in his review of civil litigation costs report.

But Labour’s Lord Bach told Lord McNally that the government must speed up its response, stating: “This is a bit of a scandal. We cannot wait for Jackson… this needs quick government action.”

Lord McNally said he was in favour of limiting success fees, or forcing the successful claimant to cover them, concluding: “The way the conditional fee regime has grown up has produced a number of abuses and anomalies. I think that right across the house there is a general feeling that there are abuses in the conditional fee system.

“We have to get the balance right between the access to justice that conditional fees give and some of the anomalies and, indeed, abuses that have grown up in practice. We will do so after consideration of Jackson, but with all due urgency.”

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