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Costs take centre stage again

Costs take centre stage again


Competing ECHR rights, as well as the conduct and financing of future litigation, are under the courts' spotlight, writes David Greene

For practitioners, day-to-day practice costs issues dominate and two new appeals look set to alter the agenda. The new costs world continues to develop as Lord Justice Jackson is drawn in once again to oversee implementation of his fixed costs regime, just when he thought about passing on the baton.

But the pre-Jackson costs war still has life in it, albeit now largely carried on by proxy by the defamation Bar as it prepares for the combined Flood appeals in January and the leapfrogged appeal in BNM v MGN Limited [2016] EWHC B13 (Costs) in the Court of Appeal (SJ160/45). Both explore the recoverability of success fees and ATE premiums under the continuing carve out for defamation from the Jackson/LASPO changes.

By articles 2 to 4 of LASPO 2012 (Commencement No 5 and Saving Provision) Order 2013 [SI 2013/77] the pre-LASPO statutory regime has continued to apply in defamation and privacy cases against the media. On making the carve out, the government suggested a short delay in implementation of the LASPO changes in publication cases. There was a similar carve out for insolvency which has been repealed. It remains for defamation and privacy. Further, the government talked of a new regime of costs protection for defamation claims along the lines of QOCS in personal injury litigation but this too has not been introduced.

Battle continues

BNM is an argument about proportionality and plays off the differences in the Woolf and Jackson regimes. The claim was a privacy suit. The claimant sought an injunction and damages. The terms of the settlement included an award of £20,000 in damages.

Not unusually for such actions, costs far exceeded the damages agreed. The claimant’s costs were £242,000, including a success fee of 60 per cent, counsel’s success fee of 75 per cent, and an ATE premium of £61,500. On a line-by-line assessment Master Gordon-Saker reduced all this to £84,000, importantly applying the new post-LASPO proportionality test to all costs including the success fee and the ATE premium. Bold stuff, but much in keeping with the Jackson mantra.

A certificate of urgency has been given and a leapfrog over the High Court to the next level. The hearing will take place shortly. While this will have huge ramifications for defamation it will also be a measure of how the court imposes the proportionality test.

Article 6 v article 10

Leapfrogging is also relevant to the combined appeals in Flood v The Times Newspapers, Gulati v MGN Ltd, and Miller v Associated Newspapers Ltd coming before the Supreme Court in January in an article 6 (access to justice) versus article 10 (freedom of expression) contest. The court will consider whether recovery of success fees and ATE premiums falls foul of the European Convention on Human Rights.

Flood is before the court for the fourth time, but Gulati has leapfrogged from the High Court. The question of whether the recovery of uplift and ATE breached article 6 went against the publishers in the Supreme Court in Campbell v MGN Ltd (No 2) [2005] UKHL 61, but subsequently the ECHR (MGN Limited v United Kingdom (2011) 53 EHRR 5) decided the costs regime did not strike a fair balance between the paper’s article 10 and Campbell’s article 6 rights.

The Supreme Court returned to the issue in Coventry v Lawrence [2015] UKSC 50. This was purely an article 6 case; a nuisance claim against a speedway stadium. Article 10 was not invoked. The court decided against the appellant concluding there was no read over from the ECHR judgment. The court, however, had very mixed views. Damages awarded amounted to £20,000 with potential damages of another £75,000. The winning party’s costs were in excess of £1m with an ultimate award of £650,000.

The court winced at these figures. Much to the relief of those acting generally for claimants, the court still said the regime and consequent level of costs were not such as to restrict access to the court in breach of article 6.

Litigation finance

The Flood appeals will cause a much closer scrutiny of the ECHR judgment and the competing ECHR 10 rights. If the court decides in favour of the publishers we could see an application by the respondents to the ECHR, turning the MGN case on its head, proffering that the consequence is to lock out claimants from the court. The appeals in both Flood and BNM raise issues central to the conduct and financing of litigation in future. On a wider perspective, Flood will clarify issues in competing convention rights.

David Greene is senior partner at Edwin Coe and a member of the London Solicitors Litigation Association committee