While I am far from convinced about the wisdom or justice of the CFA system as it is presently constituted, it has to be accepted as legislative policy. The hearing was delayed until the Court of Appeal handed down judgment in BNM v MGN, but in the event it did not address the application of the test to base costs. Section 11.5 provides that, in deciding whether the costs claimed are reasonable and (on a standard basis) proportionate, the court will consider the amount of any additional liability separately from the base costs. First, the use of CFAs by impecunious claimants who do not take out ATE insurance. At the trial and in the Court of Appeal they had acted under an ordinary retainer. All of our barristers are able to attend hearings and meetings with clients via telephone or video conference software.Â Click here for further details. Finding ways of moderating the costs of defamation cases would then be in the best interests of all concerned. The scheme under which such liability is imposed was a choice open to the legislature. Â Â The system of conditional fee agreements which was originally introduced in England under section 58 of the Courts and Legal Services Act 1990 did not, of course, provide for the recovery of the uplift, or “success fee” as it was called in section 58(2)(b), from the losing party. One reason is that the three bills have not yet been assessed. In principle, MGN accept this argument. The importance of the reference to the rules of court in section 58A(6) of the 1990 Act under the English system is to be seen against this background. Â Â Thus, notwithstanding the need to examine the balance on the facts of the individual case, I think that the impracticality of requiring a means test and the small number of individuals who could be said to have sufficient resources to provide them with access to legal services entitled Parliament to lay down a general rule that CFAs are open to everyone. The speeches in the substantive proceedings in this case discuss the relationship between the rights of the Daily Mirror under article 10 and Ms Campbell’s right to preserve the confidentiality of personal information. In personal injury litigation one is for the most part dealing with very large numbers of small claims. MGN challenged the decision in Campbell v MGN (No.2) ( 1 WLR 3394) on Article 10 grounds. It is not possible to read these provisions as excluding proceedings in cases of defamation or breach of confidence. The Court focussed on the success fee which was recovered by Ms Campbellâs lawyers (it noted that the applicant did not I would only add, by way of a tailpiece, that I see considerable force in the comments made by Lord Hoffmann in the concluding paragraphs of his opinion. It is still under consideration which of these will receive the support of the government as a substitute for the existing system of legal aid still in operation, but the model of litigation funding agreements has attracted considerable support. But in my opinion there is no need for such measures because the existing scheme is compatible. Â Â Â Â 51.Â Â The government, allied with the Law Society, underwent a Pauline conversion in 1989, when it published a Green Paper favouring the introduction of CFAs and followed it up by making statutory provision for them in the 1990 Act. F 020 7831 2686 It is to the rules of court that one must look to see what protection, if any, is afforded to the losing party under the new arrangement – bearing in mind that he was not a party to the agreement by which the amount of the success fee was fixed. Giving practical advice on the parameters of the law is now difficult. It is, in the end, the ultimate controlling factor which the court must apply if it is to ensure, in a case such as this which is for breach of confidence, that the right of access to the court of the receiving party to vindicate her right to privacy under article 8 of the Convention is properly balanced against the losing party’s article 10 right of free speech. Â Â In my opinion it is plain that rule 44.2 is intended to provide the paying party, who was not of course party to the funding arrangement entered into between the receiving party and his solicitor, with an opportunity to seek a modification of the amount of the success fee on the ground that is either unreasonable or is not proportionate. It could not be included in the costs recoverable from the losing party. Regulation 4(2)(d) of the Conditional Fee Agreements Regulations 2000 (SI 2000/692) requires a legal representative, before entering into a CFA, to inform the client “whether other methods of financing those costs are availableâ¦”. The Court of Appeal reversed this decision. Â Â The blackmailing effect of such litigation appears to arise from two factors. There has, as I have said, been no assessment in which the level of the success fees might be contested. It does not contemplate an investigation into his means to decide whether he could have taken the risk of paying the costs himself. Â Â Although CFAs first made an appearance in the Courts and Legal Services Act 1990, the legislation giving rise to this dispute is largely to be found in the Access to Justice Act 1999 and subsequent subordinate legislation. Earlier this year, the Court in BNM v MGN used the proportionality test to dramatically reduce the winning party's costs award. MGN v UK Campbell brought a claim for breach of privacy. It was submitted on behalf of the appellant Ms Campbell, supported by the helpful written submission of the Law Society, that such an examination would be unworkable, and I have to agree with this conclusion, attractive as the idea might appear at first sight. Hers is a household name, nationally and 2. The Defendant’s Article 10 rights justified publication of the additional information. The contrast between the two cases could hardly be greater. Therapy details tipped the balance - The Telegraph, 5 Grayâs Inn Square Conditional fee arrangements cannot be the subject of an enforceable conditional fee agreement in criminal proceedings or family proceedings: see section 58A(1) and (2). It is true that when one has to balance rights such as freedom of expression against other rights such as privacy or access to a court, there has to be, as Lord Steyn said inÂ. The regimen of CFAs and the imposition of these charges upon the losing party is, however, legislative policy which the courts must accept, as Lord Hoffmann has stated in para 16 of his opinion, and the present case has to be judged against this background. It seems to me undeniable that there is a degree of roughness about the justice of this, but there are inevitably incidents of any system for the funding of litigation which will bear more harshly upon some parties. After a trial lasting five days in February 2002, Morland J found the case proved and awarded her Â£3,500 damages and costs. See Also â Campbell v MGN Ltd (No 2) HL 20-Oct-2005 The appellant sought to challenge the level of costs sought by the claimant after she had succeeded in her appeal to the House. The primary legislation from which the Lords of Council and Session derived their power to make these enactments is to be found in section 36(2) of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1990. Henceforward they would be able to vindicate their rights, which are also Convention rights, in the way that the rich and powerful have always been able to do. Thus the basic profit costs claimed by the solicitors and fees claimed by counsel came to Â£288,468. Â Â I am not sure that “penalty” is quite the right word, but there is no doubt that a deliberate policy of the 1999 Act was to impose the cost of all CFA litigation, successful or unsuccessful, upon unsuccessful defendants as a class. As late as 1979, when the government accepted the view of the Royal Commission on Legal Services to that effect, this was conventional morality. So the rights and interests of both sides must be considered and weighed up against each other in deciding whether, having regard to the interests at stake, the amount was proportionate. It uses the same expression, adding the words “and, if so, how they apply to the client and the proceedings in question.” It refers to other external sources of finance, whether as a result of insurance, membership of a trade union or otherwise, that may be available. Ms Campbell appealed. Section 58A(6) provides that a costs order made in any proceedings may, subject in the case of court proceedings to rules of court, include provision requiring payment of any fees payable under a conditional fee agreement which provides for a success fee. First, they say that it is necessarily disproportionate because it is more than (and up to twice as much as) the amount which, under the ordinary assessment rules, a costs judge would consider reasonable and proportionate. In evenly balanced cases a success fee of 100 per cent might well be thought not to be unreasonable. Â Â It is however not necessary to decide that article 6 positively requires legal assistance in actions for defamation and the like in order to come to the conclusion that the provision of such assistance is a legitimate objective which, unless it amounts to a disproportionate burden, a member state is entitled to consider necessary in a democratic society. Â Â It has to be said that there are many who regard the imbalance in the system adopted in England and Wales as most unjust. The first confuses two different concepts of proportionality. Proportionality and Costs Assessment: BNM v MGN Limited  EWCA Civ 1767 In edition 143 of BC Disease News ( here ), we reported on the case of BNM v MGN Limited  EWHC B13 (Costs), in which Costs Master Gordon-Saker conducted a line by line assessment of costs on the standard basis. MGN were mortified to find that although the award of damages had been only Â£3,500 (and five of the nine judges who considered the matter had thought that they should not be liable at all), they were being asked to pay legal costs (in addition to their own) in the sum of Â£1,086,295.47. The expression “costs” for this purpose includes any additional liability by way of a percentage increase incurred under a conditional fee agreement: see the definitions of “costs”, “funding arrangement” and “additional liability” in rule 43.2(1). Only costs which have been proportionately and reasonably incurred and which are proportionate and reasonable in amount will be recoverable against the paying party: see rules 44.4 and 5 of the CPR. Â Â It follows that in my opinion the success fee as such cannot be disallowed simply on the ground that MGN’s liability would be inconsistent with its rights under article 10. The availability of legal services under a CFA is necessary to provide the access to a court required by article 6 and thereby give litigants an effective means of enforcing their rights. The means of the client are irrelevant to the question whether or not it was reasonable for her to enter into a conditional fee agreement. Her complaint concerned the publication of additional details and photographs concerning the treatment she was receiving. 39401/04) was a case involving the supermodel Naomi Campbellâs right to privacy versus a newspaperâs right to freedom of expression. The House of Lords upheld the claim and awarded her costs. She says, probably with justification, that there can be few such individuals. If MGN are right about Ms Campbell’s means, she would have been able to pay their costs if she had lost. That such fees constitute a “chill factor” cannot be doubted, but the issue is whether they are a proportionate way of dealing with the issue of the funding of such litigation. But the appeal to the House of Lords was conducted pursuant to a CFA which provided that if the appeal succeeded, solicitors and counsel should be entitled to success fees of 95% and 100% respectively. (i) BNM v MGN Ltd  EWHC B13 (Costs) âapplication of new test to both base costs and additional liabilities âthough separately âCourt of Appeal October 2017; (ii) King v Basildon & Thurrock  EWHC B32 (Costs) âproportionality does not Campbell (Appellant) v. MGN Limited (Respondents)  UKHL 22 THE LORD NICHOLLS OF BIRKENHEAD My Lords, 1. Â Â In my opinion these arguments are flawed. One is dealing with a very small number of claims to payment of relatively large sums of costs, which some publishers may be strong enough to absorb or insure against but which can have serious effects upon their financial position. Per Lords Nicholls and Hoffman, dissenting: The Court of Appeal were correct in holding that the additional information was within the degree of latitude that should reasonably be afforded to journalists. After a trial lasting five days in February 2002, Morland J found the case proved and awarded her £3,500 damages and costs. Â Â The petition before the House then turns upon the question whether it is nevertheless still proportionate to permit the operation of the CFA system to the detriment of a losing defendant in a breach of confidence case when the claimant could be regarded as well able to afford to pay the costs and so as not being in need of the support of a CFA. Cited â MGN Limited v United Kingdom ECHR 24-Oct-2008 The Mirror had published a picture of Naomi Campbell leaving a rehabilitation clinic. A funding arrangement means a CFA or a policy taken out to insure against liability to pay the other side’s costs (“after the event” or “ATE” insurance) and an “additional liability” is the success fee or the ATE premium. There may well be more of these cases in future. The direction does not attempt to identify any factors that may be relevant, other than directing that the question whether the success fee is proportionate is a separate question from that relating to the proportionality of the base costs. It is a separate question whether a legislative solution may be needed to comply with article 10. Campbell wins privacy battle with Daily Mirror - The Times The publishers do not have the same negotiating strength as the liability insurers because there are few assessments to be contested and disputing them involves considerable additional costs. Reference:  UKHL 22;  2 AC 457;  2 WLR 1232;  EMLR 247, Judge: Lords Nicholls, Hoffman, Hope, Hale & Carswell, Summary: Breach of confidence - Privacy- Private information - Art 8, ECHR -Freedom of expression - Art 10, ECHR- Photographs, Appearances: But they say that in the circumstances of this case, an award of costs increased by a success fee is for two reasons disproportionate. MGN do not really deny that in principle it is open to the legislature to choose to fund access to justice in this way. The Conditional Fee Agreements Order 2000 (SI 2000/823) allowed the use of CFAs in all litigation except criminal and certain family and environmental proceedings and fixed the maximum success fee at 100%. Â Â After a trial which lasted from 5 to 18 April 2005 the action was dismissed. (A full account of the earlier history will be found in the judgments of the Court of Appeal inÂ. The CPR on costs are concerned with whether expenditure on litigation was proportionate to the amount at stake, the interests of the parties, complexity of the issues and so forth. 10)) provision is made both for CFAs and an alternative, the setting up of litigation funding agreements. Â Â In the meanwhile, in advance of assessment, MGN raise a point of principle about their liability to the costs of the proceedings in the House of Lords. The Strasbourg court was fairly undemanding about this state of affairs, usually holding that it was not inconsistent with article 6 to expect both claimants and defendants in defamation proceedings to act in person: seeÂ. Â Â It is perhaps worth noting that, while civil legal aid is still available in Scotland under Part III of the Legal Aid (Scotland) Act 1986 in actions for personal injury, para 1 of Part II of Schedule 2 to the Act provides that it shall not be available in proceedings which are wholly or partly concerned with defamation or verbal injury. Their own solvency is not threatened. Of course, one object of extending CFAs to defamation and breach of confidence claims was to enable people of modest means to protect their reputations and privacy from powerful publishers who previously did not have to fear litigation even if their publications were totally unjustified. But there is no such machinery for a CFA. The House of Lords' decision in Campbell v MGN Limited appears to establish for the first time in English law an actionable right for the wrongful disclosure of private information, including photography taken in a public place ( UKHL 22) (see also "Breach of confidence: privacy", Bulletin, Intellectual property and information technology, this issue.) So, in contrast to the position in Scotland, litigation may now be conducted in these cases in England on the basis that if the client is successful it will be the losing party that has to pay the success fee. The defendant’s costs were no doubt substantial and irrecoverable. Similarly, one of the matters to be taken into account in assessing the percentage to be allowed by way of success fee is “what other methods of financing the costs were available to the receiving party”: see section 11.8(c) of the Practice Direction. Â Â Until the 1999 Act, legal aid was not available in defamation actions (see the Legal Aid Act 1988, Schedule 2, Part II, para 1), which were therefore the almost exclusive preserve of the rich. However the standards and regulatory framework to which a Section 11.9 declares that a percentage increase will not be reduced simply on the ground that, when added to the base costs, the total appears disproportionate. In particular it says little, if anything, about the proportionality itself. It has not been shown to be incompatible with the Convention and the objections in principle advanced by MGN cannot be sustained. She alleged that they had published information in respect of which she was entitled to privacy. That was particularly evident in the case ofÂ. (Case: Campbell v MGN Limited, House of Lords, 6 May 2004  UKHL 22.) In the High Court, MGN was found liable and Campbell was awarded £2,500 in damages, plus £1,000 in aggravated damages. It is true that costs are awarded only against defendants who have been found to have wrongfully published matter which is defamatory or in breach of a claimant’s right to the confidentiality of personal information. Desmond Browne CBE QC - Leading Counsel (Defendant), Campbell wins privacy battle with Daily Mirror - The Times, Law Lords rule in supermodel's favour - BBC News, Privacy ruling sets new press limit - Guardian, Therapy details tipped the balance - The Telegraph, Emails about departure of former head of British Council in Italy not defamatory, The Duchess of Sussex wins her privacy and copyright claim, Barrister of the week: William Bennett QC, Nicklin J appointed Judge in Charge of Media and Communications List, (1) Williams (2) Wickham-Jones (3) Lownie v (1) IC (2) FCDO. The Claimant’s Article 8 rights outweighed the Defendant’s Article 10 rights, so that publication of the additional information was an infringement of the Claimant’s Article 8 rights for which she was entitled to damages. Â Â Ms Campbell denies that she is so wealthy as to be able to view with equanimity the risk of having to pay both her own and MGN’s costs of an appeal to the House of Lords. This then becomes a matter of contract. Â Â Until the 1999 Act came into force, a successful litigant who used a CFA had to pay the success fee himself. But it is open to litigants who would not otherwise have access to justice to enter into what are known as speculative fee charging agreements to obtain legal assistance. Though a relatively small sum had been awarded, the costs and success fee were very substantial. COVID-19 update:Â 5RBÂ is open for business and continues in full operation. All of our barristers are able to attend hearings and meetings with clients via telephone or video conference software. They say that the threat of liability to pay a large sum by way of costs is just as likely to inhibit freedom of expression as the threat of liability to pay a large sum by way of damages. As Lord Hoffmann has stated (para 23 of his opinion), it is not really in dispute whether the legislature can in principle adopt this method of funding access to justice. Part 11.8 of the Practice Directions deals with the assessment of the success fee: Â Â It is important to notice the impact of the recoverability of success fees upon the principle that recoverable costs should have been proportionately and reasonably incurred. On the other hand it would be wrong to conclude that this is an empty exercise. Â Â By a petition presented to the House on 21 February 2005, MGN seek a ruling of the Appeal Committee that they should not be liable to pay any part of the success fee on the ground that, in the circumstances of this case, such a liability is so disproportionate as to infringe their right to freedom of expression under article 10 of the Convention. This was confirmed by the House of Lords in Campbell v MGN  2 AC 457. But that, in my opinion, is also concerned with whether the claimant had the right to have the litigation funded by someone else. Being from the Senior Costs Judge, the decision will likely become widely relied upon in assessments and will be in the mind of District Judges applying the proportionality test. In some kinds of litigation, such as personal injury actions, the funds provided by losing defendants were intended to be in substitution for funds previously provided by the state in the form of legal aid. At the trial, Morland J upheld both claims. Striving for a world without capital punishment. Â Â That challenge is based upon the special position of the media as defendants to actions for defamation and wrongful publication of personal information such as that brought by Ms Campbell against the Daily Mirror. Gray’s Inn Want to find more news articles? The reasons for the shift in opinion were described by Lord Woolf CJ in para 7 of his judgment inÂ, Â Â The subsequent history of CFAs has been fully set out in the opinion of Lord Scott of Foscote in the House of Lords inÂ. Desmond Browne CBE QC - Leading Counsel (Defendant), Instructing Solicitors: Schillings for the Claimant; MGN Legal Department for the Defendant. Â Â The conditions laid down for an enforceable CFA are, inter alia, that it must relate to proceedings of a description specified by the Lord Chancellor, it must state the percentage by which the amount of fees which would be payable if it were not a CFA is to be increased and the percentage must not exceed the percentage specified by the Lord Chancellor. But the rich and powerful have also had to pay the price of failure. But section 58A of the 1990 Act, which was introduced by section 27(1) of the Access to Justice Act 1999, changed all that. Costs awarded by the High Court and Court of Appeal are assessed in accordance with principles stated in Part 44 of the Civil Procedure Rules. BNM -v- MGN Judgment, Court of Appeal Success for Claimant on the New Test of Proportionality. It was the Â£279,981.35 success fees which brought the figure up to Â£594,470. Â Â MGN nevertheless accept that freedom of expression under article 10 (1) may be restricted, as article 10(2) says, on grounds prescribed by law and necessary in a democratic society to protect the rights of others.
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