"The conduct of libel proceedings on credit is a thoroughly bad idea". So said Mr Justice Coulson, a Liverpool High Court judge, when deciding that a losing claimant should pay the defendant’s costs of a "hopeless" defamation claim on the indemnity basis. In a somewhat bizarre case (Noorani v Calver [2009] EWHC 592 (QB)), which Mr Justice Coulson said "should never have been brought at all", the judge went on to say that the "existence of a CFA can inure a party like the Claimant to the chilly winds of reality. It can make him oblivious to the significant risk that he is running and the potentially ruinous costs liability that he may be incurring". One can see why, given the case before him, Mr Justice Coulson was inclined to make wider comments about the means by which it had come about.
openDemocracy's debate on libel and free speech was initiated by Emily MacManus' Will British libel law kill net free speech?. This led to a considerable debate on Slashdot.
Emma Woollcott is a solicitor at London-based Mishcon de Reya and specialises in defamation, reputation and privacy cases. She coordinates the firm's pro bono work offering free advice on issues affecting the LGBT community.
His words will energise critics of conditional fee arrangements ("CFAs") in libel claims (and, indeed, in claims for invasion of privacy). CFA critics complain that so-called "no win, no fee" funding arrangements have been abused by some lawyers to pressurise publishers and to undermine freedom of speech. They argue that the impact has been to make media owners overly cautious in vetting content pre-publication and too quick to capitulate later, as soon as proceedings (however justified) are threatened against them. Mainstream newspapers and broadcasters have complained about the “chilling effect” on freedom of speech and on investigative journalism, and less affluent publishers, including local newspapers, independent magazines and NGOs, have been left feeling vulnerable and stunted.
New media and internet publications express concerns about the global impact on free speech brought about by “libel tourism” (i.e. bringing libel proceedings in England which have only tenuous connections with this jurisdiction), the effect of which might be exacerbated by the prevalence of CFAs. There are also strong arguments that CFAs contribute to the lack of libel cases reaching court, where, for example, arguments of how public interest defenses should apply to new media publications would be best developed. Such concerns have underscored the convening of a growing number of public consultations into the future of publication proceedings in England, including the Culture, Media and Sport Select Committee inquiry on press standards, privacy and libel, which is expected to conclude in July 2009.
In addition to calling for costs caps and other measures to bolster their freedom of expression, newspapers have asked the Select Committee to consider stringent restrictions on the use of CFAs in publication proceedings. It may well be true that CFAs have been abused by a minority of libel lawyers but there is no reason of principle why such claims should be treated differently from other civil proceedings, nor why the rich alone should be able to protect their good names and their private lives. In the absence of legal aid for publication proceedings, a range of funding options must remain available to ensure that those without substantial means are able to protect themselves.
Libel and privacy proceedings, by their very nature, often raise hurt feelings and strong emotions amongst the parties. Therefore, it is incumbent on the lawyers to keep reality in check, and to remind their clients of the costs and risks of high court proceedings as those proceedings develop. If a claimant runs no risk of financial liability he has no incentive to act pragmatically to resolve disputes early, or to challenge his lawyers to ensure that fees are responsibly incurred and proportionate to the ends sought.
Critics of CFAs complain that more often than not claimant solicitors seek to recover success fees in the region of 100%. The Law Society guidance provides a "ready reckoner" equation by which to calculate a fair success fee, which is based on the lawyers’ assessment of the risk of the claim as a percentage. It provides, for example, that a 100% success fee is appropriate where the chances of success are judged to be 50%, and a success fee of 43% where the prospects are 70% (realistically as high as most Counsel will proffer). It is difficult to imagine that commercially-minded law firms would routinely take publication claims on CFAs if they considered at the onset that they had only a 50% chance of success. Realistically, most law firms would only take a 50:50 bet on not being paid in the most exceptional of cases, for example where there are strong public policy reasons why a point of principle should be determined. I suspect that other factors, such as the unpredictability of jury trial, are added to risk assessments to bolster the success fee sought, notwithstanding that such factors will (or should) have already been considered when arriving at the percentage chance of success.
CFAs should be used strategically to ensure that only good publication claims are brought. Individuals and companies who are not in a position to risk hundreds of thousands of pounds must be protected from most of the risks of losing, whilst still understanding the impact and cost of becoming involved in high court proceedings. For example, a claimant might pay reduced fees during the course of the litigation (i.e., a "no win, low fee" agreement); or a CFA might start only after a certain point in the proceedings is reached (e.g., where proofs of evidence have been taken or where relevant disclosure obtained). This way a claimant may show that he is committed to the action and has, so far as he is able, exposed himself to it financially. When he has done so, law firms may be more inclined to risk not being able to recovering their fees, and more justified in sharing in the upside where their commitment to the proceedings pays off. CFAs may also be used in conjunction with third party funding or after the event insurance, to spread the risk of the proceedings' failure amongst further parties, who will each give the claimant their independent views on its merits.
Lawyers and claimants must be resourceful to ensure that claimants who do not have unlimited means may protect their interests, whilst media owners are not prevented from defending publication claims purely by financial concerns. CFAs serve a worthwhile and necessary aim. In practice, however, they need to be used more responsibly to ensure that free speech is protected and that, by more cases reaching the courts, the development and refinement of our libel and privacy laws are preserved.
