The Society of Editors says the decision by the Government to announce the end of ‘no-win no-fee’ conditional fee arrangements in defamation cases is brilliant news for the media industry.
The decision, announced this week by the Ministry of Justice, will come into effect in April next year and brings to an end an outrageous state of affairs that has cost media companies enormous sums of money.
Ian Murray, executive director at the Society commented: “This is brilliant news for an industry which is under severe financial pressure, notwithstanding that ATE premiums are still going to be recoverable.
Ever since Conditional Fee Agreements (CFAs) and success fees were introduced in 1999, the Society’s stance has been to oppose them, not only because they are iniquitous, unjust, and encourage litigation, but also because as a matter of principle, they had a chilling effect on freedom of expression and investigative journalism, Murray added.
He said: “The reform will bring to an end abuses of the system. One of the worst examples of abuse was the notorious case reported by the well-known law firm Foot Anstey, in which one of its publishing clients agreed to settle a small libel claim for £5,000 plus costs, only for the Court to assess the costs at more than £400,000.
“Litigation will still remain an expensive hazard for publishers, but at least the playing field will be more level from April 2019.
“Though it took the Ministry of Justice more than five years to consider and act upon the responses it received from the SoE, other press organisations, and media lawyers, the Ministry is to be congratulated for standing up for an industry which has been exposed to an unfair and onerous costs regime for nearly 20 years” Murray said.
The decision to commence the reforms, was announced by the Lord Chancellor David Gauke MP yesterday and will see lawyers acting on a conditional fee basis for clients who win libel claims no longer be able to double their bills. Mr Gauke said that from April 6 2019 he would bring into effect a section of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 that makes success fees no longer recoverable in defamation actions.
Tony Jaffa, Partner at media lawyers Foot Anstey also welcomed the announcement.
He said: “It’s been a long struggle, but at last, publishers and journalists can breathe a small sigh of relief. I have always felt that success fees were unfair, unjust, and just plain wrong, and any move by the Government to ease the financial pressures which publishers currently face is to be welcomed.
“The European Court of Human Rights decided in 2011 that by permitting success fees and ‘no win no fee’ agreements, the UK was breaching its freedom of expression obligations under Article 10 of the Convention. The Government’s announcement is a recognition of the importance that freedom of expression has in our society, which is why it should be welcomed.”
