The Government has said today that it will take measures to limit costs in libel cases “unless compelling arguments emerge against doing so”.
When Lord Woolf recommended the Conditional Fee Agreement (CFA) as a way to create a system where the courts were open to all regardless of means, he did so with the genuine and laudable intent of granting access to justice for plaintiffs denied recourse to legal aid.
Nowhere was the CFA taken up more avidly than in defamation claims. There is now genuine concern that the effect of CFAs in defamation proceedings is undermining freedom of speech, particularly in the media.
Libel costs for news organisations have escalated in recent years because of the huge costs of settling cases brought under no win, no fee rules. The Conditional Fee Agreements allow claimants to pay nothing up front on the understanding that their lawyers can double their money if they win. With media lawyers charging up to £700 an hour, £1400 per hour for a ‘winning’ lawyer, costs settlements often hugely outweigh any damages paid.
Combined with the burden of proof resting on the defendant, the system has ensured that newspaper editors have a choice – only print those stories which are provided by the PR guru’s behind various celebrities, or send your journalist out to investigate hard stories and risk, as the Guardian did, a bill from Carter-Ruck for £803,000 for a relatively minor libel which had resulted in a payout of ‘a few thousand’ to the organisation libelled. This seriously undermines the ability, and appetite, of journalists to investigate difficult issues.
Last year, the Mail on Sunday paid £5,000 in damages to MP Martyn Jones after accusing him of swearing at a Commons official – but paid out £520,000 in libel fees to the plaintiffs legal team.
Speaking at the Press Gazette Media Law Conference earlier this month, lawyer Julian Pike revealed that the cost risk to a publisher of defending a major libel case at trial was now £2.4 million. Little wonder that newspapers are so quick to settle ‘out of court’ for sums of money which may seem impressive, but are but a drop in the ocean compared to the lawyers bill lurking behind them.
The parents of Madeleine McCann were successful litigants this summer, as were their friends, and Murat the third arguido. A high proportion of the stories in the British press that they claimed had libelled them originated in the Portuguese press and had been picked up by news starved journalists working for the British press. However, reprinting something which has appeared in another publication is merely ‘repeating the libel’ and under British law, the newspapers concerned had a choice between proving the truth of the Portuguese allegations, obviously an impossibility since the PJ themselves could not produce sufficient evidence to mount a prosecution, or settling out of court quickly to minimise the outlandish bills which were heading towards them from the litigants high powered legal team.
Such settlements remain an ‘economic reality’ rather than a reflection of where the truth may or may not lie.
The Ministry of Justice has today issued a consultation paper “Controlling costs in defamation proceedings”. The paper estimates that defamation proceedings in England and Wales cost a total of around £15m a year, in legal fees alone. In these straightened times, that is a lot of good journalism that could be paid for – out of 50 major libel or privacy actions launched in the last six months, the Press Gazette could find only two which had been successfully defended – meaning quite simply, that the publishers got to pick up the lawyer’s bill in all the other cases.