MoJ plans costs reforms in defamation claims next year but no Jackson 2.0 'big bang' yet

03 Dec 2018

The Ministry of Justice (MoJ) plans to end, from April 2019, recoverability from paying parties of success fee uplifts in defamation and privacy claims. ATE insurance premiums will, however, remain recoverable.

Rules on litigation costs in defamation and privacy claims were unreformed in 2013 despite the wider changes introduced under part 2 of the LASPO Act 2012 for the majority of civil claims. Lord Justice Jackson’s first report, which laid the ground work for part 2 of the Act, had recommended some form of costs protection for media claims; a positon which was endorsed by the Leveson report in November 2012. This line of thinking was further refined by the Civil Justice Council, following which the MoJ arranged a consultation during the second half of 2013 and to which BLM responded at the time. Only now has the MoJ set out its preferred way forward.

The main elements of the MoJ’s preferred policy are: to retain full two-way (i.e. loser pays) costs shifting in defamation and privacy cases (thus rejecting the Jackson and Leveson proposal for qualified one-way costs shifting), to retain the recoverability of ATE premiums as consequence but to end the recoverability of success fee uplifts. These changes, which appear likely to find support among media institutions and other defendants, would be made by amending the Civil Procedure rules with effect from 6 April 2019, although the precise transitional trigger has yet to be confirmed. [The Ministerial Statement outlining the new measures is available here.]

These reforms are in an discreet area of civil litigation and if/when introduced would create another bespoke costs regime that would differ from the overall Jackson / LASPO bar on recoverability of additional liabilities and would vary subtly from exceptions in other types of claims, as set out in the table below.

  Success fee recoverable? ATE premium recoverable QOCS applies?
Civil claims generally No1 No1 No2
Personal injury No1 No1 Yes2
Clinical negligence No1 In part1,3 Yes2
Mesothelioma Yes4 Yes No

Defamation & privacy currently

from 6 April 2019

Yes Yes No
No Yes No
1 From 1 April 2013 and as a result of changes made in part 2 of the LASPO Act 2012.
2 From 1 April 2013 and as a result CPR part 44.13 - 44.17.
3 In clinical negligence claims, only that part of the ATE premium which covers the risk of unrecovered expert report costs remains recoverable.
4 Recoverable success fee in mesothelioma cases are fixed at 27.5%.

The reasons given for the introduction of these measures in the privacy field as of next April are to deal with the criticisms, from a human rights perspective, of the so-called ‘chilling effect’ of full  recoverability of additional liabilities on freedom of expression (of the press in particular) in European cases such as Mirror Group Newspapers v UK.

Looking further and still outstanding is Jackson’s “unfinished business of costs reform”, that being the introduction of fixed legal costs across all fast track cases and in a new intermediate track for claims valued at up to £100,000. Consultation on these ideas has, a year and a half after their publication, not yet not started. While that may not be surprising - given that the Government has other pressing priorities at the moment - at very least the emergence now of the new costs proposals in defamation and privacy claims does appear to show that civil costs reform has not completely fall off its radar

 

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Disclaimer: This document does not present a complete or comprehensive statement of the law, nor does it constitute legal advice. It is intended only to highlight issues that may be of interest to customers of BLM. Specialist legal advice should always be sought in any particular case.

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Alistair Kinley

Alistair Kinley

Director of Policy & Government Affairs,
London


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