Until now lawyers taking cases on a no-win, no-fee basis could
charge up to 100% more than their usual fees if they were
successful in a mechanism designed to compensate lawyers for the
lost cases for which they were not paid.
From April the maximum level of this 'success fee' will be cut
to 10%. The Government has laid before Parliament an amendment to
the Conditional Fee Agreements Order of 2000, which itself related
to the Courts and Legal Services Act. It will take effect in
April.
"Reducing the success fees charged by lawyers in no-win, no-fee
defamation cases will help level the playing field so that
scientists, journalists and writers can continue to publish
articles which are in the public interest without incurring such
disproportionate legal bills," said Straw. "This is particularly
important for ensuring open scientific exchange and protecting the
future of our regional media, who have small budgets but play a
large role in our democracy."
Straw said that the move would rebalance the justice system "so
it is affordable for the press to defend defamation cases, whilst
still ensuring access to justice for those who feel they have been
defamed".
The no-win, no-fee arrangements were intended to improve access
to justice for libelled people who otherwise could not afford
lawyers' fees. Straw said earlier this year, though, that "the
balance has now swung too far against publishers – including, for
example, scientists and academics".
Lord Justice Jackson published a full report into the costs of
civil court actions in January, when Straw said that he was
proposing the slash in success fees only as an "urgent interim
measure".
"This is a swift solution to an immediate problem," he said.
"[Lord Jackson's] recommendations warrant careful consideration and
I will be closely studying their proposals over the coming
months."
"In the meantime, the steps I am taking today to reduce the
success fee to 10%, should go a long way towards securing the
freedom of scientific exchange and our tradition of investigative
journalism, which are so fundamental to the protection of our
democracy in this country," he said.
The cap is just one of the Government's proposals for changing
the law of defamation. Defamation cases are now part of a costs
budgeting pilot scheme in which costs are subjected to judges'
scrutiny as the case goes along, the Ministry of Justice said.
The Government also expects a further report on defamation law
reform from a working group it set up. "The working group has
already met three times and is expected to report its initial
findings to Ministers in March," said the Ministry.
Lord Jackson identified personal injury claims, as well as
defamation actions, as an area where costs are distorting access to
justice.
He said that complex 'after the event' insurance, which allows
someone to take a case with no risk of paying any costs, are a
"major contributor to disproportionate costs in civil litigation in
England and Wales" and proposed a new system which would see even
successful litigants pay some costs.
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