Out-Law News 2 min. read

Government slashes libel success fees


The fees that lawyers can charge for successful libel cases in 'no-win, no-fee' arrangements will be slashed from April of this year. Justice Secretary Jack Straw has put into action a plan designed to tackle the high costs of defamation actions.

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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