24 February 2009

UK: Ministry of Justice consults on 'excessive' libel costs

The Government launched a consultation today aimed at curbing high British libel costs which many fear are chilling freedom of speech.

Express Group 'apologizes' to the McCanns

Announcing the consultation, Justice Minister Bridget Prentice said: "Excessive costs and their threat may force defendants to settle unwarranted claims.

"The aim of these proposals is to bring more effective cost control to litigation in defamation proceedings and to ensure that costs in this area are more proportionate and reasonable.

"We need to ensure that people's right to freedom of expression is not infringed, and media organisations continue to report on matters of public concern."

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.

These 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, costs settlements often hugely outweigh any damages paid.

Tapas Group - 'G9' after their 'outside the court' settlement

Earlier this month, Guardian editor Alan Rusbridger revealed that Carter Ruck had issued his newspaper with a bill of £803,000 for a libel action which had resulted in a payout to Tesco which is believed to have been just a few thousand pounds.

And he has warned that such costs seriously undermine the ability of journalists to carry out investigative journalism.

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.

And in in 2005, the Daily Mirror was handed a £594,000 costs bill by law firm Schillings for representing model Naomi Campbell at a two-day House of Lords privacy hearing.

Measures being considered under the consultation, which closes on 6 May, include:
  • Limiting recoverable hourly rates by setting either maximum or fixed recoverable rates.
  • Mandatory cost capping or mandatory consideration of cost capping in every case.
  • Requiring the proportionality of total costs to be considered on cost assessments conducted by the court.

The Ministry of Justice statement said: "The consultation is necessary in addition to the current arrangements to help achieve better costs control in this area of the law.

"The consultation is aimed at, in particular, legal representatives who conduct litigation in the area of defamation, media organisations, insurers and those in England and Wales with an interest in, or views on, the proposals."

Last week, a newly published academic study revealed that libel costs in England and Wales were 140 times the average of 11 other European countries.

Speaking at the Press Gazette Media Law Conference earlier this month, Justice Secretary Jack Straw said that he made been made aware of the problems caused by the CFA system after a case brought against his local paper in his Blackburn constituency, the Lancashire Evening Post.

"They raised a case with me where the damages awarded were relatively manageable - around £1,000, though it was quite difficult to see where the merit was in the case, but the costs ran into about £25,000 for the other side.

"I don't regard this as acceptable - I have established a review."

He added: "There's an issue here of proportionality and of looking very carefully at the way in which the CFA system has operated and whether it's leading to unjust conclusions when newspapers are being forced to settle."

Speaking at the same conference, lawyer Julian Pike revealed that the cost risk to a publisher of defending a major libel case at trial was now £2.4m.

According to the Ministry of Justce around 220 defamation cases are issued in the High Court at the Royal Courts of Justice each year.

It estimates that a further 300 claims are settled before court proceedings are issued.
Press Gazette has been highlighting media concerns about CFAs since last year under its Fair Play on CFA campaign.

Editor's comment: CFAs are now a matter of economic life and death for publishers

Ministry of Justice consultation paper: Controlling costs in defamation proceedings

Source: Press Gazette


4 comments:

  1. This is great! I hope the UK will do something about these high prices.
    As far as I know, England(the UK) one of the few European countries,
    which never had lack of free speach.
    Even Hitler did not manage to occupie it. Maybe problems about religion, long ago.I always saw the Uk as a place based in democracy.But the British media are not free to tell what they know or suspect about some cases.
    I hope they will get more freedom in the future. Is Britain the same country who went to Irak and Afghanistan to teach them democracy?

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  2. I have been following the McCann case for a long time now and I think the above article is a clear indicator why the British press and others in the media pull their punches. Libel laws in Britain clearly stifle free speech and it is a very costly exercise for anyone to suggest anything other than indisputable evidence that is being heard in a court of law.

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  3. Many British law firms are greedy and thoroughly corrupt. It is almost like they have a licence to just extort money against the unfortunate newspaper or insurer who comes up against them. That money, frequently cost bills totalling about half a million etc just cannot be justified in terms of the work these lawyers actually do. Neither is it proportionate to recover damages for someone and then charge about double the damages or more in costs. Kate and Gerry abused this corrupt system and I really do hope our government are going to put a stop to it and allow proper and responsible reporting on people who have chosen to make themselves public figures and are entirely deserving of public censure.

    I would just mention though it is not just the threat of libel that may be holding the British press back, they can also be in serious trouble with our Attorney General if they print too much information about an ongoing case that would prevent a fair trial from taking place. A proper balance has to be struck, but I do agree the British Press have been sorted as Russell O'Brien bragged in his rog interviews, suggesting he may also have to sort the Portuguese press too. Well I cannot wait until you personally get sorted, Russell and I predict when that happens, the British Press and the Portuguese, will have a field day!!

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  4. It seems that even speculations around publications on the PJ's DVD are not allowed to be done.
    A regular British paper does not invite Amaral for a interview.Neither does a British TV channel. Why don't they let him talk? Does not the British public have the right to listen to him?
    Or are some people in Britain afraid of the truth coming out?
    The truth will come out some day, be sure.Too many people know it.
    And people talk. I don't see any of the Tapas 9 doing anything against Portugal.Amaral is there, ready to be a witness, I think.

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