On 29th November 2018, David Gaulke, Justice Secretary, announced within the House of Commons from 6th April 2019, conditional fee agreement (‘CFA’) success fees will no longer be recoverable from opponents in defamation and privacy claims.
At MRN we have experience dealing with such cost claims deriving out of media law, and much like the abolition of success fees in civil claims, we predict such a development will have a detrimental impact on the quantity of claims brought within this field and perhaps more worryingly, this area of law as a whole.
The change in success fees for defamation/privacy claims has been a long time coming and perhaps dates back to Naomi Campbell’s case within the European Court of Human Rights, where a 100% success fee was charged on her lawyer’s fees. However, s.44 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012, stopped short of abolishing success fees in defamation and privacy claims and the reform was held in abeyance, pending the outcome of the Leveson Inquiry.
The Leveson Inquiry had been rumbling on for a number of years and in effect, postponed the inevitable, but pursuant to the Conservative Party’s Manifesto for 2017 and Matt Hancock’s announcement in March 2018, Part 2 of the Inquiry was dropped. As such, David Gaulke’s announcement has been in the offing for some time, and perhaps a rather disappointing present for many Claimant firms over the festive period.
It is well known success fee CFA work, makes it viable for solicitors to take on riskier cases and/or complex work, as solicitors are able to balance out these claims with strong claims, which are more likely to succeed. However, with the abolition of success fees, the incentive to take on riskier and more complex cases becomes far less potent, and as such, work for victims of defamation or invasion of privacy may face a potential hurdle and prospective client’s may now need to enter private retainers in cases they were previously able to enter CFA, no-win no-fee agreements.
Given the cost implications for private retainers, clients may be a lot more reluctant to bring defamation and privacy claims and likewise with solicitors, who are all too aware of the substantial risks of acting under a CFA. As such, the availability of CFAs for such victims after 6th April 2019 may inevitably dry up.
A small silver lining however, the government has not abolished the recoverability of ATE premiums, although, for how long this will remain, is another matter and comments made by David Gaulke, indicate this could certainly change in the not too distant future. The 6th April 2019, will once again prove to be another important date in the costs calendar for next year.