Ministry of Justice
 Printable version
|
 E-mail this to a friend
|
Success fees in defamation cases reduced
Jack Straw yesterday took action to reduce the success fees that lawyers can charge in defamation cases from 100% to 10%.
The amendment, which is laid by Statutory Order today and would come into effect from April this year, will prevent legal costs in defamation cases spiralling out of control and follows the consultation 'Controlling costs in defamation proceedings', which was published by the Ministry of Justice in January this year.
Justice Secretary Jack Straw said:
'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. 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.
'The Statutory Order I am laying today reduces the maximum success fee from 100% to 10% rebalancing the 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.
'This is a swift solution to an immediate problem, a problem which has been recognised by the Science and Technology Committee and the Culture Media and Sport Committee, as well as by Lord Justice Jackson in his wide ranging ‘Review of Civil Litigation Costs'.
'Both Lord Justice Jackson's report and the Culture, Media and Sport Committee's reports were thorough and well considered, highlighting the need to reduce the 100% success fees in defamation cases. Their 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.'
Also published today are the responses to the consultation, which indicate support for the proposal to reduce defamation success fees to 10%. A wide range of stakeholders responded to the consultation, including legal professionals and their representative organisations, members of the judiciary, media organisations and legal insurance groups. More than half (53%) supported the proposal to reduce the maximum CFA success fee in defamation cases to 10%.
This is the latest step in the Ministry of Justice's programme of work to review the law of libel and to ensure reasonable and proportionate costs in defamation proceedings:
- The government announced a package of measures on 1 October 2009 as the first step for dealing with concerns over high costs in defamation proceedings, including ensuring that, where 'After the Event' insurance is taken out, defendants are notified as early as possible, and given the opportunity to reach a settlement without being liable for the insurance premiums.
- Defamation proceedings are now part of a mandatory costs budgeting pilot, with Judges scrutinising costs as cases progress to ensure that they are proportionate and within the agreed budget.
- A consultation on libel on the internet was published in September 2009, seeking views on the multiple publication rule and time limits in defamation cases. Responses to that consultation are now being considered.
- The government has also established a working group to consider whether the law of libel, including the law relating to libel tourism, in England and Wales needs reform, and if so to make recommendations as to solutions. The working group has already met three times and is expected to report its initial findings to Ministers in March.
- The government is actively considering the issues raised by the use of super-injunctions. Officials have met with press representatives and we are engaging with the judiciary on the matter.
Notes to editors
- Conditional Fee Agreements were first made enforceable under the Courts and Legal Services Act 1990 (as amended by the Access to Justice Act 1999).
- The current law allows lawyers to double their fees under conditional fee agreements (no-win, no-fee) by claiming a success fee of up to 100% on top of their usual fee. This is payable by the losing party in addition to the 'After The Event' insurance premium. Success fees cover the costs of cases which lawyers lose on a no-win, no-fee agreement.
- The Order seeks to reduce the maximum success fee in defamation cases to 10%. Defamation proceedings for the purposes of this Order covers defamation, malicious falsehood or breach of confidence involving publication to the public at large. This is intended as an interim measure while the government gives detailed consideration to the recommendations from Lord Justice Jackson (which would require primary legislation) as well as the CMS Committee's proposal for reform. However, in the meantime the proposal to reduce the maximum success fee to 10% would help control the costs in defamation cases and limit the potential harmful effect very high costs could have on the publication decisions of the media and others.
- The Statutory Order amends the Conditional Fee Agreements Order 2000 and is subject to approval from Parliament. Once approved, the Order will limit the maximum success fee to 10% in all defamation cases which are entered into after the coming into force of the Order.
- For more information, please contact the Ministry of Justice press office on 020 3334 3536.
Contact press office
Newsdesk: 020 3334 3536
(Mon - Fri: 7am to 8pm)
