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Supreme Court backs pre-LASPO recoverability

Posted on April 13, 2017

Challenges by three leading newspaper publishers to the pre-LASPO recoverability regime failed in the Supreme Court on Tuesday. The court held that the claimants had a legitimate expectation under the Access to Justice Act 1999 that they would be able to recover additional liabilities at the time they entered into conditional fee agreements (CFAs).

The court was asked to resolve the tension between earlier rulings of the House of Lords and the European Court of Human Rights (ECtHR) on whether success fees and after-the-event insurance (ATE) premiums should be recoverable in publications proceedings – the House of Lords said in 2005 that they should be, but the ECtHR said in 2011 that they usually should not be because they breached the article 10 right to freedom of expression.

However, in the three conjoined cases of Times Newspapers Ltd & Ors v Flood & Ors [2017] UKSC 33, the Supreme Court – with president Lord Neuberger giving the unanimous ruling – held that the claimants’ rights under article 1 of the first protocol to the European Convention on Human Rights were more important.

Lord Neuberger said: “It is a fundamental principle of any civilised system of government that citizens are entitled to act on the assumption that the law is as set out in legislation (especially when its lawfulness has been confirmed by the highest court in the land), secure in the further assumption that the law will not be changed retroactively – i.e. in such a way as to undo retrospectively the law upon which they committed themselves.”

While the ruling suggested that it was hard to impugn the European court’s decision, the Supreme Court said it was “very difficult” to see how Mr Miller’s claim under article 1 “could be defeated”.

Lord Neuberger said: “Parliament did not see fit to render the LASPO regime retrospective: on the contrary, as explained above, the 1999 Act regime applies to all proceedings begun before 1 April 2013.

“Parliament thereby correctly recognised that, while the 1999 Act regime was unsatisfactory, it would be wrong to disapply it to proceedings which had been issued in the expectation that that regime would continue to apply to those proceedings.”

Lord Neuberger said that to refuse Mr Miller his costs would directly infringe on the fundamental right not to be deprived of his accrued rights and his legitimate expectations. “While freedom of expression is, of course, another fundamental principle, it is not so centrally engaged by the issue in this case: the decision in MGN v UK is essentially based on the indirect, chilling, effect on freedom of expression of a very substantial costs order.”

As a result, Lord Neuberger declined to reach a definitive conclusion on whether the ECtHr ruling was part of domestic law.

Were the Supreme Court to do this, “it would not technically bind the government [as it was not a party to this case], but it would make it difficult for the government to re-open the question in this country, and it could make it more difficult for the government to challenge the conclusion and reasoning in MGN v UK in Strasbourg.

“Although we are not being asked to make a declaration of incompatibility, a decision that the [ECtHR ruling] applies but cannot assist the appellants in the three appeals could have very similar consequences, and section 5 of the Human Rights Act 1998 requires the government to be notified if a declaration of incompatibility is sought in any proceedings.”

The claimants’ argument in one of the cases, Frost v MGN, was weaker as the claimants – who were victims of phone hacking – all entered into CFAs and took out ATE insurance after publication of the ECtHr ruling.

But Lord Neuberger still reached the same conclusion – despite that ruling, the pre-LASPO regime was still in force and lawful in domestic terms. Further, he continued, a “more fundamental” reason to reject MGN’s appeal was the ECtHR ruling could not be properly invoked in a case involving “the persistence, pervasiveness and flagrancy of the hacking and blagging, and the lack of any public significance of the information which it would be expected to and did reveal”.

ACL vice-chairman Francis Kendall commented: “The nature of the ruling means that the issue has not been fully determined, but it has clearly shut the door to the argument in circumstances where there is illegal conduct involved (phone hacking/blagging etc). This should apply to all such cases. It may be unsurprising, with hindsight, that the Supreme Court did not find favour in an argument based on the freedom of expression to publish illegally obtained material.

“In respect of other privacy/defamation cases, it appears that, despite this ruling, the lower courts will still be bound by the Campbell v MGN House of Lords ruling that additional liabilities do not breach the article 10 right, until there is an appeal to the Supreme Court at which the government is represented. The government may find this an unwelcome distraction at this time.”

Costs Lawyer Andy Ellis, managing director of Practico, added: “The decision represents a series of snookers that trap media defendants against the cushion. The only crumb of comfort is the emphasis given in paragraph 9 to ‘the new provisions which limit the level of overall costs to what is proportionate (pursuant to CPR 44.3(2)(a))’.

“This reference only makes sense if the amount of additional liabilities are up for grabs in the post-LASPO ‘stand back’ proportionality test. All eyes will now be on the BNM v MGN and May v Wavell appeals later this year, when it will be harder for claimants to argue that their blanket immunity from the Jackson reforms should continue.”

 

The ACL eBulletin will back in a fortnight.

 

This post was posted in ACL e-Bulletin