Kerry Underwood

SUCCESS FEE RECOVERABILITY SCRAPPED IN DEFAMATION AND BREACH OF PRIVACY CASES

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The matters dealt with in this piece are examined in great detail in my three volume, 1,300 page book Personal Injury Small Claims, Portals and Fixed Costs – price £50 and available from Underwoods Solicitors here.

Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

These principles, and the whole issue of Qualified One-Way Costs Shifting, is dealt with in my book – Qualified One-Way Costs Shifting, Section 57 and Set-Off – Available from me here for £15.

 

Recoverability of success fees, but significantly not recoverability of After-the-Event insurance premiums, is to be scrapped in relation to new defamation and privacy claims, that is claims from 6 April 2019 onwards.

The statement by the Lord Chancellor states that this “provision will come into force for new cases on 6 April 2019.”

It is not clear whether this date relates to the entering into of the Conditional Fee Agreement, as was the case in both 2013 and 2016, or the date of the cause of action.

I presume that it will relate to any Conditional Fee Agreement entered into on or after 6 April 2019.

 

The type of claims covered are:

 

  • defamation;
  • malicious falsehood;
  • breach of confidence involving a publication to the general public;
  • misuse of private information;
  • harassment,

but in each case only where the defendant is a news publisher, that is a person who publishes a newspaper, magazine or website containing news or information about or comment on current affairs.

Generally recoverability of both success fees and ATE premiums was abolished in relation to arrangements entered into on or after 1 April 2013, by virtue of section 44 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012.

There were limited exceptions and the only ones that now remain are in relation to mesothelioma proceedings, where both the success fee and the ATE premium remain fully recoverable, and in clinical negligence proceedings where the success fee is not recoverable, but the ATE insurance premium is, but only to a limited extent.

In many ways the significance is not the abolition of recovery of the success fee, which was only ever a matter of time, but rather the decision to maintain the recoverability of the ATE premium.

Outside the field of personal injury, where Qualified One-Way Costs Shifting restricts the need for such insurance, this has been a key issue in relation to access to justice.

The system of Conditional Fee Agreements may mean that claimants can afford to pay their own lawyers, but if a losing client remains liable for the other side’s costs, which it does outside the QOCS protected field of personal injury, then access to justice is an illusion.

True it is that a claimant can seek to take out After-the-Event insurance, but the premium is then deducted from the damages if the claimant wins.

The winning claimant is almost certainly to be paying an unrecoverable success fee to its own solicitors in such cases as well.

As such schemes generally provide for no premium to be paid in a lost case, where the insurer has to pay out, a winning claimant is effectively paying for those premiums as well, which partly explains the high cost of ATE insurance.

Allowing recoverability of the ATE premium, but not the success fee, solves this problem and is a potential model for other types of cases.

Such insurance would generally cover the claimant’s own disbursements as well.

Whether it is just for a losing defendant to have to pay for the claimant to bring a claim against it is another matter.

Recoverability of success fees and After-the-Event insurance premiums was generally seen as involving identical considerations.

I always disagreed with that view, and while I always thought that recoverability of success fees was wrong, I took a different view about the recoverability of ATE premiums.

I refer above to it being potentially unjust for a defendant to finance the action against it, but ATE insurance at least gives a successful defendant a fund out of which it can enforce its costs order and generally defendants may prefer such a scheme, that is recoverable ATE insurance, to Qualified One-Way Costs Shifting.

 

Summary

General Civil Litigation, including Personal Injury Cases

The success fee remains recoverable only where the Conditional Fee Agreement was entered into on or before 31 March 2013.

 

Insolvency

The success fee remains recoverable only in relation to any Conditional Fee Agreement entered into on or before 5 April 2016.

 

Defamation and Privacy  

The success fee remains recoverable, but only in relation to Conditional Fee Agreements entered into on or before 5 April 2019.

 

Mesothelioma Claims

The success fee remains recoverable in all mesothelioma claims and there is no proposal to alter that position.

 

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Written by kerryunderwood

January 10, 2019 at 6:27 am

Posted in Uncategorized

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