The recent decision of the European Court of Human Rights (ECHR) in Case v Associated Newspapers v United Kingdom[1], has attracted considerable interest. The Hunan Rights court was asked to consider the compatibility with human rights of the system of “ no win no fee” conditional fee arrangement and the After The Event (ATE) insurance premium used to underwrite the defendants’ costs if the case is proven to be unsuccessful. Both arrangements are part of reforms made to the funding of litigation. A conditional fee arrangement from the Courts and Legal Services Act 1990 and, the ATE insurance premium from the Access to Justice Act 1999, were designed to liberalise and improve access to justice. The Daily Mail, a tabloid newspaper, won a victory in respect of the payment of special fees in litigation against the newspaper.
Setting the scene
The UK has a rich and diverse newspaper tradition. Over time newspapers have become influential and politically powerful and whose voice may influence public opinion and the culture of the country. Few governments can choose to ignore newspaper commentaries, the views of their owners and editors. Political leaders are often interconnected with newspapers owners whose support on election issues or controversial political questions such as the war in Iraq, or more recently Brexit, can prove decisive. Granted that social media has a growing influence and facilitates information sharing, newspapers, at least for now, should not be underestimated as to their role. Newspaper circulation has generally fallen. Newspaper ownership has ebbed and flowed and newspapers often have to be subsidised through owners or advertising or sponsorship. Newspapers have moved to digital copies to cope with the rise in costs of print editions. Few newspaper titles make large profits. Today it is not unusual to find that multiple newspaper titles are in single foreign ownership. It is fair to say that newspaper have been controversial in terms of muti-various activities amidst allegations of ‘phone hacking and other questionable behaviour. Are newspapers effectively accountable and, if so, to whom?
Regulation and accountability
The question of regulation and accountability was raised in 2012 on the publication of the Levenson Report,[2] named after Sir Brian Levenson, tasked to inquire into various relationships between the press and different groups in society including the police, politicians and others following the phone hacking scandal. In October 2013 a Royal Charter was granted on Press regulation and various self-regulatory bodies for the press were set up. The incentive was that upon joining such a body press regulation might be light touch. Section 40 of the Crime and Courts Act 2013 makes it easier for the public to challenge alleged illegality by publishers who have not subscribed to an approved regulator. At the same time more general legislative reforms have been made to the way the costs of litigation are covered beyond the traditional use of legal aid especially in cases raising human rights issues. There are mixed views as to the success of the legislation and some commentators think that the current arrangements remain largely unsatisfactory[3].
The role of the courts[4] is an essential part of the rule of law, and the oversight of the freedom of expression and of what the newspapers report and make commentary upon[5]. Litigation against newspapers is complex and increasingly common, even including litigation by some senior members of the Royal Family. Litigation costs are a major factor in determining litigation strategies or even whether or not litigation is worth pursuing. Many aggrieved citizens are unable to afford the costs, despite having a reasonable case.
Human rights and newspapers
Newspapers with some exceptions, are not particularly happy with the Human Rights Act 1998 and some are hostile to the European Convention of Human Rights and the Strasbourg Court. In that context the role of the rights of newspapers has been framed in terms of the award of costs and damages. In the recent decision of the European Court of Human Rights in Case v Associated Newspapers v United Kingdom[6], the court examined the system of “ no win no fee” conditional fee arrangement and the After The Event (ATE) insurance premium which underwrites the defendants’ costs if the case proves to be unsuccessful. Both arrangements arise, in the case of a conditional fee arrangement from the Courts and Legal Services Act 1990 and, in the case of ATE from the Access to Jstice Act 1999, designed to liberalise and improve access to justice.
The case was taken by the Daily Mail, on the basis of an argument that the costs awarded in defamation cases were “ excessive” and contrary to the European Convention of Human Rights. In the particular case the Mail had £83,000 awarded against the paper, but the legal fees were over £822,000 paid to lawyers of the applicant. The facts of the claim rested on the 2017 Manchester Arena terror attack, which resulted in the death of twenty -two people and the injury of more than 800. A man who was a suspect, but never charged. The Mail- on- Line on 29th May 2017 claiming that the named the suspect who consequently lost his job. He issued proceedings based on a breach by the paper of his privacy.
The case taken by the Daily Mail was on a similar claim that paper’s human rights were violated. This claim also rested on another case. Proceedings were taken against the Daily Mail on allegations of false and defamatory claims in 2019, made against a woman named because of police investigations into sex abuse claims. The claims were later found to have fabricated. The applicant was the clinical psychologist who had supported the allegations made by the “ victim” which were later to be found to be false.
The Daily Mail had to consider the applicants claim on the basis of a total amount of £825,089.The major part of the total was the £335.160 ATE premium. Some compromises were reached and a payment of £709,095 was accepted as a full and final payment.
The Daily Mail claimed that both the ATE payment and the special damages claims were a violation of the paper’s human rights specifically its Article 10 rights. The case has a number of distinctive features. The first is that the Government did not contest that there was an interference of the applicants’ rights under Article 10 of the Convention. A lot hinged on previous case law. The ECHR considered the recovery of success fees and ATE premiums separately:
A. Success fees
The Court distinguished examples of where the newspapers had been involved in “ regular” and frequently unlawfully hacking of mobile phones from the present case. Thus the case is confined to its facts excluding any egregious behaviour. A further noteworthy point is that the UK’s High Court had taken an active oversight role including “ active steps through costs budgeting properly to manage costs “ incurred by the parties. Thus the court concluded that the success fees claimed were “disproportionate” and “ even exceeded the “ broad margin of appreciation accorded o the Government in respect of general measures pursuing social and economic interests”. The Court held that Article 10 of the Convention had been breached.
B. ATE payments
The Court approached the use of ATE payments in a slightly different way than success fees. It is possible that such payments could in theory violate Article 10 ( and also Article 6 and Article 1 of the Protocol). However, the use of ATE payments does not conform to a “ general rule” for their use, whereas such a rule does apply in success fees. Thus the use of ATE payments is best considered on a case- by- case basis. One factor is that ATE payments offer considerable benefits to claimants. The aim is to protect the applicant’s law firms, especially if the claim had been shown to be unsuccessful. The decision of a case- by -case basis leaves much to be desired. No decision was reached in the case arising.
Conclusions
The Daily Mail successfully argued that its rights under the European Convention had been breached. The ECHR’s decision on the use of special payments will have significant consequences that will take some time to evaluate. The case might still be appealed. Will the decision put off arguably good cases from being taken? Will lawyers wish to sign up when the special fee arrangements may not be applicable to their efforts – how will they know in advance and what is likely to be their attitude to any uncertainty? Will insurers continue to underwrite and provide insurance in cases where there is an ATE arrangement? Potentially the case will put additional attention on how special payments are calculated and their relationship to the award of damages made to the claimant. The role of the High Court in assessing and regulating special fees will have to continue its rigorous and detailed oversight of special fees with an eye on the case and its implications. Perhaps the case will underline the need for even greater oversight and vigilance.
The ECHR does not provide sufficient or detailed guidance on how to treat special fees in the future. How is the line to be drawn over any future case? It is likely that the UK government will need to consider what action, if any to take in response to the decision. This is likely to take some time. Is there likely to be an appeal? Will new legislation need to be passed? Will a wait and see policy apply with case- by- case principles that have sufficient clarity emerging as a guide for the future.
The ECHR is clear that while ATE payments are likely to be legal, legality will depend on all the circumstances and facts of each case. This is likely to provide some level of uncertainty that may undermine the potential insurability of certain cases.
In the absence of legal aid for many such cases, claimants with perfectly good cases are left to resort to contingency based fee arrangements that include special fees. Litigation is inherently risky and making projections of likely success or failure is hard to calculate or even estimate. Consequently this entire area of law is unsettling and unpredictable when there are many case-worthy claimants that might find the stress and unpredictability too great to bear and may decide that litigation is best to be avoided.
Time will tell and a study of the decision of the European Court of Human Rights is essential. As noted the case may well be appealed. The decision of the ECHR raises many more questions than answers. Inevitably, the case has the potential to set an important landmark for the courts going forward. How the decision is be interpreted and understood is a work in progress.
[1] See: Application 37398/21 ( 12th November 2024). Also see MGM v UK No 39401/04 and No 7249/17.
[2] See The Levenson, Inquiry into the Culture, Practices and Ethics of the Press HC 780 4 volumes ( November 2012).
[3] See: House of Commons Library Media Bill (17th November 2023)
[4] Lachaux v Independent Print Ltd., [2021] EWHC 2636 (QB).
[5] See: Flood v Times Newspapers Ltd (No 2) Miller v Associated Newspapers Ltd v Frost and others v MGN Ltd. (No 2) [2017] UKSC 33..
[6] See: Application 37398/21 ( 12th November 2024). Also see MGM v UK No 39401/04 and No 7249/17.