Lord Justice Jackson's Report On Litigation Costs

Important proposals for libel and privacy cases.

Over the past year, Jackson LJ has been examining ways of improving the costs regime in litigation generally. He summarises his approach in the brief foreword to his Report, published in January 2010:

"In some areas of civil litigation costs are disproportionate and impede access to justice. I therefore propose a coherent package of interlocking reforms, designed to control costs and promote access to justice."

Chapter 32 of the report deals with defamation and privacy cases. He makes four main proposals (set out in bold type in the text of this article).

Jackson LJ had a balance to strike. He is particularly concerned at the widespread use of Conditional Fee Arrangements (CFAs) by claimants (including some well-heeled claimants), coupled with "After-The-Event" (ATE) insurance to protect against the danger of paying the defendants' costs in the event of losing the case: under current rules, if the claimant wins, the amount of the premium (often a 6-figure sum) plus a sizable success fee (sometimes 100%) on top of the fees of the claimant's solicitors are recoverable from the losing defendant.

This, says Jackson LJ, is "imposing a disproportionate costs burden on defendants".

At the same time, he says, "in many, but not all, cases there are strong policy reasons why the claimant should be protected" against liability for the defendant's costs if the claimant loses: "This is because in the paradigm libel case, the claimant is an individual of modest means and the defendant is a well resourced media organisation".

But the recoverability by claimants of ATE insurance premiums and success fees means that "the present system for achieving costs protection for claimants is, in my view, the most bizarre and expensive system that it is possible to devise."

He therefore recommends that:

success fees and ATE insurance premiums should NOT be recoverable for any types of civil litigation, including libel and privacy; But, to strike a balance between access to justice for claimants with slender means and disproportionate costs burdens on defendants,

a new costs regime be introduced for unsuccessful libel or privacy claimants: the amount of costs that an unsuccessful claimant may be ordered to pay should be a reasonable amount, reflective of the means of the parties and their conduct in the proceedings. The suggested wording is as follows:

"Costs ordered against the claimant in any claim for defamation or...