21 April 2016Print This Post

Battle over success fees in privacy cases heads for Supreme Court

RCJ

Mann J: challenge “capable of affecting large numbers of other cases”

The question of whether recoverable success fees in privacy cases are incompatible with publishers’ rights to freedom of expression is set to go before the Supreme Court, following a High Court ruling.

The High Court ruled last month in Miller that the Supreme Court should determine whether recoverable success fees in publications proceedings breached the right to freedom of expression in article 10 of the European Convention on Human Rights.

Ruling on a costs application in eight phone hacking cases, in which the claimants all had conditional fee agreements (CFAs), Mr Justice Mann said it might be “equally appropriate” as in Miller for him to grant a certificate for a leapfrog appeal to the Supreme Court

Following the introduction of LASPO, recoverability of success fees and ATE premiums was preserved for defamation and privacy cases.

However, Mann J said the phone hacking cases raised an “important point” as to the CFA provisions in “privacy litigation generally”.

He said the defendants, MGN, argued that the “entire additional recoveries scheme”, including success fees and ATE premiums, for both privacy and defamation cases was incompatible with the convention.

Delivering judgment in Eight Representative Claimants and Others v MGN [2016] EWHC (Ch), Mann J said the success fees exceeded £1.4m and the ATE premiums £632,000.

In 12 further settled phone hacking cases, he said the success fees were over £600,000 and insurance premiums more than £200,000.

“Accordingly, a lot of money rides on the point taken by MGN just in terms of those cases. Furthermore, the point raises a point which is capable of affecting large numbers of other cases. There are a large number of phone hacking cases in the pipeline, and there are large numbers of other cases which have historically been settled in other cases beyond the 12 cases that I have referred to.

“It is, of course, of even greater significance when one considers that, if the point is correct, it must apply to all other privacy claims.”

Mann J said that, like Mr Justice Mitting in Miller, he was bound to follow the House of Lords costs ruling in Campbell v MGN in 2005, which determined that the existing CFA regime, which allowed for the recovery of uplifts, was not a breach of article 10.

The judge said that in MGN v UK, the European Court of Human Rights (ECHR) had taken a “contrary view”, but the effect of that decision on the previous House of Lords decision “has yet to be tested”.

Mann J went on: “As a matter of the law of precedent, therefore, I am left with an apparently clear decision of the House of Lords, at least in relation to the uplift, and an apparently contrary decision of the ECHR.

“When faced with that same situation, Mitting J in Miller considered that the laws of precedent required him to follow the English decision and I consider that I should do the same.”

Mann J said the position of ATE premiums was “technically different” to success fees as they had not been at issue in the Campbell case and so neither court made a ruling on their recovery.

“However, for my part, I find it very hard to see how ATE premiums fall to be treated differently in the circumstances.”

Mann J said he agreed with Mitting J that the recovery of ATE premiums did not contravene article 10 either.

Mr Justice Mann determined that “on the basis of binding English authority, the English legislative regime which permits the recovery of the additional liabilities is not incompatible with article 10 of the convention” and MGN was “not entitled to rely on any incompatibility” to resist recovery of success fees in the eight phone hacking cases.

He concluded that a “similar point” on recoverability to the case before him was due to be considered by the Supreme Court in relation to defamation proceedings, and in Miller a certificate had been granted for a leapfrog appeal.

“Since my decision is clearly based on the binding nature of English authority notwithstanding an ECHR decision, it might be equally appropriate to grant a certificate for a leapfrog appeal in this case as well.”

Mann J said that, following the judgment, he would “entertain an application for an appropriate certificate (which has already been canvassed without any discouragement from me)”.

By Nick Hilborne

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