Daily Mail loses challenge to recoverable ATE – but success fee uncertainty heads to Supreme Court

Supreme Court: case referred

Supreme Court: case referred

Recoverable after-the-event insurance (ATE) premiums are not incompatible with a publisher’s right to freedom of expression, the High Court has ruled – but it is asking the Supreme Court to resolve the case law tension over recoverable success fees in publications proceedings.

Mr Justice Mitting said recovery of an ATE premium met the tests set out under article 10 of the European Convention on Human Rights.

Successful claimants can still seek payment of additional liabilities from defendants in publications and privacy proceedings.

Miller v Associated Newspapers Limited [2016] EWHC 397 (QB) saw proceedings brought by a businessman on a conditional fee agreement against the Daily Mail arising from an article published about his business relationship with the then Commission of the Metropolitan Police, Sir Ian Blair.

The trial took place in 2012 and Mr Miller was awarded damages of £65,000 and his costs.

An appeal to the Court of Appeal was dismissed with costs, and permission to appeal to the Supreme Court was refused.

The costs were then subject to assessment by the Senior Costs Judge, Master Gordon-Saker, who referred to the High Court the question of whether the award of the additional liabilities to the claimant would be incompatible with the defendant’s article 10 rights.

On success fees, Mitting J said that although he was bound to follow the House of Lords’ 2005 ruling in Campbell v MGN, this conflicted with the subsequent European Court of Human Rights decision in 2011, MGN v United Kingdom. He said he would grant a certificate to permit the Supreme Court to resolve the issue, “if it chooses to do so”.

He noted that there was a pending Supreme Court hearing on a related costs issue scheduled for later this year.

However, the judge said the ATE premium should not be treated in the same way. There was a different statutory source and the social considerations which meant it was “possible to envisage an outcome in Strasbourg under which the success fee regime remains condemned but the ATE insurance scheme is not”.

In this case, the Mail had agreed not to claim costs above £360,000 in the event of success, which led to a premium of £234,000 for a policy issued by Temple Legal Protection. The newspaper argued that such arrangements – including agreeing not to claim costs at all so as to avoid the need for ATE – unfairly interfered with its article 10 rights.

Mitting J said: “Publishing allegedly defamatory material about an individual carries with it an unavoidable risk as to costs. Giving the option to a publisher to bear its own costs, even if successful, is not so disproportionate a disincentive to freedom of expression as to be without the margin of appreciation allowed to the UK…

“Applying the three tests required by article 10, it is not in dispute that the scheme for recovery of an ATE premium is prescribed by law and that it serves a legitimate social purpose. I am satisfied that it is necessary in a democratic society that a scheme such as this should exist…

“I am satisfied that the burden imposed by the ATE premium scheme on defendant publishers is not so large and not so lacking in appropriate controls as to amount to a disproportionate interference in their right to freedom of expression.

“I do not, on the material which I have considered, believe that the Strasbourg court, when faced with this as a discrete issue, would conclude that the UK scheme was outwith the margin of appreciation allowed to the UK.”

Steve Ruffle, Temple’s senior underwriting manager for commercial ATE claims, said: “I am delighted that Mr Justice Mitting has fully grasped these important issues and vindicated the fundamental role ATE insurance plays in providing access to justice that might otherwise have not been available.

“Temple has the pleasure of working with a great number of the foremost media and privacy lawyers. I can recall a number of claims over the years which would simply not have been pursued without the comfort of ATE insurance.”

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