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Don’t apply for adjournments based on Coventry, say defence lawyers

High Court [1]

“Difficult to see the benefit to defendants” of applying for adjournments

Insurers should not apply for adjournments in pre-April 2013 cases over the payment of success fees and after-the-event (ATE) insurance in the wake of the Supreme Court’s ruling in Coventry, a leading defendant law firm has recommended.

The Supreme Court suggested last month [2] that the pre-Jackson regime of recoverability may have breached the European Convention of Human Rights.

This raises the question of whether defendants/their insurers should apply for an order that the issue of the recoverability of success fees and ATE premiums be adjourned pending the judgment of the Supreme Court in Coventry and a possible declaration that the provisions of the Access to Justice Act 1999 are incompatible with the convention.

In a recently published briefing, Kennedys partners Martin Cox and Greg Wood noted that a declaration of incompatibility does not, according to the 1998 Human Rights Act, “affect the validity, continuing operation or enforcement of the provision in respect of which it is given and is not binding on the parties to the proceedings in which it is made”.

They said: “A claimant entitled to recover his success fee and ATE premium under the law applicable to pre-April 2013 CFAs remains entitled to those sums, even if a declaration of incompatibility is made, and would remain entitled to enforce payment of those sums against the losing defendant.

“In those circumstances, it is difficult to see the benefit to defendants/their insurers in applying to have determination of that issue adjourned pending the judgment of the Supreme Court, or why courts would necessarily grant such a stay.

“Furthermore, adjournments, if granted, will have associated costs including additional interest on claimant’s costs pending final resolution.”

The solicitors said that if the legislation is declared incompatible, that would raise the prospect of claims being made against the government by those who have paid out success fees and ATE premiums under the old legislation over many years for infringement of their convention rights – a prospect specifically highlighted by Lord Neuberger, president of the Supreme Court, who gave the lead judgment in Coventry.

“Overall… we would not recommend that clients apply to adjourn the determination of whether such sums should be paid. No doubt this issue will be carefully considered by insurers, both individually and collectively.”