A newspaper’s right to free expression under article 10 of the European Convention was not breached by being ordered to pay success fees and after-the-event (ATE) insurance premiums, Master Gordon-Saker has ruled.
However, with recoverability still allowed in publications and privacy proceedings, the Senior Costs Judge reduced the success fees charged by media law firm Atkins Thomson, which has played a leading role in the phone hacking litigation, from 60% to 33%, and by counsel from 75% to 33%.
Master Gordon-Saker said the majority judgments of the Supreme Court in Coventry v Lawrence were hardly a “ringing endorsement” of the 2011 decision by the European Court of Human Rights (ECtHR) in MGN v UK, involving Naomi Campbell, in which it ruled that the system of recoverable success fees was disproportionate.
The master said Lords Neuberger and Dyson had explained that the ECtHR had also recognised that a regime might be compatible with the convention “even if it operates harshly in individual cases”.
The court heard in BNM v Mirror Group Newspapers  EWHC B1 (Costs) that the claimant was a primary school teacher with “no public or media profile” who “had a relationship with a successful Premiership footballer” between 2008 and 2011.
In 2011 the claimant lost her mobile phone. The defendant, publisher of The Sunday People, was approached by a source who was in contact with another person who claimed to have the phone and revealed the relationship with the footballer.
The claimant was visited by a freelance journalist working for the newspaper but her father complained and the phone was returned. The claimant complained that all the data from the phone had been deleted.
In March 2013, she instructed Atkins Thomson, and entered into a conditional fee agreement the following month. Under the agreement, Atkins Thomson was entitled to a 100% success fee if the claim went to trial, but a discounted fee if it settled before.
BNM bought an ATE insurance policy from Temple Legal Protection, providing her with cover of up to £165,000 if she was ordered to pay the defendant’s costs and her own disbursements.
Under the terms of a consent order, MGN agreed not to use or disclose the claimant’s confidential information, and to pay her damages of £20,000 and costs.
Atkins Thomson claimed costs of almost £242,000, including a 60% success fee, with 75% for both counsel involved. The ATE premium was £58,000 plus insurance premium tax of £3,480.
On detailed assessment, Master Gordon-Saker reduced all the lawyers’ success fees to 33%, but allowed the insurance premium without a deduction.
In the current ruling, the master concerned himself only with MGN’s general argument that paying the success fees and insurance premium were incompatible with its rights under article 10 of the convention.
He said he had no jurisdiction to make a declaration of incompatibility or “nullify any secondary legislation”, but he did have jurisdiction to refuse to allow the additional liabilities.
Despite the ECtHR’s ruling, Master Gordon-Saker said that in Coventry v Lawrence, the Supreme Court concluded that a defendant’s rights to a fair trial under article 6 had not been infringed by having to pay success fees and insurance premiums.
He said that while Supreme Court decisions were binding on the courts below, ECtHR decisions were “not binding” and had only to be taken into account.
Relying on the House of Lords’ decision in Campbell v MGN, he concluded that “that an order permitting the claimant to recover from MGN a reasonable success fee would not be a violation of MGN’s right to freedom of expression as a publisher under article 10”.
Master Gordon-Saker noted that MGN in its submissions said it would “seek to advance to the Supreme Court after its determination at first instance” its main argument that recovery of “additional liabilities” was unlawful and a breach of the Convention.
In a postscript, he added: “If, as the points of dispute predict, this issue is considered further, I would mention that in April 2013, at the request of the government, a working group of the Civil Justice Council suggested a scheme which could replace the regime of recoverable additional liabilities in publication and privacy proceedings.
“As yet the government would appear not to have acted on that recommendation.”