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Supreme Court to decide on recovery of success fees and ATE premiums in publication proceedings

Supreme Court: case leapfrogged

Supreme Court: case leapfrogged

The Supreme Court is to return to the issue of recoverability after granting permission to appeal in a case leapfrogged from the High Court about costs in defamation.

Earlier this year, Mr Justice Mitting said [1] the highest court needed to resolve the tension between earlier rulings of the House of Lords and the European Court of Human Rights on whether success fees should be recoverable in publications proceedings.

However, in Miller v Associated Newspapers Limited [2016] EWHC 397 (QB), he ruled that recoverable after-the-event insurance (ATE) premiums are not incompatible with a publisher’s right to freedom of expression, but that will be under the Supreme Court’s scrutiny too after granting Associated Newspapers’ application to appeal.

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

The case involved 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 claimant’s base costs of trial and the appeal were agreed at £633,006 and paid by the newspaper. The disputed success fee and ATE premium amounted to £835,379.

The Senior Costs Judge, Master Gordon-Saker, 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.

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”.

The same issue arose the following month in Eight Representative Claimants and Others v MGN [2016] EWHC (Ch), relating to the Daily Mirror phone hacking cases. Mr Justice Mann said [2] it might be “equally appropriate” as in Miller for him to grant a certificate for a leapfrog appeal. However, at this stage it has not been conjoined.