The misuse of conditional fee agreements (CFAs) is one of the most significant causes of what is referred to as ‘the chilling effect’. Bad cases make bad law; bad CFA users make CFAs seem bad.
The portrayal of CFAs as being a way for greedy celebrity lawyers to double their fees is both wrong and a distraction from ‘access to justice’. The argument advanced by broadsheets and scientists, unintentionally benefits the silent tabloids. The reasoning behind CFAs was to make up for the loss of legal aid for the pursuit and defence of claims. The government decimated legal aid, but litigants were able to use ‘no win, no fee’ agreements.
The argument in the Campbell case was that the doubling of costs had a ‘chilling effect’ on newspapers such that it stopped newspapers from being able to tell the story. That is wrong for so many reasons:
1. Uplifts are determined by the court (as are the base costs). 100% uplifts are permissible, but very rarely granted (and rightly so).
2. CFAs are used by defendants as well as claimants. That is true of the media as much as the public. More defendants should make use of the CFA (if lawyers won’t take the risk, why are they advising their client to take it?)
3. One of the main cases that underlines the need for libel reform is that of Dr Peter Wilmshurst, who is being sued by the American medical company NMT (Medical) Inc. It is only because of CFAs that Wilmshurst can defend himself. The report that launched Libel Reform featured Dr Wilmshurst and the Sheffield Wednesday fan, Nigel Short. The Wilmshurst case is continuing, Nigel Short was defended successfully with CFA funding. Without CFAs Nigel would have been forced to capitulate and Peter Wilmshurst would be forced into defending himself.
4. The reason behind the uplift was to encourage lawyers to take on riskier cases. The higher the risk, the higher the uplift. If there is any doubt about this, you should be aware of the number of lawyers who will not do CFA work even under the existing rates. Wilmshurst is an easy example. No pay for years, no guarantee of pay at all because we might not win and, if it happens, a trial lasting for months. Lose and no pay for years of work, win and maybe still no pay or full pay. This really is a case of not only throwing out the baby with the bath water, but in some cases the bath as well.
5. Of course, it is not just the defendants such as Wilmshurst who have an arguable case for CFAs. Libel claimants don’t just include celebrities or sportsmen. Ordinary members of the public can be libelled and need redress. This firm acts for Sylvia Henry, the social worker wrongly blamed in the Baby P case; without CFAs, she would not be able to challenge the press.
6. Before challenging the moral case for CFAs, people need to walk in the shoes of the victims of the press. At a recent seminar, Zoe Margolis spoke of the fact she had not believed in CFAs until she was libelled by the Independent On Sunday. Without a CFA she would have had limited, if any, redress.
7. The ‘chilling effect’ can work both ways. CFAs might in certain circumstances stifle newspapers from reporting matters that are very much in the public interest, but can also stop victims of the press being able to stand up to the press. In a democracy, people need to be able to speak out and to challenge those who do speak out. It is not just about free speech, but honest and free speech. It is noteworthy that the letter to the Gazette was not signed by representatives of the tabloids. Tabloids can and do ruin people’s lives.
Libel CFAs stopped us having a law that was just available to the very rich (who could afford cases). The threat to CFAs could see us end up with a law available to the super-rich only.
We will go back to a situation whereby the very rich can afford a reputation that they do not deserve (Robert Maxwell often sued and threatened to sue newspapers who suggested he was a crook) and middle earners (as well as the poor) lose a good reputation because they cannot afford to bring a case. We do not want a situation where money talks and a lack of money means the press can talk about us.
Access to Justice means affordable justice. Justice must not only be seen to be done, but we need to afford for it to be done.
The problem is not with the uplift, but the base costs and the substantive law. Libel law is automatically assigned to the multi-track in court. Other cases can be allocated to the small claims track and fast track (where trial lengths are limited) and costs are proportionate.
There is no reason why closer case management cannot be used to ensure costs are proportionate to the amount in issue. In the Short case, the costs were high, the alleged libel was trivial. In Wilmshurst, the issue is complex and, therefore, costly. It is the substantive law that matters, an easy and affordable Public Interest Defence would go a long way to solving the problem.
At this time the biggest threat to the newspaper industry is not the CFA, but its own dishonesty. Free speech is important, but honest and free speech is more important.
Mark Lewis, consultant for Taylor Hampton, is Peter Wilmshurst’s solicitor. Last year, he brought a successful libel action against the Press Complaints Commission and its chair, Baroness Buscombe, in respect of his evidence last September to the House of Commons' culture, media and sport committee about phone hacking