The Supreme Court dismissed the appellant newspaper publishers’ appeals against costs orders, as they could not rely on the alleged rule that, where a claim involved restricting a newspaper or broadcaster’s freedom of expression, it would, under domestic law, normally infringe their rights under art 10 of the European Convention on Human Rights to require it to reimburse the success fee and after the event insurance premium. The rule’s application would infringe the respondents’ rights to property and undermine the rule of law, and it could not apply where information had been obtained illegally by or on behalf of a media organisation.

Times Newspapers Limited v Flood; Miller v Associated Newspapers Ltd; Frost and others v MGN Ltd

Human Rights – Expression – Freedom to receive and impart information – Appellant newspaper publishers appealing against costs orders on basis infringing freedom of expression – Whether domestic law should reflect European Court of Human Rights decision – Whether declaration of incompatibility should be made – Whether costs orders in respondents’ favour should be amended – Whether judge’s decision to award first respondent all costs of proceedings permissible exercise of discretion – European Convention on Human Rights, art 10, First Protocol, art 1.

Three appeals were heard together because they involved challenges to orders for costs made against the appellant newspaper publishers after trial. In all three cases, the proceedings against the publisher had been brought by respondents who were able to take advantage of the costs regime introduced by the Access to Justice Act 1999 and reflected in the provisions of the relevant CPR then in force, in particular, CPR Pt 44 (the regime). In the first two of the appeals, the trials involved an allegation that the publishers had libelled the respondents (Flood and Miller). In the third appeal, the trial involved allegations that the publisher had unlawfully gathered private information about the respondents by hacking into their phone messages (Frost). In each case, the publisher lost and was ordered to pay the respondents’ costs. In Flood, the Court of Appeal, Civil Division, dismissed the publisher’s appeal and it appealed to the Supreme Court. In Miller and Frost, leapfrog certificates were granted.

The issues for determination were, first, whether, as the publishers contended, the domestic law should reflect the decision of the European Court of Human Rights (ECtHR) in MGN Ltd v United Kingdom ((2011) 29 BHRC 686) (MGN), to the extent of laying down a general rule (the rule). The rule was that, where a claim involved restricting a defendant’s freedom of expression, at least where the defendant was a newspaper or broadcaster, it would, as a matter of domestic law, normally infringe the defendant’s rights under art 10 of the European Convention on Human Rights to require it to reimburse the success fee and after the event (ATE) insurance premium for which the claimant was liable under the regime. Further, whether a declaration of incompatibility should be made in relation to the regime or the costs regime which applied following subsequent legislation. Second, whether the effect of the rule should be that the costs orders made in Miller and Flood had to be amended to exclude the publishers paying the success fee and the ATE premium for which the respondents were liable. Third, whether the rule could be relied on by the publisher in Frost, so that the orders for costs against it should be amended to exclude any liability for the respondents’ success fees and ATE premiums. Fourth, whether the judge’s decision to award Flood all his costs of the proceedings, other than those which had already been awarded or agreed, had been a permissible exercise of her discretion. Consideration was given to art 1 of the First Protocol to the Convention (A1P1).

The appeals would be dismissed.

(1) Even if the rule applied, so that it would normally infringe a publisher’s art 10 rights to require it to reimburse the respondents’ success fee and ATE premium under the regime in a case involving freedom of expression, the orders for costs made in the three cases should not be varied to remove the publishers’ liability for the respondents’ success fee and ATE premium. In those circumstances, it would not be appropriate to express a concluded view on the first issue because the party who would be, at least potentially, most detrimentally affected by the decision was not before the court. That party was the UK government. If it were to be concluded that the rule was part of domestic law, it would not technically bind the government, but it would make it difficult for the government to re-open the question in the country and it could make it more difficult for the government to challenge the conclusion and reasoning in MGN in the ECtHR. There was force to some of the arguments for refusing to follow the ECtHR’s decision. However, the point would be left open and the remaining art 10 issues would be proceeded with on the assumption that MGN should be followed and so the rule did apply. Further, although not asked to make a declaration of incompatibility, a decision that the rule applied but could not assist the publishers in the three appeals could have consequences on the government and it was required to be notified if a declaration of incompatibility was sought in any proceedings. It would be inappropriate to grant a declaration of incompatibility. It would not be right to grant such a declaration in relation to the regime because it had been superseded by other legislation. It would plainly be inappropriate even to consider making a declaration of incompatibility in relation to those subsequent statutes, as their effect did not need to be, and had not been, considered in any detail in order to dispose of the appeals (see [29], [41], [64] of the judgment).

Campbell v MGN Ltd [2005] 4 All ER 793 considered; MGN Ltd v United Kingdom (2011) 29 BHRC 686 considered; Coventry v Lawrence [2016] 2 All ER 97 considered.

(2) Not all retrospective deprivations of accrued rights would offend A1P1. The question of proportionality would normally arise and that typically involved balancing the demands of the general interest of the community and the requirements of the protection of the individual’s fundamental rights  (see [48] of the judgment).

With respect to Miller and Flood, proceeding on the basis that, if the rule applied as a matter of domestic law, the publishers would, in the absence of a good reason to the contrary, be entitled to require the costs orders to be amended so as to remove the success fee and the ATE premium from the scope of those orders. In that connection, it would not simply be a plain injustice on Miller to deprive him of the ability to recover the success fee and the ATE premium. It would infringe his rights under A1P1 and that was a factor which could, and which had to, be taken into account when considering how to dispose of the appeal. It was difficult to see how Miller’s A1P1 claim could be defeated.

Upholding the costs order would infringe the publisher’s art 10 rights for the reasons given in MGN and would, therefore, involve an injustice, but amending that costs order in the way sought by the publisher would, not only involve an infringement of Miller’s A1P1 rights, it would undermine the rule of law. To refuse the costs order which Miller sought would directly infringe the fundamental principle of any civilised system of government, that citizens were entitled to act on the assumption that the law was as set out in legislation, especially when its lawfulness had been confirmed by the highest court in the land, secure in the further assumption that the law would not be changed retroactively.

While freedom of expression was, of course, another fundamental principle, it was not so centrally engaged by the issue in the present case. The decision in MGN was essentially based on the indirect, chilling, effect on freedom of expression of a very substantial costs order. It appeared to follow that the just and appropriate order was to dismiss the publisher’s appeal because to allow the appeal would involve a graver infringement of Miller’s rights than the infringement of rights which the publisher would suffer if the appeal was dismissed. Accordingly, in the present case, either Miller or the publisher had to suffer an injustice, including infringement of convention rights, and it was clear that it should be the publisher that suffered, as the injustice on Miller would be significantly more substantial. Although having concentrated on Miller, those comments applied equally to Flood (see [30], [44], [46], [53], [54], [56] of the judgment).

Coventry v Lawrence [2016] 2 All ER 97 applied.

(3) Notwithstanding the decision in MGN, the regime had been lawful in domestic terms and, with all its flaws, it represented the domestic policy whereby citizens could get access to the courts to vindicate their civil legal rights. Parliament could have enacted that decisions of the ECtHR had direct effect on UK law, but for good reasons it had not done so. Further, when it came to a costs order in a successful claim against a media organisation in proceedings where the regime applied, there were two applicable principles in play. The first was that, where art 10 was not engaged, there was normally no convention basis for refusing to order an unsuccessful defendant to reimburse the claimant’s success fee and ATE premium. The second principle was that, in such proceedings where art 10 was engaged, the rule applied and so it was normally a breach of such a defendant’s convention rights if he was required to pay the success fee and ATE premium. It could not be accepted that the principle that the most careful scrutiny of the court was called for when measures taken by a national authority were capable of discouraging the participation of the press in debates over matters of legitimate public concern, applied in relation to claims based on a defendant’s unlawful hacking and blagging of the phone records of individuals (see [57], [59], [63] of the judgment).

With respect to Frost, the respondents’ argument to the same effect as Miller was weaker in that they had all entered into conditional fee agreements (CFAs) and had taken out ATE insurance after publication of the judgment in MGN. Despite that, the same conclusion would be reached. However, there was another, more fundamental, reason why it was not open to the publisher to rely on the rule when it came to the costs orders in Frost. In order to rely on the rule, the publisher would have to establish that the principle laid down in MGN applied in cases where information was obtained illegally by or on behalf of a media organisation. Although, it would be accepted that art 10 was engaged in such a case, it could not be accepted that the rule could have any application, at least on facts such as those in Frost. In Frost, the court was not merely concerned with the complaint that the publisher had published, or threatened to publish, information which had infringed the respondents’ privacy rights. It was also concerned with the complaint that the information in question had been obtained unlawfully by or on behalf of the publisher. It would be accepted that the present was a case in which the publisher’s rights were engaged, in the sense that an aspect of the complaints of most of the respondents was that their private information had been published in its newspapers. However, to treat the case as one where the publisher’s art 10 rights were, not merely engaged, but should be given anything like the sort of weight which they had been given in MGN was quite unrealistic.

The fundamental complaint of all the respondents was that their phone records had been unlawfully hacked or blagged by the publisher’s agents on a persistent and systematic basis. There could be no suggestion of the publisher or its agents even having hoped, let alone intended or expected, that the end would justify the means, as might be the case where unlawful means were used in the expectation, or even the reasonable hope, that it might yield information which it would be in the public interest to reveal. The courts had to be careful before deciding that a particular case of such kind involved news-gathering of a nature so extreme as to lie outside the territory which should be subject to the rule. However, bearing in mind the persistence, pervasiveness and flagrancy of the hacking and blagging, and the lack of any public significance of the information which it would be expected to and had revealed, the present case was not one where the rule could properly be invoked by the publisher (see [57], [58], [60], [62], [63] of the judgment).

(4) In Flood, the Court of Appeal had been correct in having held that the judge had made no error in her decision. She had clearly been right to start with the proposition that the prima facie position had been that, as Flood had been the winner, he ought to get his costs. However, the judge had rightly acknowledged that was only the starting point. Therefore, it was necessary to consider whether any of the points raised on behalf of the publisher justified its contention that the judge could not reasonably have refused to depart from that starting point. First, the freedom of expression, important though it undoubtedly was, could not assist the publisher in its challenge to the unqualified order for costs made in Flood’s favour. Second, the parties’ correspondence did not assist the publisher’s challenge to the award of costs. Third, as to the success of one of the publisher’s defences, it had failed in part and the costs of arguing that defence would have been incurred anyway. Finally, although Flood had only been partially successful, the judge had been entitled to resolve to award costs on the basis that he had been the overall winner, rather than making an issues-based order (see [67], [68], [70], [72]-[74] of the judgment).

Decision of Court of Appeal, Civil Division,  [2014] All ER (D) 58 (Dec) Affirmed.

Decision of Mitting J  [2016] All ER (D) 275 (Feb) Affirmed.

Decision of Mann J [2016] All ER (D) 127 (Apr) Affirmed.

Richard Rampton QC and Kate Wilson (instructed by Bates Wells & Braithwaite London LLP) for the publisher in the first appeal.

Gavin Millar QC and Ben Silverstone (instructed by Reynolds Porter Chamberlain LLP) for the publisher in the second appeal.

Lord Pannick QC and Jamie Carpenter (instructed by Reynolds Porter Chamberlain LLP) for the publisher in the third appeal.

James Price QC and William Bennett (instructed by Edwin Coe LLP) for Flood.

William McCormick QC and James Laughland (instructed by Simons Muirhead & Burton LLP) for Miller.

Hugh Tomlinson QC, Simon Browne QC and Jeremy Reed (instructed by Atkins Thomson Ltd) for Frost.

Karina Weller   Solicitor (NSW) (non-practising).