A defendant arguing that costs recoverability rules breach human rights legislation will take the case on to the Supreme Court.

In 8 Representative Claimants & Ors v MGN Ltd, the Court of Appeal this week ruled that additional liabilities in defamation or privacy cases were not incompatible with article 10 (freedom of expression) of the European Convention on Human Rights.

The eight phone-hacking victims had won their case at trial last May and were entitled to recover £1.4m in success fees and £632,000 in after-the-event insurance premiums.

In 12 further settled phone-hacking cases, the success fees were more than £600,000 and insurance premiums more than £200,000.

Recoverability of success fees and ATE insurance were abolished in April 2013, but the change of regime did not apply to defamation and privacy cases.

Newspaper publisher MGN had sought to argue the court should refuse to enforce the liabilities as the costs regime for CFAs and ATE insurance was unlawful.

MGN’s lawyers argued that the huge additional expense caused by additional liabilities unlawfully interferes with its right to free expression.

They said the UK was and remains in breach of its treaty obligations by failing to prevent recovery, and the court should declare any relevant primary legislation to be incompatible with the convention.

But Mr Justice Mann rejected that argument and said the costs scheme was not inconsistent with European rules. ‘Insofar as that conclusion is or might be wrong, MGN is not entitled to rely on any incompatibility to resist recovery of success fees in relation to the eight cases,’ said Mann.

A similar point arose last month in Miller v Associated Newspapers Limited, when the Daily Mail asked for a ruling on the recoverability regime. That case will go to the Supreme Court to resolve the issue, and MGN has also said it will seek to appeal to the highest court.

Mann said he would entertain an application for an appropriate certificate for a leapfrog appeal in this case after the handing down of the judgment.