The Supreme Court has expressed ‘grave concern’ over the ‘exorbitant’ cost of litigation for ordinary citizens in a ruling that suggests the pre-Jackson costs regime may breach article 6 of the European Convention on Human Rights.
Coventry v Lawrence (No 2)  UKSC 46 concerned a claim for nuisance by the appellants Katherine Lawrence and Raymond Shields, owners of a residential bungalow, against the occupiers of a stadium some 850 yards away used for speedway and other motor racing.
The Supreme Court had previously determined that the owners David Coventry, trading as RDC Promotions and a track Moto-Land UK, were liable to the home owners, reversing the decision of the Court of Appeal and re-instating the first instance decision.
It ordered the two defendants to pay 60% of the appellants’ trial costs, totalling £640,000 – more than half of which was for the no win, no fee uplift and after-the-event insurance premium.
The president of the Supreme Court Lord Neuberger (pictured) said: ‘These figures are very disturbing. They give rise to grave concern even if one ignores the success fee and ATE premium.
‘The fact that it can cost two citizens £400,000 in legal fees and disbursements to establish and enforce their right to live in peace in their home is on any view highly regrettable.’
Neuberger continued: ‘The point can equally forcefully be made from the point of view of the respondents. As relatively small business operators, they are not only having to fund their own costs, which presumably would be of the same order, but in addition they are going to have to pay some £240,000 towards the appellants’ costs.
‘It is true that the respondents lost, but they were seeking to defend their businesses and they plainly had a reasonable case, as is evidenced by the fact that they won in the Court of Appeal.’
Neuberger said the Civil Procedure Rules had tried to ‘achieve a better relationship between the costs and benefits of litigation’ but added ‘as the figures in this case show… that target has not merely proved elusive, but it is often missed by a very wide margin indeed.’
He acknowledged how hard it is to ‘ensure that a case, particularly one that does not involve a very large sum of money but is potentially complex in terms of fact, law and expertise’ is both ‘properly and proportionately’ litigated.
But he said: ‘It would be wrong for this court not to express its grave concern about the base costs in this case, and express the hope that those responsible for civil justice in England and Wales are considering what further steps can be taken to ensure better access to justice.’
Welcoming the costs provisions introduced by the Legal Aid, Sentencing and Punishment of Offenders Act 2012 following the Jackson review of civil litigation, Neuberger said the sums involved in the current case illustrate the ‘malign influence’ of now repealed amendments made to the Courts and Legal Services Act 1990.
The respondents argued that the requirement to pay 60% of the success fee and ATE premium under the pre-Jackson costs regime would breach their rights under article 6 of the ECHR, and the court agreed the court should consider the contention.
Neuberger said: ‘In light of the facts of this case and the European Court of Human Rights jurisprudence, it may be that the respondents are right in their contention that their liability for costs would be inconsistent with their convention rights.’
He recognised that a determination by a UK court that the provisions of the Access to Justice Act infringed article 6 could have ‘very serious consequences for the government’, as litigants ‘could well have a claim for compensation against the government’ for the infringement.
Therefore he said: ‘If the respondents wish to maintain that contention, as they are plainly entitled to do, the present appeal should be re-listed for hearing before us, after appropriate notice has been given to the attorney general and the secretary of state for justice.
He added: ‘I am very concerned indeed about the possibility of a further escalation in the already exorbitant costs in this case. If I was satisfied that there was any satisfactory way of proceeding without incurring the parties in further costs, I would eagerly grasp it, but, sadly, I cannot see any such course.