Bumper success fees for lawyers in libel cases will soon be a thing of the past following last week’s ruling by the European Court of Human Rights (ECHR) in the Naomi Campbell case, solicitors predicted this week.

Kevin Bays, partner at London firm Davenport Lyons, who advised Mirror Group Newspapers (MGN) throughout its litigation with Campbell, said that the ECHR has found the English system of conditional fee agreements (CFAs) to be ‘deeply flawed’.

The ECHR ruled unanimously that the success fee charged to MGN, publisher of the Daily Mirror, for losing a privacy case brought by Campbell, violated its freedom of expression rights. Campbell’s lawyers, London firm Schillings, billed MGN £850,000 in legal fees, including a success fee of £365,000. Campbell was awarded only £3,500 in damages. The parties reached a costs settlement of £500,000.

CFAs currently allow winning parties to recover success fees from losing parties, but the government recently proposed ending this recoverability, as recommended by Lord Justice Jackson in his report on civil litigation costs. The government wants instead to increase general damages by 10% in cases funded by CFAs; allow lawyers to share up to 25% of overall damages; and pay lawyers proportional base costs.

‘The decision simply confirms what the media has been saying for years – recoverable success fees are totally disproportionate and a violation of the right to freedom of speech,’ said Bays. ‘It’s a pity there has had to be a public finding of a breach of human rights before the government scraps the current deeply flawed CFA regime.’

Nigel Tait, partner at London firm Carter-Ruck, said that MGN’s victory would bring about the end of 100% success fees for law firms in libel cases, but warned that the government’s proposals to end recoverability are unworkable.

He told the Press Association: ‘In a heavily fought and ultimately unsuccessful case brought under a CFA… the lawyers could lose hundreds of thousands of pounds without any hope of recouping such losses. They will soon start refusing to do CFA work in this field unless there is some recoverable success fee, albeit not at 100%.

‘It would not have been economic for Ms Campbell’s lawyers to take the case on a "no win, no fee" basis, nor for Ms Campbell to bring the action on a privately paying basis.’

Schillings partner Gideon Benaim said the ECHR decision would have no bearing on the facts of Campbell’s case, which ended ‘long ago’, but added that he believed it ‘will [effect] access to justice’ in future cases.