Cost-capping orders including any uplift should be introduced in libel cases involving a conditional fee agreement, where the claimant is not backed by after-the-event insurance, the Court of Appeal has ruled.

In King v Telegraph Group, Lord Justice Brooke said the pressure on defendant newspapers to settle cases because they knew they would not recover their costs even if they won would have a 'chilling effect' on their freedom of expression.

London firm Peter Carter-Ruck & Partners, acting for the claimant, welcomed the court not making insurance or security for costs compulsory.

'We believe we have nothing to fear from costs judges,' a spokesman said.

The court criticised Carter-Ruck's aggressive conduct of the case, which it said on occasion was 'wholly incompatible with the philosophy of the Civil Procedure Rules'.

The firm's spokesman said it had taken on board the criticisms but would not comment further as the full trial begins shortly, after the court rejected various defence applications.