The government has decided not to push ahead with imposing fixed recoverable success fees and capped recoverability on after-the-event insurance (ATE) premiums in defamation and privacy cases.

After eight months of waiting for an announcement following its defamation consultation last year, the government has opted to promote a revised model scheme that litigants can adopt on a voluntary basis – with success fees and premiums stepped in relation to how quickly the case is concluded.

The Ministry of Justice (MoJ) said it would be ‘unrealistic’ to take the scheme any further until the results of a separate scoping study of ‘no win, no fee’ agreements are known.

Announced last month, the study is to consider whether such agreements are still an effective means of ensuring access to justice in the personal injury, employment and defamation/privacy fields (see [2008] Gazette, 3 July, 3).

Some 22 media groups jointly responded to the defamation consultation and called for the MoJ to go further than the proposals, and some observers believe it was their concerns that prompted the study.

The media argues that the cost of success fees and ATE premiums has a ‘chilling effect’ on freedom of expression. Claimant lawyers say they facilitate access to justice.

Alastair Brett, Times Newspapers’ legal manager, described the voluntary scheme as ‘a step in the right direction’, but added: ‘The government still needs to make all costs at the end of any action that engages article 10 [freedom of expression] rights reasonable and proportionate.’

Nigel Tait, a partner at top defamation firm Carter-Ruck, said the decision not to press ahead was sensible in light of the scoping study as the media's concern with costs ran wider than success fees and ATE premiums. ‘I have been conducting defamation litigation for 20 years and almost every single reform in this area during that time has led to an increase in the costs and complexity of libel proceedings,’ he added.