The Ministry of Justice has introduced new rules aimed at cutting ‘spiralling’ legal costs in defamation proceedings by making changes to the rules for ‘no win, no fee’ arrangements.

However, justice secretary Jack Straw has for the moment ruled out limiting recoverable hourly rates, or introducing mandatory cost-capping (or its mandatory consideration). The latter were among proposals contained in the MoJ’s February consultation on the issue (see [2009] Gazette, 5 March, 10).

Under changes introduced this week, early notice must be given to the publisher if after the event (ATE) insurance has been taken out. Defendants will be given a 42-day ‘cooling-off period’, where if they admit liability and this leads to a settlement, the defendant will not have to pay the ATE premium. A mandatory cost budgeting pilot will also be implemented for defamation proceedings.

Straw said: ‘Spiralling costs and disproportionate legal fees are too often a feature of defamation proceedings.’