The Supreme Court has held by a majority that parts of the costs regime introduced by the Access to Justice Act 1999 (AJA) (now repealed) and, in particular, a claimant's right in principle to recover a success fee and After the Event (ATE) insurance premium from an unsuccessful defendant, did not infringe either Article 6 or Article 1 of the First Protocol to the ECHR. The regime under the AJA had its flaws but it was not a disproportionate way of achieving the legitimate aim of access to justice.
The claimants succeeded in their nuisance action and were awarded damages of £20,750 and an injunction. The defendants were ordered to pay 60% of the claimants' costs on the standard basis. However, the claimants' lawyers were retained using a conditional fee arrangement which resulted in the defendants being potentially liable for 60% of a success fee and an ATE insurance premium. Their 60% share of those amounted to over £300K, in addition to their liability for over £180K base costs.
The defendants accepted their liability for the claimants' base fees. However, they challenged the liability to pay the success fee and ATE premium under the AJA regime on the basis that this would unjustifiably interfere with their rights under Article 6 of the Convention (right to a fair trial), and/or Article 1 of the first protocol to the Convention (A1P1) (peaceful enjoyment of possessions). Their submissions were based on MGN v United Kingdom, a 2011 case, in which the European Court of Human Rights had ruled that a regime that allowed the recoverability of a success fee by a wealthy claimant (the model Naomi Campbell) infringed the Article 10 ECHR rights (freedom of expression) of the newspaper defendant.
Neuberger and Dyson LJJ, giving the leading judgments, considered the scope of MGN v United Kingdom, but rejected the submission that this case also required a finding that the pre-Jackson costs regime was incompatible with Article 6. The MGN decision concerned Article 10 which is "always given particular weight by the ECtHR" and the balancing exercise in this case was "of a wholly different character":
"In our judgment, there is a powerful argument that the 1999 Act scheme is compatible with the Convention for the simple reason that it is a general measure which was (i) justified by the need to widen access to justice to litigants following withdrawal of legal aid; (ii) made following wide consultation; and (iii) fell within the wide area of discretionary judgment of the legislature and rule-makers to make."
The decision maintains the status quo. It is of most importance for the limited types of claim in which success fees and ATE premiums are still recoverable, and to which the pre 1 April 2013 costs regime still applies, namely publication, privacy, insolvency and mesothelioma cases.
Coventry v Lawrence, Supreme Court, 22 July 2015