Coventry and others v Lawrence and another [22.07.15]

The Supreme Court has handed down its much anticipated judgment in the case of Coventry v Lawrence [2014]. Confirming the flaws of the previous scheme of recovery of additional liabilities under the Access to Justice Act 1999 (the 1999 Act), it held that the system was nonetheless compatible with the European Convention on Human Rights (ECHR).

Comprised of seven Law Lords, including President and Deputy President Lord Neurberger and Lady Hale, the Supreme Court heard from no less than 15 counsel representatives of the parties. The Court had little choice but to acknowledge the unfortunate irony of this being the third judgment of the court; no doubt compounded by the fact that the damages awarded in the original claim amounted to a modest sum of £20,750.

With Lord Neuberger delivering the lead judgment, the Court accepted that in a number of individual cases, the 1999 Act scheme might have interfered with a defendant’s right of access to justice. However, it is vital to look at the scheme as a whole. The system had a legitimate aim and as such, it was not incompatible with Article 6 ECHR and/or Article 1 First Protocol.

The Court held:

  • Of the four “unique and regrettable features” of the 1999 Act scheme, it is the third flaw that lies at the heart of this case. Best described as the “blackmail” or “chilling” effect – imposing a costs burden on opposing parties which is excessive and in some cases amounts to a denial of justice. Does this flaw render the 1999 Act scheme incompatible with the ECHR?
  • The issue is not whether the system was unfair or had flaws but whether it was a disproportionate way of achieving a legitimate aim.
  • The 1999 Act scheme was (i) justified by the need to widen access justice following the withdrawal of legal aid for most civil cases (ii) made following wide consultation and (iii) fell within the discretionary judgment of Parliament and rule-makers to make.
  • It is important not to confuse two different meanings of proportionality which lie at the heart of this case:
    • The first meaning of proportionality within the context of the ECHR involves a value judgment at the stage at which a balance has to be struck between the importance of the objective pursued and the value of the right intruded upon. In this instance, the concept focuses on the balance that is struck by the 1999 Act system between the rights of different types of litigants.
    • The second meaning of proportionality finds expression in the CPR and is relevant to the assessment of costs. The introduction of additional liabilities – and the recovery thereof – made the proportionality issue more acute.
  • A decision to declare the 1999 Act scheme was incompatible with the ECHR would have a serious impact on many thousands of pre-April 2012 cases which are in run-off, as well as claims to which the pre-Jackson costs continue to apply, such as mesothelioma.
  • No costs system is perfect. The current LASPO scheme (which replaced the 1999 Act system) is fairer but it is impossible to devise a scheme that promotes complete access to justice for all litigants.

The point about proportionality is noteworthy. In our experience of dealing with the assessment of additional liabilities, judges are remarkably consistent in their acceptance that success fees and ATE premiums should never be taken into account for proportionality purposes. The judgment can only serve to strengthen this approach.

The Court also rejected the suggestion that the 1999 Act scheme should have been limited to defined categories of rich litigants and was incompatible with the ECHR by virtue of not taking into account the paying party’s financial circumstances in the assessment of total costs.

Appeal dismissed by a majority of five (Lord Clarke and Lady Hale dissenting).