In a judgment handed down last Wednesday, 23 July, the Supreme Court said it was open to the Court to reconsider whether a claimant’s right to recover a conditional fee agreement (CFA) success fee and after-the-event (ATE) insurance premium from an unsuccessful defendant breached the defendant’s right to a fair trial under Article 6 of the European Convention on Human Rights: Coventry and others (Respondents) v Lawrence and another (Appellants) (No 2)[2014 UKSC 46. However, it would be wrong to decide the point without the government having had the opportunity to make submissions.

A Supreme Court finding of infringement could have very serious consequences. Although recoverability was abolished from 1 April 2013 as a result of the Jackson reforms, it still applies to CFAs and ATE policies entered into before that date, as well as certain other excepted cases such as claims brought by insolvent companies. In any event, such a decision could give rise to claims for compensation against the government by litigants who had been “victims” of recoverable success fees and ATE premiums in historic cases.

The Court noted that the case for an infringement gained some support from Strasbourg jurisprudence including MGN v UK (2011) 53 EHRR 5 (see post) in which the European Court of Human Rights held that the requirement for MGN to pay CFA success fees due to Naomi Campbell’s lawyers was incompatible with MGN’s right to freedom of expression under Article 10. It noted however that the present case differed in that Article 10 did not apply (the underlying claim was for nuisance arising from use of a racetrack near the appellants’ property) and, unlike Naomi Campbell, the appellants needed the protection of a CFA and ATE premium in order to be able to bring their claim.

The appeal is to be re-listed for a further hearing after notice has been given to the Attorney-General and the Secretary of State for Justice. It is not clear whether the point will be decided at that hearing or whether the issue will be remitted to the Court of Appeal or a first instance judge. Once all the interveners are identified, they will be expected to try to agree an appropriate procedure and then contact the Court for directions.