Following a three day hearing in the matter of Coventry & others –v- Lawrence & another, the Supreme Court has now handed down its eagerly awaited judgment as to whether the conditional fee agreement funding regime (“the CFA regime”) was incompatible with article 6 of the Human Rights Act, namely the right to a fair trial.

This case involved a matter in which the claimants bought proceedings for damages and an injunction in relation to the noise caused by a speedway next to their property. The claimants were awarded damages in the sum of £20,750 together with the requested injunction. The court also awarded the claimants 60% of their costs, which included a success fee and ATE premium (”additional liabilities”) totalling over £520,000. As per the Access to Justice Act 1999, these additional liabilities were recoverable from the defendant.

The defendant argued that these additional liabilities were so onerous that, if they were liable for them, they would infringe their rights to a fair trial.  If this was the case, the CFA regime would be incompatible with the European Convention on Human Rights (commonly known as the Human Rights Act).Specifically, the defendant suggested that the CFA would fall foul of  Article 6 and Article 1 of the First Protocol of the act (the right to a fair trial and an obligation to respect human rights respectively).

The matter was passed to the Supreme Court (on appeal) for consideration, where it  was heard by a panel of 7 Justices of the Supreme Court.  Given the importance of the decision, a number of interveners were heard, including representatives of the Law Society, the General Bar Council and the Association of Costs Lawyers.

By a majority of 5-2, the Court held that the CFA regime was compatible with the Human Rights Act.

Whilst the Court acknowledged that there were a number of flaws with the CFA regime, they ruled that overall the regime represented a proportionate way of achieving a legitimate aim. This decision was reached on the basis that the CFA regime:

  1. was justified by the need to widen access to justice to litigants following the withdrawal of legal aid
  2. was made following wide consultation; and
  3. fell within the wide area of discretionary judgment of the legislature and rule makers

Whilst it was acknowledged that the CFA regime could, in some circumstances, produce unfair results, this did not necessarily make it incompatible.  In any event, the discretion on costs exercisable by the judiciary allayed this problem to some extent.

Whilst the majority of cases now fall outside of the old CFA regime as a result of the Jackson reforms which came into place on 1 April 2013,  there are still a significant number of high value cases which commenced before this date that would have been affected by the ruling, together with a number of specialist areas in which additional liabilities remain recoverable between the parties.  There was also a suggestion, that, if the regime was declared incompatible, those who had paid additional liabilities under the old scheme may have been entitled to compensation. Given the potential value of such claims, and the effect of a declaration of incompatibility on ongoing matters, it is perhaps of little surprise that a decision that avoided this outcome was reached.

The defendants still have the option to take the matter to the European Court of Human Rights in Strasbourg, and it therefore remains to be seen if this is the definitive end to the matter.