In a judgment released in January, the European Court of Human Rights held that the requirement for MGN to pay "success fees" due to Naomi Campbell's lawyers under a Conditional Fee Agreement was incompatible with MGN's right to freedom of expression under Article 10.

The case followed Campbell's well-publicised breach of privacy action against MGN, as publisher of The Daily Mirror, in respect of articles and photos relating to her drug addiction and treatment. Campbell ultimately won the action in the House of Lords and was awarded damages of £3,500 as well as her legal costs. The costs claimed amounted to over £1 million, including success fees of approximately £280,000 for the House of Lords appeal, which was conducted by solicitors and counsel under a CFA (with success fees agreed at 95% and 100% respectively).

MGN challenged payment of the success fees before the House of Lords, arguing that the liability was so disproportionate as to infringe its Article 10 rights. The appeal was dismissed on the basis that the CFA regime represented a proportionate measure to provide access to justice, having regard to its effect on Article 10 rights.

MGN then brought its complaint before the ECHR, which held unanimously that there was a violation of Article 10. Although the CFA regime served the legitimate aim of promoting access to legal services, it was not a proportionate means of achieving that aim and therefore was not "necessary" for the purposes of Article 10. The ECHR took into account Lord Justice Jackson's criticisms of the CFA regime and the fact that the Ministry of Justice had accepted those criticisms, particularly in defamation and privacy cases, but failed to take action to implement changes.

The judgment does not address the lawfulness of the CFA regime outside the context of defamation and privacy cases, where Article 10 rights do not come into play. However, it will no doubt add support to the calls for an end to the recoverability of success fees and ATE premiums more generally, as recommended by Lord Justice Jackson. The decision is timely, given the government's ongoing consultation on this issue which closed on 14 February (see our e-bulletin of 16 November 2010).