UK: "No win, no fee" claims do not interfere with the media’s right to freedom of expression

The House of Lords on 20 October ruled on the latest instalment of the long-running dispute between Naomi Campbell and Mirror Group Newspapers ("MGN"). It held that allowing claimants to sue the media for defamation under conditional fee agreements ("CFAs") with their solicitors did not interfere with the media’s right to freedom of expression. CFAs are commonly known as "no win, no fee" agreements.

This ruling follows the decision by the House of Lords in 2004 that MGN breached Ms Campbell’s confidence by publishing photographs and additional details concerning the treatment she was receiving for her alleged addiction to drugs. The House of Lords ordered MGN to pay Ms Campbell’s costs. Her appeal to the House of Lords had been funded by way of a conditional fee agreement, with a 95-100% success fee. This meant that although her solicitors’ and counsels’ fees and disbursements came to around £300,000, nearly £600,000 could be claimed from the Mirror.

MGN sought a ruling from the House of Lords that it should not be liable to pay any part of the success fee on the ground that such a liability was so disproportionate as to infringe its right to freedom of expression under Article 10 of the European Convention on Human Rights. It argued that potential liability for such success fees could lead to a newspaper self-imposing restraints on publication and that it might also lead to media defendants being significantly tempted to pay up something to be rid of litigation for purely commercial reasons, without regard to the true merits of any pleaded defence. Naomi Campbell argued that conditional fee agreements were necessary to provide the access to the courts required by Article 6 of the Convention. MGN’s counter argument to this was that it was not necessary to give Ms Campbell access to a court because she could have afforded to fund her own costs, as, in fact, she had done at the original trial and in the Court of Appeal.

The House of Lords, in a five Law Lord ruling, unanimously held that the regimen of CFAs and the imposition of costs and success fees on the losing party is legislative policy which the courts must accept. In addition, they held that there was nothing in the relevant legislation which suggested that a solicitor, before entering into a CFA, must inquire into his client’s means and satisfy himself that he could not fund the litigation himself. The House of Lords recognised that CFAs could have something of a chilling effect on newspapers exercising their right to freedom of expression, but considered that if this were a problem, a legislative solution would be required.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

The original publication date for this article was 24/10/2005.