Defamation – Libel – Costs – Conditional fee agreement – Staged success fee – Whether amount of success fee sought reasonable – Proportionality – Whether overall fees claimed reasonable
C sued D over allegations made in an interview by Jodie Marsh, his former wife, published in ‘Celebs on Sunday’, a colour supplement published by D and sold with editions of the Sunday Mirror newspaper. Efforts were made to settle the matter before issuing of proceedings, but were unsuccessful. Proceedings were issued on 2 September 2008. C’s lawyers were funded on a conditional fee agreement with staged success fee. There was also an insurance policy. A defence was served on 24 October 2008. In April 2009 applications came before Eady J. C applied to strike out parts of the Defence. D applied for a costs capping order. Both applications failed. The parties proceeded towards trial before settlement was reached with D agreeing to pay C £15,000 in damages; undertaking not to repeat the allegations; and C be permitted to read a statement in open court. D also agreed to pay C’s costs on the standard basis to be assessed if not agreed.
At the costs assessment D challenged the overall proportionality of the fees claimed and the amount of the success fee.
(1) Whether the overall costs were disproportionate;
(2) Whether the success fee should be reduced.
(1) The fees overall – which did not, as a matter of law, include the success fee and the insurance premium – were not disproportionate. C had made early offers which D could have accepted but did not do so, instead settling much later and close to trial for more than C had originally asked for. In such circumstances, the overall base costs incurred were not disproprotionate.
(2) The decision to enter into staged success fees which allowed for a 100% success fee 28 days after service of the defence was reasonable. At the time of signing the CFAs, both Solicitors and Counsel had known the stance D was going to take and the outcome would be a straightforward fight to decide whether C or Miss Marsh was telling the truth, a decision which would be determined by a jury.
The decision on proprotionality was ex tempore. D asked for reasons on the success fee issue which were handed down later. The judgment usefully sets out the law on the principles to apply when deciding the level of a success fee. With the government indicating that it will implement the Jackson Report, at least in part, how long it will remain the law is anyone’s guess.
