Reference:  EWHC 1312 (QB)
Court: Queen's Bench Division
Judge: Eady J
Date of judgment: 9 Jun 2003
Summary: Defamation - libel - civil procedure - Conditional fee arrangements - Human Rights - Articles 6, 10 - justification - whether it was permissible to justify the meaning that the police suspected the claimant of involvement in terrorist offences
Instructing Solicitors: Farrer & Co for the Defendant
The Claimant brought proceedings for defamation in respect of two articles published by the defendant which alleged that he was under investigation by the police for a terrorist offence. The Claimant was funding the litigation by way of a CFA and did not have ATE insurance. The defendant applied to strike out the claim as an abuse of process, and/or for summary judgment on the grounds that the claimant had no realistic prospect of defeating the justfication and qualified privilege defences; or alternatively for a conditional order staying proceedings until a payment by way of security for costs had been made. The claimant sought to strike out those parts of the defence which sought to justify a meaning that the police suspected the claimant of an offence, as distinct from there being reasonable grounds for that suspicion, and claimed that any order for security for costs would amount to a denial of access to court.
(1) Whether it was permissible to justify the meaning that the police suspected the claimant of involvement in terrorist offences; (2) whther there was any action which the court could take to prevent a potential violation of the defendant’s right to freedom of expression by the ultimate award of unrecoverable costs which were disproprotionate to the aim of protecting the claimant’s reputation.
(1) The defence of justification depended on establishing at least reasonable grounds to suspect the claimant of involvement in terrorist activity. This had to be assessed from an objective standpoint and the claimant could rely upon facts outside the defendant’s knowledge at the time of publication. The relevant passages in the defence offended the repetition and conduct rules and were struck out. (2) The court should not be drawn into assessing the merits of a case beyond the test required for summary judgment. It was not appropriate to order security for costs and it was difficult to see how a judge at this stage of the proceedings could have any impact on the discretion of the trial judge on costs. There were matters requiring investigation and cross-examination in repsect of both defences and the claim could not be said to have no reasonable prospects of success.
This case challenged for the first time the propriety of funding defamation litigation on a CFA without ATE insurance where the prospects of success were less than 50%. In such circumstances the defendant has a huge incentive to settle the proceedings for a small sum even where it has good prospects of successfully defending the action. In the particular circumstances of defamation, potential awards of high sums of unrecoverable costs have a chilling effect on the defendant’s right to freedom of expression which need to be balanced against the claimant’s right of access to court. This case has now been appealed and although the application for security for costs was not pursued, the Court of Appeal has approved a cost-capping arrangement to be used in similar cases in the future to prevent, as far as possible, this abuse from occuring. See  EWCA Civ 613