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March 3, 2010

CFA success fees to be restricted

Category: News

Justice Secretary announces new measures on defamation CFAs to take effect in April


Justice Secretary Jack Straw has announced measures to reduce the success fees that lawyers can charge in no-win, no-fee defamation cases from 100% to 10%.

An amendment to the Conditional Fee Agreements Order 2000 is laid by Statutory Order today and would come into effect from April this year. It is intended to prevent legal costs in defamation cases spiralling out of control and follows the consultation Controlling costs in defamation proceedings, which was published by the Ministry of Justice in January this year 

Jack Straw said: "Reducing the success fees charged by lawyers in no-win, no-fee defamation cases will help level the playing field so that scientists, journalists and writers can continue to publish articles which are in the public interest without incurring such disproportionate legal bills. This is particularly important for ensuring open scientific exchange and protecting the future of our regional media, who have small budgets but play a large role in our democracy. 

"The Statutory Order I am laying today reduces the maximum success fee from 100% to 10% rebalancing the system so it is affordable for the press to defend defamation cases, whilst still ensuring access to justice for those who feel they have been defamed.

"This is a swift solution to an immediate problem, a problem which has been recognised by the Science and Technology Committee and the Culture Media and Sport Committee, as well as by Lord Justice Jackson in his wide ranging ‘Review of Civil Litigation Costs’.

"Both Lord Justice Jackson’s report and the Culture, Media and Sport Committee’s reports were thorough and well considered, highlighting the need to reduce the 100% success fees in defamation cases. Their recommendations warrant careful consideration and I will be closely studying their proposals over the coming months.

"In the meantime, the steps I am taking today to reduce the success fee to 10%, should go a long way towards securing the freedom of scientific exchange and our tradition of investigative journalism, which are so fundamental to the protection of our democracy in this country."

The media have hailed the new measures as a victory for press freedom.  However, some commentators have raised concerns as to their effect on access to justice, in that they are likely to reduce the prospects of meritworthy claimants (and defendants) who are unable to privately fund litigation from obtaining legal representation.