'Success fees and ATE insurance premiums should cease to be recoverable'
Lord Justice Jackson’s review of the rules and principles governing costs in civil litigation was published today. The report makes a number of important recommendations – most notably, that lawyers’ success fees and ATE insurance premiums should cease to be recoverable for all types of civil litigation.
With respect to defamation and related claims, Lord Justice Jackson was particularly concerned that the widespread use of CFAs with ATE insurance was imposing a disproportionate costs burden on defendants. In assessing the current recoverability by claimants of ATE insurance premiums and adverse costs, he stated that "the present system for achieving costs protection for claimants is, in my view, the most bizarre and expensive system that it is possible to devise."
He made a number of other specific recommendations, which sought to strike a balance between access to justice for claimants with slender means and disproportionate costs burdens on defendants:
- increasing the general level of damages in defamation and breach of privacy proceedings by 10%;
- introducing a regime of qualified one way costs shifting, under which the amount of costs that an unsuccessful claimant may be ordered to pay is a reasonable amount, reflective of the means of the parties and their conduct in the proceedings; and
- amending the Defamation Pre-action Protocol by requiring the claimant to identify in the Letter of Claim the meaning(s) he/she attributes to the words complained of.
The report also considered the question of whether the use of juries in defamation actions was still appropriate, concluding that:
"If costs are now regarded as a serious impediment to access to justice in the field of defamation, then there is an argument for saying that all trials should be by judge alone. At this stage I do not go that far. Instead, I recommend that, after proper consultation, the question whether to retain trial by jury in defamation cases be reconsidered."