CFAs and ATE premiums out of the running in freedom of expression cases

11 April 2017

Supreme Court tips media organisations' Article 10 rights over obligation to pay claimants' additional liabilities in freedom of expression cases

In the case of Times Newspapers Ltd v Flood; Miller v Associated Newspapers Ltd; and, Frost and others v MGN Ltd [2017] UKSC 33, the defendant media organisations each brought an appeal to the Supreme Court in relation to the obligation that they pay additional liabilities in cases engaging their right to freedom of expression. The Court found infringements of the media's Article 10 rights in two of the three appeals, but nevertheless dismissed each of them.   

The arguments emanated from the 2011 decision of the European Court of Human Rights that MGN's Article 10 rights had been infringed by having to reimburse the supermodel Naomi Campbell the success fee incurred following her successful privacy and data protection claim over the 2001 publication of a photograph of her attending Narcotics Anonymous. This argument had previously been rejected by the House of Lords in 2005.

Notwithstanding this, publication and privacy claims were one of the very few categories of proceedings in which it had remained permissible, since the Legal Aid, Sentencing and Punishment of Offenders Act 2012 came into force on 1 April 2013, for successful claimants to recover success fees and ATE premiums under the Access to Justice Act 1999.

Associated Newspapers' appeal related to an order that they pay success fees of £587,000 and an ATE premium of £248,000 in addition to base costs to a claimant, Mr Miller, who had entered into the relevant agreements in 2009. He had been awarded £65,000 damages over a defamatory allegation that there were grounds to suspect his management consultancy had received public contracts as a result of "improper conduct and cronyism".

MGN's appeal related to the additional liabilities sought to be recovered by representative claimants in the phone hacking litigation, who had entered into the agreements between 2011 and 2014. These included the costs in the Court of Appeal, where sums of £645,799.88 and £318,000 were being sought to be recovered by the claimants in respect of success fees and ATE premium, respectively, in addition to base costs of £739,456.87.

Times Newspapers' appeal related to the order of Davies J that it should pay the costs, including additional liabilities, of proceedings brought by a Metropolitan Police officer concerning an allegation of possible corruption, notwithstanding that it had successfully advanced a Reynolds responsible journalism defence to a large part of the claim. These agreements had been entered into in 2007 and 2010.

Lord Neuberger, giving the judgment of the Court, opined that there was a very powerful argument for concluding that there is a general rule that, where a claim against a publisher involves a restriction on freedom of expression, as a matter of domestic law it would normally infringe the defendant's Article 10 rights to require it to pay additional liabilities incurred by a successful claimant pursuant to the Access to Justice Act 1999. However, on account of the UK Government not being a party to the proceedings, the Supreme Court declined to determine the issue. Nevertheless, it determined the appeals on the basis that such a rule did apply, making such an outcome the odds on favourite in any subsequent proceedings.

 Associated Newspapers was first out of the gates, with the Supreme Court concluding that upholding the costs order against it would infringe its Article 10 rights. But the Court went on to decide that to deprive Mr Miller of the costs for which he was, at least on paper, liable to his insurers and legal representatives would lead to an infringement of his property rights under Article 1 of Protocol 1. In something of a photo finish, the Supreme Court decided that Associated Newspapers' appeal ought to be dismissed because to allow the appeal would involve a greater injustice.

 Times Newspapers was saddled with the broad judicial discretion in relation to costs and the Supreme Court determined that the first instance judge had been entitled to award the Claimant costs as the overall winner, rather than taking an issue based approach. On the Article 10 issue, however, the Supreme Court considered that the Times was in the same position as Associated and an obligation to pay additional liabilities was an infringement of its Article 10 rights.

The Court considered MGN Ltd to be reined in by the unlawful conduct underlying the claims, which adversely affected the weight to be afforded to its  Article 10 rights, and disbarred it from relying on the principle that additional liabilities would constitute an infringement.

While each of the appeals was dismissed, claimants and their legal representatives would be blinkered if they considered that the Supreme Court had given the recovery of additional liabilities a clean bill of health in freedom of expression cases. It will be necessary for the Government to review its approach to enabling access to justice in media cases and remedy the infringements in these appeals, and indeed in other proceedings. In the meantime, media organisations will be chomping at the bit to challenge additional liabilities incurred subsequent to the Strasbourg and Supreme Court judgments.  

RPC represented Associated Newspapers Ltd and MGN Ltd in their appeals

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