Does claimant's right to recover any success fee and ATE premium infringe ECHR?

Does claimant's right to recover any success fee and ATE premium infringe ECHR?

Just when we thought we were moving in the right direction, with the new Jackson Reforms and the Court of Appeal decision in Denton, up pops an issue in the Supreme Court  throwing up uncertainty, confusion and the possibility of satellite litigation and compensation claims.

Yesterday, the Supreme Court, in Coventry v Lawrence [2014] UKSC 46, handed down judgment in a nuisance claim.  The ramifications for those involved with the old costs regime (success fees and ATE premiums) became apparent to those who had embarked on reading the 60 page judgment quite early on, at para [32].  The issue before the Supreme Court was whether the provisions not only in the CPR and Practice Directions but also the primary legislation being, Legal Services Act 1990, Part II, as amended by the Access to Justice Act 1999,  infringed the defendant’s right to a fair trial under art 6 of the EU Human Rights Convention.

Some may recall the decision of the House of Lords in Callery v Gray [2002] UKHL 28, some time ago, which determined that the ‘old costs regime’, as it is now known, did not breach art 10 of the convention ie freedom of expression.  However, the European Court took a different view three years later in MGN.  It was this decision which the Supreme Court considered meant it was able to reconsider the position.  The debate has been adjourned, the Government informed, potential interveners will be considering their positions and in due course the issue may be debated in the Supreme Court or perhaps the Court of Appeal; the Supreme Court noting that was the court with the experience in costs matters.  Would Jackson LJ, whose report lead to the abolition of the old costs regime, sit in judgment?

This leaves many in a state of limbo and, given the area of costs under the microscope, will have a disproportionate impact on the more vulnerable within the justice system.

  1. Many cases are still subject to the old costs regime. If a decision is made that the old costs regime breaches the right to a fair trial this could leave claimants in a very difficult position in so far as the costs of success fees and ATE premiums are concerned. Will they have to pay them, having worked on the basis these costs would be paid by the defendant if the claimant wins or will not be due if the claimant loses? What position will the lawyers acting in such cases take pending the determination of the issues raised in this case?  How will this impact on the insurance providers who have provided the ATE insurance policies and deferred payment of the policies?
  1. What about those who have already paid the claimants costs for success fees and ATE premiums? Would a finding that the rights under the Convention had been infringed lead to a stampede of compensation claims? Whilst there is no immediate impact for these defendant parties, they or their lawyers will no doubt follow the next stages with interest.  For those claimants that won and had such fees paid by the defendants, the time taken for the courts to determine this issue will be a long one and a decision that there was no infringement will be only outcome they will want to see.

One thing is for certain, this is a debate which will raise a lot of issues for a wide range of people, parties, lawyers, insurers, human rights campaigners.  We await the decision with interest.


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About the author:

Janna is a dispute resolution lawyer. She deals primarily with cross border issues and is active in the work being undertaken in relation to the implications of Brexit for Dispute Resolution lawyers. Janna also heads up a LexisNexis costs team bringing together expertise from across the company to deal with the costs issues facing the profession.