Government considers costs protection in defamation and privacy cases

The Government has presented for consultation proposals to introduce a form of qualified one way costs shifting (‘QOCS’) for defamation and privacy cases. Its stated rationale is ‘to ensure that meritorious cases are able to be brought or defended by the less wealthy, who should not be deterred from bringing or defending an appropriate claim through the fear of having to pay unaffordable legal costs to the other side if they lose’. These proposals are at least in part a response to Lord Leveson’s recommendation that costs protection be extended to defamation and privacy cases.

Scope of costs protection

It is proposed that costs protection in the form of QOCS would be available to claimants and defendants, including both individuals and organisations such as businesses and charities.

In contrast with the QOCS scheme currently in place for personal injury cases, the amount of costs protection in defamation and privacy cases would be scaled. That means that a party of ‘modest means’ may be entitled to costs protection in full, but a party of ‘substantial means’ would not be entitled to any costs protection because they would not face ‘severe financial hardship’ if ordered to pay the other side's costs. Parties which are between these two extremes, which could make some contribution, but not pay costs in full, would be entitled to partial costs protection.

The proposals expressly say that individuals of substantial wealth or substantial publishers do not warrant costs protection and that this will be the case even if a national newspaper, for example, reports that it is losing money. The fact that it continues to run and pay for a substantial organisation means that it can afford to pay costs without facing severe financial hardship.

Procedure

If parties cannot agree on the level of costs protection, then it would be for the judge to decide, based on a statement of assets provided by the applicant. Where costs protection would be capped for parties with some means, that sum could either be agreed by the parties or capped by the judge at the first hearing, based on the applicant’s statement of assets and the costs budget.

The Government says that, although it has no current plans to extend QOCS to other types of matters, the question could be considered further in the future.

You can access the consultation papers and complete a survey on the proposals by visiting the Consultation Hub. The consultation closes on 8 November 2013 and the Government plans to publish a consultation response by April 2014.

What do you think about the Government’s proposals? What other areas do you think would benefit from this form of costs protection? Vote in our poll below or leave us a comment.

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