Newspapers lose case on costs

The Supreme Court has unanimously rejected an attempt by newspaper publishers to contest adverse costs orders on the basis they breached their Art 10 freedom of expression.

In each of three conjoined cases, Times Newspapers & Ors v Flood & Ors [2017] UKSC 33, the publisher had lost either a libel trial—Times Newspapers and Associated Newspapers—or a phone hacking case—MGN—and been ordered to pay the claimant’s costs. The publishers argued that they should not have to pay their opponent’s success fees and after-the-event (ATE) insurance as to do so would breach their Art 10 rights.

Lord Justice Jackson’s civil justice reforms scrapped the recovery of success fees and ATE in civil claims in April 2013, with the exception of defamation and privacy.

The newspapers asked the court to follow the 2011 European Court of Human Rights (ECtHR) ruling in MGN v UK (2011) 53 EHRR 5, which held that recoverability of success fee and ATE insurance infringed freedom of expression. However, the justices declined to do so because the UK was not party to this appeal, and because the claimants had relied on a statute, the Access to Justice Act 1999.

Nick Neocleous, Edwin Coe partner, who acted for police officer Gary Flood in the case, said: “It has been a long and bumpy road [and] much law has been made along the way that has developed the manner in which competing human rights should be treated.

“This final decision develops in particular the Art 10 rights to freedom of expression and the competing rights of Mr Flood to rely on the law as it stood when he commenced the litigation.”

David Greene, NLJ consultant editor and senior partner at Edwin Coe, said: “The judgment is an exposition of judicial thinking on the interplay of different human rights and the principle of the rule of law. Three claims came before the Supreme Court in the Flood case in which the publisher of alleged defamatory material proffered that the costs regime in which a party could recover both the success fee in a CFA and the ATE premium.

“This issue had already been litigated before the ECtHR in MGN with the court concluding that the costs regime was an unreasonable fetter on freedom of expression. This decision was analysed by the Supreme Court in Flood and was followed but the court concluded that despite the ECtHR decision the claimants engaged both issues of the rule of law and their Art 1 of the First Protocol rights effectively to rely on the legislation at the time as being lawful and enforceable. These latter rights won the day.”   

Francis Kendall, vice-chairman of the Association of Costs Lawyers, said: “The nature of the ruling means that the issue has not been fully determined, but it has clearly shut the door to the argument in circumstances where there is illegal conduct involved (phone hacking/blagging etc).

“This should apply to all such cases. It may be unsurprising, with hindsight, that the Supreme Court did not find favour in an argument based on the freedom of expression to publish illegally obtained material. In respect of other privacy/defamation cases, it appears that, despite this ruling, the lower courts will still be bound by the Campbell v MGN Ltd (No 2) [2005] 1 WLR 3394 House of Lords ruling that additional liabilities do not breach the Art 10 right, until there is an appeal to the Supreme Court at which the government is represented.”