Justice Secretary Jack Straw has proposed a dramatic cut to the success fees lawyers can charge for winning defamation cases, days after the publication of Jackson LJ’s final report.
Currently, lawyers can double their fee by charging a 100% uplift under conditional fee agreements (CFAs) in “no win, no fee” cases.
According to Straw, such generous fees are not justified in defamation cases due to their high success rate. Instead, he proposes that the success fee be no more than 10%.
The proposal, outlined in the Ministry of Justice consultation paper, Controlling Costs in Defamation Proceedings – Reducing Conditional Fee Agreement Success Fees, follows concerns that the cost of defending defamation proceedings is stymieing freedom of expression. Potentially ruinous legal costs are deterring the press from publishing articles that are in the public interest, or forcing them to settle rather than defend actions. Straw said: “Lawyers need to recover their costs and be rewarded for their efforts and the risks they undertake when providing people with access to justice in ‘no win no fee’ cases.
“But evidence suggests that the regular doubling of fees that currently takes place is simply not justified and the balance of costs between claimant and defendant needs to be reconsidered.”
“Sir Rupert Jackson’s comprehensive review of costs in the civil courts, which was published last week, proposed a broad range of recommendations for reform. I welcome that substantial and detailed report and I look forward to considering the proposals in detail. But the case for an urgent interim measure for dealing with success fees in defamation cases has become clear.”
The consultation closes on 16 February 2010.
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