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Mail wins ECHR ruling against costs “no gain, no fee”.

Mail wins ECHR ruling against costs “no gain, no fee”.

On November 13, 2024By Littum

The ECHR building in Strasbourg, which has ruled in a case brought by Daily Mail publisher Associated Newspapers — The European Court of Human Rights (ECHR) in Strasbourg. Image: Getty Images

The publisher of the Daily Mail has won a ruling at the European Court of Human Rights challenging “excessive” costs incurred by claimants in libel and privacy cases.

The publisher claimed that its right to freedom of expression under Article 10 of the European Convention had been violated.

The ruling follows a privacy lawsuit filed by a man who was arrested, but not charged, after a terrorist attack. The Mail’s £83,000 damages award was eclipsed by the £822,000 paid to the man’s lawyers.

Associated Newspapers took the UK Government to the Strasbourg Court over Contingent Fee Arrangements (CFA) and After the Event (ATE) insurance premiums in relation to two recent cases for which it had to pay the additional costs.

It won on CFAs and the UK was ordered to pay the publisher €15,000 in costs and expenses, with a further decision on any financial damages. But the publisher was not successful in the part of its case concerning ATE awards.

CFAs allow plaintiffs to hire an attorney on a “no win, no fee” basis or pay only a portion of the fee before the case is settled. If they win, they pay a success fee on top of the normal fees. But if they lose, their lawyer doesn’t get paid.

ATE awards guarantee a claimant’s obligation to pay the defendant’s costs if the case is unsuccessful.

Associated complained about CFAs in a privacy case brought by a man named by Mail Online after he was arrested, but never charged, on suspicion of involvement in the 2017 Manchester Arena terror attack.

The ruling in favor of the man is one of a number in recent years that have set a precedent in favor of greater privacy and against naming suspects before charges.

Associated was ordered to pay the man £83,000 in damages plus costs of £822,421.79, which included £245,775 plus VAT for the success fee agreed between the man and his solicitor.

The publisher agreed that its obligation to pay this kind of success fee violated Article 10 (freedom of expression) of the European Convention on Human Rights.

The associate said, according to a court reportthat the “burdens placed on unsuccessful defendants were excessive and unfair, and the threat of such obligations was clearly capable of discouraging press participation in debates on matters of legitimate concern”.

The case referenced a 2011 ruling in which Mirror publisher MGN Ltd won a similar case at the European Court of Justice after it faced a legal costs bill of more than £1m. over a case in which supermodel Naomi Campbell won £3,500 in damages.

Legislation was passed in 2013 to prevent losing parties from being liable for success fees and ATE insurance premiums – except in libel and privacy cases. Liability for success fees in defamation and privacy cases was abolished in 2019, except where the CFA pre-empted that decision, which was the case here, but successful claimants can still recover the costs of ATE awards from the losing party.

For this reason, the court concluded that the obligation on the media company to pay additional costs, including success fees, was “disproportionate”, resulting in a violation of Article 10.

But it found the obligation to pay ATE premiums to the man in the Manchester Arena case, as well as to a woman who separately settled with Associated over “defamatory” allegations that she gave credence to the false claims of convicted fan Carl Beech , which led to the landmark investigation into child sexual abuse, Operation Midland, was not disproportionate.

The woman in that case asked to receive £825,164.40, of which £335,160 represented the ATE award, but ultimately accepted £709,095.15 as a costs settlement.

The judgment summary said the premium payments were proportionate “particularly as these premiums would have served the interests of the newspaper company had it won the cases against it”.

The ruling was a chamber judgment, meaning both sides now have three months in which to request that it be referred to the Court’s Grand Chamber to consider whether it merits further scrutiny.

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