8 Representative Claimants and Others v MGN Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Mann |
| Judgment Date | 19 April 2016 |
| Neutral Citation | [2016] EWHC 855 (Ch) |
| Date | 19 April 2016 |
| Docket Number | Case No: VARIOUS |
| Court | Chancery Division |
[2016] EWHC 855 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Rolls Building, Fetter Lane
London EC4A 1NL
Mr Justice Mann
Case No: VARIOUS
Mr Hugh Tomlinson QC and Mr Jeremy Reed (instructed by Atkins Thomson as Lead Solicitors) for the Claimants
Mr Gavin Millar QC (instructed by RPC LLP) for the Defendant
Hearing dates: 8 th April 2016
The application and its background
This is an application about costs which raises an important point about the applicability of normal conditional fee agreement ("CFA") provisions to privacy litigation generally. Although the application has technically been made by the claimants, the real point which arises is one raised by the defendant, which is whether the defendant newspaper publisher ("MGN") is right to say that the current CFA legislation, which permits the recovery of an uplift and ATE insurance premium is incompatible with Article 10 of the European Convention on Human Rights ("the Convention"). The circumstances in which the point arises and has been brought before me are as follows.
A large number of cases have been brought before the court by individuals alleging that they have been the victims of invasion of privacy by the defendant in the form of phone hacking, illicit information gathering and subsequent publication of the fruits of that exercise in the defendant's newspapers. A number of cases have settled before trial. Eight cases were taken to trial and I delivered judgment in favour of the claimants on 21 May 2015 ( [2015] EWHC 1482 (Ch)). As part of their judgments the claimants all got orders for costs in their favour. Each of the claimants was litigating with the benefit of a CFA under which their solicitors and counsel were entitled to an uplift in the event of success, and in relation to which each of the claimants (save for Mr Gascoigne) had taken out ATE insurance to cover any liability that they might have had to the defendant in respect of costs. The assessment of their costs has not got particularly far, but they are seeking recovery of the uplift and the ATE insurance premiums ("the additional liabilities").
12 other cases which have settled have resulted in agreed orders for costs. Each of those claimants has similarly had the benefit of a CFA, which entitles them to an uplift and, again, pursuant to which each of them has taken out ATE insurance. In the course of their assessments they have claimed those additional liabilities.
In those assessment proceedings the defendant has formally taken the point that the additional liabilities are not recoverable as a matter of law because the legislation is incompatible with the Convention. In their points of dispute in one of those settled cases, which I can take as an example, they set out the point as follows:
"6. Success fees.
The defendant's primary contention, which it will if necessary seek to advance to the Supreme Court after its determination at first instance, is that the recovery of additional liabilities is unlawful, and would place the United Kingdom in breach of its obligations under the ECHR and the Court in breach of its obligations under the Human Rights Act 1998 to uphold the Convention.
The huge additional expense caused by additional liabilities unlawfully interferes with the defendant's right to free expression under Article 10 of the ECHR and its right of effective access to the Court under article 6 of the ECHR. The ECtHR has already ruled that the regime is incompatible with the Convention: MGN Ltd v United Kingdom [2011] ECHR 66. The United Kingdom was and remains in breach of its treaty obligations by failing to prevent the recovery of additional liabilities from the defendant in respect of this and similar cases. The Court, as a public body, would be in breach of its own Convention obligations to allow the recovery of additional liabilities in this case.
The Court should therefore (i) declare any relevant primary legislation to be incompatible with the Convention; (ii) nullify all secondary legislation; and (iii) in any event refused to award any additional liabilities as a matter of discretion."
The sums involved in these cases, or at least in the eight decided cases which went to trial, are considerable. Precise figures do not matter for the purposes of the matter before me but in the 12 settled cases the success fees are said to total a sum in excess of £600,000 and the insurance premiums total more than £200,000. In the eight cases that went to trial the success fees exceed £1.4m, and the ATE premiums exceed £632,000 in aggregate. Accordingly, a lot of money rides on the point taken by MGN just in terms of those cases. Furthermore, the point raises a point which is capable of affecting large numbers of other cases. There are a large number of phone hacking cases in the pipeline, and there are large numbers of other cases which have historically been settled in other cases beyond the 12 cases that I have referred to. It is, of course, of even greater significance when one considers that, if the point is correct, it must apply to all other privacy claims.
Thus the point has been made to arise in the settled cases, and it will inevitably arise in relation to the eight cases which I decided last year. The claimants have not waited to have the point decided in the costs proceedings (and in any event there would be some difficulty in a costs judge granting a declaration of incompatibility) and have sought to make the issue arise in the present proceedings (which are the 8 cases which I decided last summer) so that the point can have an airing before it is dealt with in the costs proceedings. The matter is slightly complicated by the fact that, as will appear, it can be said that the House of Lords has already decided the point in favour of the validity of the scheme, whereas the European Court of Human Rights (in the case referred to in the points of dispute) has come to the contrary view. In the circumstances it is questionable (to put it at its lowest) which decision this court should follow, and it is anticipated that a "leapfrog" appeal will be sought in relation to my decision so that the point can (if the Supreme Court thinks fit) deal with it at the same time as it is dealing with a similar point in relation to defamation proceedings in a case called Flood. That is the course that was adopted by Mitting J in Miller v Associated Newspapers Ltd [2016) EWHC 397 (QB).
The manner in which the claimants have sought to pre-empt the decision in the costs assessment is a slightly curious one in terms of the terminology used. They issued an application notice seeking two declarations:
"1. A declaration that the Representative Claimants' claims for misuse of private information do not engage Article 10 of the European Convention on Human Rights and as a result they are entitled to the payment of additional liabilities, alternatively
2. A declaration that, on the facts of the Representative Claimants' claims, the payment to them of additional liabilities is compatible with the Defendant's rights under the Article 10 of the European Convention on Human Rights."
Before me Mr Tomlinson QC, who appeared for the claimants, accepted that the first declaration was, so far as relevant at all, not the right one. What he meant to seek was that the question was more appropriately whether the additional liabilities interfered with the Article 10 rights of the defendant. Partway through the hearing he and Mr Millar QC agreed that the sort of issue which might otherwise have arisen under the second declaration could be put on one side, at least for the moment. They agreed that the real question for determination for the moment was whether the current CFA scheme, insofar as it allows the recovery of the uplift and the ATE premiums, was incompatible with Article 10 as proposed by MGN, and that was the question which should be focused on, with appropriate relief following from my decision. They also agreed that I could properly, and should, treat the assessments in the 12 settled cases as also being before me for the purposes of this application, so that my determination would cover the eight determined cases and the twelve settled cases.
One additional point arises in relation to the eight decided cases. It is said that by reason of the way in which one particular aspect of the eight decided cases was decided, the defendant is barred by estoppel or otherwise from taking the point that it seeks to take in relation to the CFA uplift (but not the ATE premium recovery). In the interests of brevity I shall call this "the estoppel point" even though that may not be an entirely accurate label in legal terms.
The relevant CFA regime
The legislative background to the point arises from a combination of various statutory provisions, statutory instruments and rules of court which govern the ability of lawyers to charge uplifts under a CFA, and the ability to recover those uplifts and ATE premiums from an unsuccessful party. In the light of my decision in relation to the main point arising on this application, I do not need to set out all those provisions verbatim. It suffices to summarise the effect of them as follows.
Originally the uplift under a CFA was recoverable from the paying party but ATE premiums were not. The latter were then made recoverable for a time, but as from April 2013 both elements of additional liability ceased to be recoverable from a paying party in most classes of litigation. However, the change of regime in relation to those premiums was, for the time being, not applied (inter alia) to defamation and privacy cases, so both the uplift and ATE premiums remain recoverable under CFAs entered into in such litigation. All the...
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