Coventry and Others v Lawrence and another (No 3)

JurisdictionEngland & Wales
CourtSupreme Court
JudgeLord Sumption,Lord Mance,Lord Neuberger,Lord Dyson,Lord Clarke,Lady Hale,Lord Carnwath
Judgment Date22 July 2015
Neutral Citation[2015] UKSC 50
Date22 July 2015

[2015] UKSC 50

THE SUPREME COURT

Trinity Term

On appeal from: [2012] EWCA Civ 26

before

Lord Neuberger, President

Lady Hale, Deputy President

Lord Mance

Lord Clarke

Lord Dyson

Lord Sumption

Lord Carnwath

Coventry and others
(Respondents)
and
Lawrence and another
(Appellants)

Appellants (Lawrence/Shields)

Stephen Hockman QC Timothy Dutton QC William Upton Benjamin Williams

(Instructed by Richard Buxton Environmental and Public Law)

Respondent (David Coventry and Moto-Land UK Ltd)

Robert McCracken QC Sebastian Kokelaar

(Instructed by Pooley Bendall Watson)

Intervener (Secretary of State for Justice)

Tom Weisselberg QC Jason Pobjoy

(Instructed by Government Legal Department)

Intervener (Asbestos Victims Support Group Forum UK)

Robert Weir QC Harry Steinberg Achas Burin

(Instructed by Leigh Day)

Intervener (The General Bar Council)

Nicholas Bacon QC Dr Mark Friston Greg Cox

(Instructed by Colemans CTTS)

Intervener (The Law Society)

Kieron Beal QC

(Instructed by The Law Society)

Intervener (Association of Business Recovery Professionals

Simon Davenport QC Tom Poole Daniel Lewis Clara Johnson

(Instructed by Moon Beever)

Intervener (Department of Justice Northern Ireland

Attorney-General for Northern Ireland

(Instructed by Office of the Attorney-General for Northern Ireland)

Intervener (Media Lawyers Association)

Gavin Millar QC Chloe Strong

(Instructed by Reynolds Porter Chamberlain LLP)

Intervener (Association of Costs Lawyers)

Roger Mallalieu

(Instructed by Association of Costs Lawyers)

Lord Dyson
The factual and procedural background
1

This judgment is concerned with an attack on the compatibility with the European Convention on Human Rights ("the Convention") of the system for recovery of costs in civil litigation in England and Wales following the passing of the Access to Justice Act 1999 ("the 1999 Act"). The proceedings to which it relates have been the subject of two previous judgments of this court – [2014] UKSC 13, [2014] AC 822 and [2014] UKSC 46, [2015] AC 106. The fact that this is the third judgment of this court in this case is an unfortunate irony, as the issue which has to be addressed arises from the contention that the order for costs made against the respondents at first instance infringed article 6 of, and/or article 1 of the First Protocol to, the Convention, and considerable further costs have been incurred since then.

2

A detailed summary of the factual and procedural history is to be found in the first two judgments at [2014] AC 822, paras 2–27 and [2015] AC 106, paras 1–4. So far as relevant for present purposes, and at the risk of over-simplification, the facts are as follows.

3

The appellants, Katherine Lawrence and Raymond Shields, the owners of a residential bungalow in Mildenhall, Suffolk, brought proceedings for an injunction and damages based on the contention that the noise emanating from speedway and other motorsport activities, operated by David Coventry and Moto-Land UK Limited ("the respondents") on a stadium and track some 800 metres away, constituted a nuisance. After a trial lasting 11 days, HHJ Seymour QC, sitting as a Deputy High Court Judge, found in favour of the appellants, awarding them damages and an injunction limiting the level of noise emanating from the stadium and track, against the respondents. He also dismissed the claim in so far as it had been brought against the respondents' landlords ("the landlords").

4

So far as the figures are concerned, the amount of damages awarded by the judge in favour of the appellants against the respondents was a total of £20,750; and, on the evidence, the value of the appellants' bungalow was under £400,000, and the maximum diminution in its value if the nuisance had continued (ie if no injunction had been granted) was £74,000.

5

Of central relevance for current purposes, the judge also ordered the respondents to pay 60% of the appellant's costs as assessed on the standard basis. We now have fairly precise figures as to what that order means (subject to the points dealt with in paras 7 and 8 below).

6

The appellants' "base costs", that is the costs payable by the appellants to their lawyers on a conventional basis, in connection with the proceedings up to the time the judge made the order, were £307,642, of which the respondents would therefore be liable for 60%, ie £184,585. However, the appellants agreed with their lawyers that they would proceed on the basis that the lawyers would act under a conditional fee agreement, ie on a "no win no fee" basis. This meant that, as the appellants had won before the judge, they would be liable to pay (i) a success fee to their lawyers on top of the base costs, to compensate the lawyers for acting on a conditional fee agreement, and (ii) a so-called ATE premium, a premium to an insurance company in return for that insurance company having agreed to underwrite any liability which the appellants might have had for the respondents' costs if the respondents had won. The success fees amounted to £215,007, of which the respondents were liable for 60%, ie £129,004; the ATE premium appears to have been in the region of £305,000, of which the respondents were liable for 60%, ie about £183,000.

7

The respondents accept that they cannot challenge their liability for the £184,585 on the ground that it infringes their Convention rights. However, Mr McCracken QC was understandably anxious to make it clear on their behalf that they would anticipate strongly challenging the appellants' right to recover that sum, on the sort of grounds on which a paying party is always entitled to seek to challenge the receiving party's bill of costs when assessed on the standard basis. Those grounds would be that the total sum is disproportionate, and in any event that the total sum includes items which it was not reasonable to have incurred at all, and that the sums incurred in connection with those items which were reasonably incurred were themselves unreasonable.

8

However, in relation to the £129,004 and the £183,000, the respondents argue that it would infringe their rights under article 6 of the Convention ("article 6") and/or article 1 of the First Protocol to the Convention ("A1P1") if they were liable for those sums, and that is the issue which we preliminarily considered in our second judgment and now have to deal with in this judgment. Again Mr McCracken was anxious to emphasise that, if his arguments based on article 6 and A1P1 fail, the respondents would wish to raise, to the extent which they properly can, the sort of arguments described in para 7 to challenge any liability to these two sums.

9

In order to complete the history, the judge's decision on the substantive issue was reversed by the Court of Appeal, who decided that the respondents had not been guilty of nuisance. However, the appellants were successful in their appeal to this court, and, following our first decision, we reinstated Judge Seymour's order (albeit with modifications), including (subject to what we decide in this judgment) the direction that the respondents pay 60% of the appellants' costs of the proceedings up to and including his judgment. Our second judgment concerned the liability of the landlords for the respondents' nuisance, and, in paras 32–46, what were in the event preliminary observations on the respondents' contention that the extent of their liability for costs pursuant to Judge Seymour's order (as reinstated by this court) infringed article 6 and/or A1P1. For the reasons given in paras 43–45, we did not feel it right to determine that issue until we had heard argument on the issue from the Secretary of State and any other appropriate intervener.

10

The appellants' base costs in the Court of Appeal and the Supreme Court were, respectively, £103,457 and £204,226. The appellants' success fees were £71,770 in the Court of Appeal and £92,115 in the Supreme Court. The appellants' ATE premia were £70,141 in the Court of Appeal and £126,588 in the Supreme Court. It appears likely that the effect of the order we make following the two judgments which we have given is that the respondents will be liable for all, or a substantial proportion, of these sums, subject to the arguments discussed in paras 6 to 8 above, including in relation to the success fees and ATE premia the contention that any such liability would be contrary to article 6 and/or A1P1.

11

The issue raised by the respondents based on article 6 and A1P1 has now been fully argued. We received full submissions from the respondents in support of their contention that their liability to pay the success fees and ATE premia infringed article 6 and A1P1. The case to the contrary was presented by the appellants, with supporting arguments from the Secretary of State for Justice, the General Council of the Bar, the Law Society of England and Wales, the Asbestos Victims Support Group Forum, and (in written form only) the Association of Business Recovery Professionals Limited. We also had submissions from the Media Lawyers Association, which were not directed to the point at issue.

The legislative scheme in its historical context
12

Section 17(1) of the Courts and Legal Services Act 1990 ("the 1990 Act") stated that the general objective of Part II was the development of legal services in England and Wales "by making provision for new or better ways of providing such services and a wider choice of persons providing them, while maintaining the proper and efficient administration of justice". Section 58 permitted lawyers, for the first time, to enter into conditional fee agreements ("CFAs", which, as explained above, were "no win no fee" agreements under which a lawyer was only to be paid a fee if the client won the case) subject to satisfying prescribed conditions. The 1990 Act did not, however, permit the successful party to recover any "success fee" (ie the...

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2 firm's commentaries
  • UK Supreme Court Declines Human Rights Challenge to Conditional Fees and ATE
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